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Fugro revenues drop as oil sector suffers

Bnamericas Published: Friday, April 29, 2016
Fugro revenues drop as oil sector suffers

Fugro reported a 25.8% year-on-year drop in revenue during the first quarter of this year, due to reduced activity in the oil and gas segment during what it described as a "traditionally weak" first quarter.

However, the Dutch data services company reported positive cash flow from operating activities after investments and further reduced its net debt during the quarter to 1.7% of Ebitda.

First-quarter revenues totaled 441mn euros (US$505mn), down from 594mn euros in 1Q15.

The company's backlog for the next 12 months decreased by 22.3% compared to 1Q15, reaching 1.17bn euros (US$1.33bn), and it expects severe pressure on margins over the coming year and cost reduction measures, although cash flow will likely remain positive.

In December, Mexican state oil company Pemex awarded Fugro a US$20mn contract extension to support drilling in the Bay of Campeche. The contract extension includes geophysical and geotechnical field operations, laboratory testing and geoconsulting.

"The exceptionally deep downturn in oil and gas services has by now entered its third year. We had already guided for a very difficult 2016, and during the past months our clients' exploration and production budgets again declined significantly," Fugro's CEO Paul van Riel said.

"Generating positive cash flow is our number one priority."

"Also under these tough market circumstances, we are executing on our strategy and we are successful in strengthening our market leadership positions," the executive added.

He added that the company's non-oil and gas-related building, infrastructure and power markets continue to provide good opportunities in several regions.

Fugro's Roames service provides mapping techniques and data processing for monitoring electric power assets.

"Overall, the company is well positioned to benefit from the recovery in the market when the supply-demand balance is restored and markets start to recover."

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