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Fugro half-year financial results 2020

Fugro results reflect quick response to Covid-19 and strong growth in offshore wind

29 Jul 2020   07:00 CET
Leidschendam, the Netherlands

  • Second quarter revenue declined by 19.3% due to Covid-19 and downturn in oil and gas markets, partly offset by strong growth in offshore wind. 
  • Due to decisive and immediate cost reductions, robust EBIT margin of 7.4% in the second quarter.
  • Recovery of order intake during second quarter, resulting in backlog growth of 1.1%. 
  • Non-cash impairment of Seabed Geosolutions’ assets in second quarter by EUR 40.3 million.
  • Net debt/EBITDA improved to 1.7 compared to 1.9 at year-end 2019.
  • Revolving credit facility extended to September 2021; review of refinancing options ongoing.
  • Outlook 2020: second half-year EBIT(DA) expected to improve compared to the first half-year. For the full year, Fugro expects a positive free cash flow.

Key figures (x EUR million) from continuing operations unless otherwise indicated1

H1 2020 H1 2019 Q2 2020 Q2 2019
Revenue 707.4 796.9 349.0 441.1
    comparable growth2 (10.3%) 5.7% (19.3%) 5.3%
Adjusted EBITDA3 61.3 83.3 54.1 68.7
Adjusted EBIT3 4.3 23.3 25.8 39.7
Adjusted EBIT margin3 0.6% 2.9% 7.4% 9.0%
EBIT (10.7) 16.8 15.8 36.2
Net result4 (51.6) (17.6)
Net result incl. discontinued operations4 (113.1) (86.0)
Backlog next 12 months 845.2 856.3 845.2 856.3
    comparable growth2 1.1% 0.5% 1.1% 0.5%
Cash flow operating activities after investing 18.2 (34.4) 39.7 (16.1)
Cash flow operating activities after investing incl. disc. ops. 15.5 (58.9) 33.0 (25.2)
Net debt/EBITDA5 1.7 2.8 1.7 2.8
 
  1. Seabed Geosolutions is held for sale
  2. Corrected for currency effect
  3. Adjusted for restructuring costs (EUR 8.2 million), impairment losses (EUR 3.4 million) and certain other costs (EUR 3.4 million); all amounts relate to EBIT impact in H1 2020
  4. Attributable to the owners of the company
  5. Covenant calculation includes Seabed Geosolutions and excludes the impact of IFRS 16

Mark Heine, CEO: “The past months were dominated by the pandemic and the actions we took to deal with this unprecedented situation. Our first priority was and continues to be the health and safety of our employees. In many countries people are working from home, and at times marine crews were confronted with longer rotation periods and specific mitigation measures such as pre-boarding quarantines. Despite these operational complexities and in close cooperation with clients we have been able to continue working on the majority of our projects. In fact, this period has clearly demonstrated the value of our advanced remote and automated solutions, supporting clients in their critical operations. 

To protect our profitability and liquidity, we have acted quickly and decisively by implementing a comprehensive cost and capex reduction programme. This enabled us to improve our EBIT margin in the second quarter in very challenging market circumstances. For the second half-year, we target an improvement in our EBIT compared to the first half, increasingly benefiting from cost measures, assuming no material impact from additional Covid-19 developments.

Even in the current tough macro environment, our offshore wind business grew by 40% in the second quarter. This shows our leading position in this market and flexibility to shift our assets and capabilities to new growth markets. During the first half year, we have both completed and won numerous prestigious site characterisation projects for offshore wind throughout the world. This is in line with our strategy to further grow in this market and become less dependent on the oil and gas market.

For the coming quarters, our management agenda is clear: preserve the health and wellbeing of our employees and other stakeholders, continue to implement cost and capex reductions, complete the turnaround of the underperforming land business, ensure the refinancing, and divest Seabed Geosolutions. In the meanwhile, we continue to enhance our service delivery with new market leading digital solutions.”

For more information

Media

Edward Legierse
Contact

+31 (0) 70 31 11147

Investors

Catrien van Buttingha Wichers
Contact

+31 (0) 70 31 15335

 

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