Fugro posts sharp revenue decline, eyes H2 recovery

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Friday, February 24, 2017

Netherlands offshore survey firm Fugro posted a 25% revenue decline for full-year 2016 and expects further decline in 1H17, but which is likely to bottom our toward the latter part of the year.

Despite cash flow remaining positive for the full year, the company reported a net loss of 309mn euros (US$326.5mn), an improvement on its 372.5mn-euro loss in 2015, while revenue was 1.77bn euros (US$1.87bn), down from 2.36bn euros for full-year 2015.

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Backlog for 2017 is 1.16bn euros in comparison with 1.32bn euros in 2015.

In Mexico, Fugro is engaged in a 2D seismic survey for TGS as part of its Gigante survey. State oil company Pemex awarded the company a US$20mn contract extension in December 2015 to support drilling in the Bay of Campeche, and which Fugro pursued throughout 2016.

"We anticipate that, for the first half of 2017, the offshore oil and gas market will continue to decline significantly," Fugro CEO Paul van Riel said in an earnings statement.

"Both the stabilization of our backlog over the last few months and clear signs that pressure on the oil supply side is beginning to build, indicate that our market may bottom out towards year end," he added.

"The downturn in our largest market, oil and gas services, continued unabated in 2016. We reduced capacity and cost and at the same time succeeded in strengthening our market positions. This could however not offset increased price pressure."