Fugro’s Results Below Expectations. Company Sees Further Growth in Renewables Market
Commenting on Fugro’s financial results for the third quarter of 2017, which were below the company’s expectations, CEO Paul van Riel said that Fugro has strong positions in the renewable energy market with good potential for further growth.
Fugro stated that the results were below expectations due to lower revenue. The company reported a revenue of EUR 364 million for the quarter, a 23.2% decrease compared to EUR 474.1 million posted for Q3 2016. Fugro mainly attributed the fall in revenue to technical downtime of some vessels, mainly in Europe, and hurricanes in the Americas.
As a result, the company’s earnings before interest and taxes (EBIT) were also negatively impacted by some EUR 10 million. Fugro also reported a net debt/EBITDA of EUR 2.9 million within covenant requirement to not exceed 3.0, and the company expects it to improve in the fourth quarter.
Backlog for the next 12 months, excluding the non-core marine construction and installation business, decreased by 5.6% on a currency comparable basis. Backlog in the early cycle Marine Site Characterisation business line increased 11.1%.
For the full year, Fugro said it anticipates a double-digit decrease in revenue, with only a single digit decrease in the fourth quarter.
“The offshore oil and gas market appears to be reaching its inflection point. The backlog in our early cyclical marine site characterisation business is up, which is an important early indicator. We are also growing in the building & infrastructure market and have strong positions in the renewables market with good potential for further growth,” Paul van Riel said.
“This quarter, results were unfortunately impacted by technical downtime of some vessels and hurricanes. The agreement reached in the quarter to divest the trenching business is an important step in aligning our portfolio with the ‘Building on Strength’ strategy and is accretive to results,” Van Riel explained.
In October, Fugro and Global Marine Group signed an agreement under which Global Marine will acquire Fugro’s trenching and cable laying business and, in return, Fugro will get an equity stake of 23.6% in Global Marine Holdings.