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Fugro reports return to growth

4C Offshore | James Bernthal-Hooker
By: James Bernthal-Hooker 29/07/2021 Fugro

In its half-year financial results, Fugro reports that it has seen improved margins and a return to growth in Q2 2021.


Mark Heine, Fugro’s CEO, said: “During the second quarter, one year after the outbreak of the pandemic, we have returned to growth. This was largely on account of our renewables business, highlighting our leading position and flexibility to shift assets and capabilities to growth markets. In the second quarter, our infrastructure and oil & gas related activities were also up, after a very challenging 2020.”


The company stated that revenue was up by 14.1% in Q2, the first increase since the beginning of the COVID-19 pandemic. First half-year revenue declined slightly overall, despite growth in renewables and the infrastructure and nautical markets, which represent 60% of Fugro’s revenue.


“We continue to make progress with our diversification”,
Heine continued. “Currently, 60% of our revenue is generated in renewables, infrastructure and nautical. This is in line with our objective to support clients with the energy transition, climate change adaptation and the development of sustainable infrastructure.


“For example, we are presently executing services for offshore wind projects for Atlantic Shores in the US and Thang Long in Vietnam, and a cable route survey for Alcatel’s new fibre-optic cable system connecting North America to Asia. In addition, we continue to implement our remote operations, encompassing remote positioning, hydrography and inspection services. For Woodside in Australia, we recently successfully completed our first remote inspection project with an uncrewed surface vessel, which has much lower CO2 emissions and safety risks than a traditional vessel.”


There were also improved EBIT margins in the marine and land businesses, a consequence of cost control and Q2 revenue growth. Free cash flow was negative EUR 52.5 million, due in part to to higher working capital and what the company describes as “an exceptionally low working capital at year-end 2020.” Fugro expects to see revenue growth, modest margin improvement, and around break-even cash flow overall in 2021.


“Supported by cost reductions implemented over the past quarters and second quarter revenue growth, our margins are up. While there are still Covid uncertainties that impact our business, we expect revenue growth and a modest margin improvement for the full-year. Even though there is still a gap between current performance and our mid-term targets, we are confident that we are back on our Path to Profitable Growth.


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