NOTE 8 — INVESTMENTS IN COMPANIES UNDER EQUITY METHOD
| 2017 % of interests |
December 31, | |||||||||||||||||
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Country / Head office |
2017 | 2016 | 2015 | |||||||||||||||
| (In millions of US$) | ||||||||||||||||||
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Marine acquisition |
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| CGG Eidesvik Ship Management AS | Norway / Bergen | 49.0 | % | 0.2 | 0.2 | 0.2 | ||||||||||||
| Eidesvik Seismic Vessels AS(1) | Norway / Bomlo | — | — | 21.0 | 19.0 | |||||||||||||
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Gardline CGG Pte Ltd(2) |
Singapore | — | — | — | 7.7 | |||||||||||||
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Geo Ship Management Services SAS (formerly GeofieLD Ship Management Services SAS)(3) |
France / Massy | — | — | — | (0.1 | ) | ||||||||||||
| Global Seismic Shipping AS(1) | Norway / Bomlo | 50.0 | % | 63.5 | — | — | ||||||||||||
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Oceanic Seismic Vessels AS(1) |
Norway / Bomlo | — | — | 27.0 | 25.4 | |||||||||||||
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PT Elnusa-CGGVeritas Seismic |
Indonesia / Jakarta | 49.0 | % | 0.2 | 0.4 | 0.3 | ||||||||||||
| PTSC CGGV Geophysical Survey Limited | Vietnam / Vung Tau City | 49.0 | % | — | 9.6 | 18.9 | ||||||||||||
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Land and Multi-Physics acquisition |
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Argas |
Saudi Arabia / Al-Khobar | 49.0 | % | 68.3 | 64.5 | 73.4 | ||||||||||||
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Seabed Geosolutions BV |
The Netherlands /Amsterdam | 40.0 | % | 60.1 | 67.5 | 53.4 | ||||||||||||
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Veri-Illuq Geophysical Ltd. |
Canada / Calgary | 49.0 | % | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||||||
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Yamoria Geophysical Ltd. |
Canada / Calgary | 49.0 | % | (0.3 | ) | (0.3 | ) | (0.3 | ) | |||||||||
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GGR |
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Petroleum Edge Limited |
UK / London | 50.0 | % | (2.3 | ) | (1.1 | ) | — | ||||||||||
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Reservoir Evaluation Services LLP(4) |
Kazakhstan / Almaty | 49.0 | % | 3.1 | 1.8 | 2.9 | ||||||||||||
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| Investments in companies under the equity method | 192.7 | 190.5 | 200.7 | |||||||||||||||
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| (1) |
On April, 2017, CGG entered into agreements with Eidesvik, the lenders under our Nordic credit facility and the lenders under the credit facilities of “ESV” and “OSV” for the implementation of a new ownership set up for our seismic fleet, through the creation of Global Seismic Shipping AS (“GSS”) company. This new company, “GSS”, holds 100% stake in “ESV” and “OSV” (see note 2). |
| (2) |
On March 24, 2016, CGG sold its 49% stake in Gardline CGG Pte Ltd. |
| (3) |
On June 13, 2016, CGG bought the remaining 50% stake in GeofieLD Ship Management Services SAS. Shortly after, the company was renamed Geo Ship Management Services SAS. |
| (4) |
On February 23, 2017, CGG acquired an additional 13% stake in Reservoir Evaluation Services LLP. |
The variation of “Investments in companies under equity method” is as follows:
| December 31, | ||||||||||||
| 2017 | 2016 | 2015 | ||||||||||
| (In millions of US$) | ||||||||||||
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Balance at beginning of period |
190.5 | 200.7 | 137.7 | |||||||||
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Change in consolidation scope |
23.6 | (8.6 | ) | 4.9 | ||||||||
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Investments made during the year |
0.7 | 19.0 | 40.0 | |||||||||
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Equity in income |
(20.1 | ) | (8.2 | ) | 21.4 | |||||||
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Dividends received during the period, reduction in share capital |
(2.0 | ) | (13.0 | ) | (5.1 | ) | ||||||
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Change in exchange rate and other |
— | 0.6 | 1.8 | |||||||||
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Balance at end of period |
192.7 | 190.5 | 200.7 | |||||||||
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The changes in consolidation scope in 2017 correspond for US$23.6 million to the implementation of the new ownership set up for our seismic fleet (see note 2 — New ownership set up for our seismic fleet). The changes in consolidation scope in 2016 corresponded for US$(8.6) million to the disposal of the shares we held in Gardline CGG PTE Ltd. In 2015, the changes in consolidation scope corresponded for US$4.9 million to the disposal of the shares we held in Magnitude Microseismic LLC.
