“Challenging oil and gas market” has somewhat become an inevitable reference point in financial reports of companies working in the offshore energy sector. Still, those involved in the offshore wind market usually have positive figures to report. This is also the case with Fugro, whose revenue declined by 20.4% in Q3 2016 due to the oil and gas downturn, but offshore wind market stayed strong and brought work on two projects outside of Europe.
Fugro’s revenue in Q3 2016 was at EUR 474.1 million, down from EUR 610.9 million reported for the same period of the last year.
The company said that this is the third consecutive year of an exceptionally deep downturn in the oil and gas services market.
Implementation of cost reduction and performance improvement measures as required by market conditions is underway. This includes the ongoing restructuring, which is ahead of plan with 1,120 employees laid off in the year-to-date and active fleet reduced by 5 vessels with more reductions to be made as needed by the end of the year. In its financial results for 2015 , Fugro reported it had reduced its workforce by 1,577 people.
The company’s two non-European offshore wind contracts include investigations at the Bay State Wind site , off the East Coast of the USA, and a project site in Taiwan.
Furthermore, during the third quarter of this year, the Rampion wind farm cable installation work started, keeping vessels Fugro Symphony, Fugro Saltire and a trenching system busy, Fugro said. Phase one will be completed in November, with phase two starting in March 2017.
Paul van Riel , Fugro CEO: “Fugro is coping with the tough oil and gas market conditions by focusing on market share, utilisation levels and continuous adjustment of cost base and capacity. As a result, we are generating good cash flow. EBIT margin in the quarter was supported by a solid performance in our renewables and building and infrastructure business.”
In combination with the ongoing restructuring, the company is implementing its ‘Building on Strength’ strategy by regrouping its survey, geotechnical and subsea services activities into Site Characterisation and Asset Integrity business lines. These business lines will be managed within two divisions: Marine and Land.
“We are also making good progress with the implementation of our strategic roadmap. We are building a truly customer centric and more efficient organisation by combining our services into integrated value propositions for our customers. To achieve this we are regrouping our geotechnical, survey and subsea activities into site characterisation and asset integrity business lines within two divisions: Marine and Land,” van Riel said.