• Careers
  • Fugro Global
  • Global

Fugro HY 2016: Ongoing decline oil & gas market continues to impact results

Relentless focus on positive cash flow and strengthening market leading positions

04 Aug 2016  
Leidschendam, the Netherlands

  • Year-on-year revenue decline of 26.9% or 24.5% on a currency comparable basis in line with the market.
  • EBIT margin (excluding exceptional items) decreased to 0.2% due to steep decline in activity and strong pricing pressure.
  • Agreement reached to divest the Asia Pacific subsea services business, in line with strategy to focus on core activities.
  • Additional measures implemented to reduce third party and personnel costs in line with lower volumes.
  • Deteriorated market conditions led to non-cash impairments and other exceptional items of EUR 151.7 million.
  • Cash flow from operating activities after investments of EUR 67 million, including proceeds from the sale and lease back of a geotechnical vessel and the sale of the CGG term loan.
  • Net debt to EBITDA of 1.8 compared to covenant requirement of below 3.0.
  • Outlook 2016: positive cash flow from operating activities after investments, further reduction of cost base and negative low single digit EBIT margin (excluding exceptional items) expected for the full year.
Key figures (x EUR million) HY 2016 HY 2015
Revenue 904.9 1,237.7
currency comparable growth (24.5%) (7.3%)
EBITDA1 excluding exceptional items 2 98.9 197.7
EBIT excluding exceptional items2 1.4 70.4
EBIT margin excluding exceptional items (%)2 0.2% 5.7%
Net result (202.1) (9.9)
Backlog next 12 months 1,065.2 1,506.8
currency comparable growth (26.3%) (23.9%)
Cash flow from operating activities after investments 66.8 121.8
Net debt/ EBITDA3 1.8 2.0

The information in this report is unaudited

1 EBITDA is EBIT before depreciation, amortisation (including amortisation on multi-client library) and impairments related to goodwill, other intangible assets, property, plant and equipment

2 Impairments, onerous contract charges and restructuring costs of EUR 151.7 million in HY2016 compared to EUR 26.0 million in HY2015

3 Refer to Annual report 2015 for definition EBITDA for covenant purposes

In the first half of this year, budgets of our oil & gas clients again declined significantly, with new projects being deferred or cancelled and strong price pressure as a result of overcapacity. We are continuing to adjust our cost base and capacity to market reality. This enables us to largely counter the lower volumes; the strong rate reductions, however, result in severe margin pressure. The building, infrastructure and power markets continue to provide good opportunities except in the countries that are hit hard by low oil and gas and other commodity prices. I am pleased that we reached an agreement on the divestment of our Asia Pacific subsea business. That fits in our strategy to focus on our core business while the minority stake we obtain in the acquiring entity allows us to participate in the benefits once the market recovers. Our key priorities remain generating positive cash flow to delever the balance sheet and a further strengthening of our market leading positions. The price reductions and efficiency gains throughout the supply chain are significantly lowering the oil price required to justify investments. In combination with increasing evidence that a balance between oil supply and demand will be achieved in the course of next year, this is expected to spur project approvals, also in a lower oil price environment. It is, however, still uncertain when this will have positive impact on our business.

For more information


Serge van de Ven

+31 (0) 70 31 11129


Catrien van Buttingha Wichers

+31 (0) 70 31 15335


Share this page

Learn about Fugro

Case studies

Explore our global expertise in this collection of real-world projects where we illustrate solutions for clients across many industry sectors.

More Information

Fugro World

Regular articles from our people that provide insight and thought leadership into industry challenges, technologies and projects.

More Information

News releases

Catch up on the latest news and project awards to get an insight into our diverse range of services and the sectors we operate in.

More Information

Keep up to date with the latest news and stories from Fugro, direct to your inbox