The investments in 2016 corresponded for US$19.0 million to our participation in Seabed Geosolutions BV capital increase through the conversion of part of the existing debt. In 2015, the investments corresponded for US$40.0 million to our participation in Seabed Geosolutions BV capital increase through the conversion of part of the existing debt.
Main contributive companies under equity method
The following tables illustrate summarized financial information as of December 31, 2017 of the main contributive entities operating in the Land and Marine acquisition business:
| Argas | Global Seismic Shipping AS |
Seabed Geosolutions BV |
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| (In millions of US$) | ||||||||||||
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Revenue |
131.9 | 19.6 | 89.9 | |||||||||
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Depreciation and amortization |
(31.7 | ) | (23.7 | ) | (23.7 | ) | ||||||
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Cost of financial debt |
(0.4 | ) | (11.9 | ) | (0.9 | ) | ||||||
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Tax income (expense) |
(1.3 | ) | — | (1.5 | ) | |||||||
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Net income (loss) |
11.3 | (17.1 | ) | (18.7 | ) | |||||||
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Cash and cash equivalents |
38.2 | 24.1 | (0.9 | ) | ||||||||
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Current assets |
52.2 | 1.8 | 41.5 | |||||||||
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Total non-current assets |
99.2 | 457.6 | 209.8 | |||||||||
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Current financial liabilities |
— | 13.2 | — | |||||||||
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Current liabilities |
31.2 | 0.7 | 47.7 | |||||||||
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Non-current financial liabilities |
— | 342.7 | 5.2 | |||||||||
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Non-current liabilities |
14.4 | — | 0.2 | |||||||||
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Equity |
144.0 | 126.9 | 197.3 | |||||||||
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Dividends paid to CGG |
— | — | — | |||||||||
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CGG Services (Norway) AS granted a loan to Global Seismic Shipping AS for a net discounted amount of US$15.6 million as of December 31, 2017. CGG granted a loan amounting to US$38.0 million as of December 31, 2015 to Seabed Geosolutions BV. This loan was repaid for US$19.0 million and for the remaining US$19.0 million converted in capital as of December 31, 2016.
For transactions with investments in companies under the equity method, please see note 27 — Related party transactions.
Reconciliation of the summarized financial information above with the carrying amount of the main contributive entities in our statement of financial position and with our share of income as of December 31, 2017 is as follows:
| Argas | Global Seismic Shipping AS |
Seabed Geosolutions BV |
Other entities |
Total | ||||||||||||||||
| (In millions of US$) | ||||||||||||||||||||
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Equity of main contributive entities |
144.0 | 126.9 | 197.3 | |||||||||||||||||
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% of interest |
49 | % | 50 | % | 40 | % | ||||||||||||||
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% of equity of main contributive entities |
70.6 | 63.5 | 78.9 | |||||||||||||||||
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Adjustments and eliminations |
(2.3 | ) | — | (18.8 | ) | |||||||||||||||
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Investments in companies under the equity method |
68.3 | 63.5 | 60.1 | 0.8 | 192.7 | |||||||||||||||
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| Argas | Global Seismic Shipping AS |
Seabed Geosolutions BV |
Other entities |
Total | ||||||||||||||||
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Net income of main contributive entities |
11.3 | (17.1 | ) | (18.7 | ) | |||||||||||||||
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% of interest |
49 | % | 50 | % | 40 | % | ||||||||||||||
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% of income of main contributive entities |
5.5 | (8.6 | ) | (7.5 | ) | |||||||||||||||
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Adjustments and eliminations |
(1.7 | ) | 0.1 | — | ||||||||||||||||
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| Share of income (loss) in companies accounted for under the equity method | 3.8 | (8.5 | ) | (7.5 | ) | (7.9 | ) | (20.1 | ) | |||||||||||
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