Highlights for the first quarter 2014
- Year-on-year revenue growth in the first quarter, excluding multi-client sales, of 6.0%, or 11.4% at constant exchange rates.
- Quarterly margin decreased significantly year-on-year.
- Revenue and margin were impacted by:
- adverse weather conditions in multiple regions, impacting offshore activities in all divisions and aerial mapping, resulting in low utilisation and production.
- operational issues at a first-time leading edge deepwater well de-risking project for the geotechnical division, as well as difficult operational circumstances on two projects for Seabed Geosolutions.
- Some fall off in the quarter of work volume in the oil and gas market in certain regions.
- Fugro’s financial position remains healthy with net debt over EBITDA of 1.6.
- Backlog for the remainder of the year strong at EUR 1,597 million, up 11.9% at constant exchange rates.
- Outlook: for the first half of 2014, Fugro expects high single digit revenue growth at constant exchange rates excluding multi-client sales. Barring unforeseen circumstances and any impairments, the EBIT margin will recover in the second quarter but is still expected to be significantly lower over the first half of 2014 compared to the first half of 2013.
The first quarter is typically slow due to seasonal weather patterns, particularly influencing our offshore activities. This year the weather conditions were exceptionally challenging in offshore North West Europe and in other parts of the world, resulting in low utilisation and production for our vessels and adversely impacting our aerial mapping business. We also had to deal with certain operational issues and some fall off in oil and gas work in the quarter. All of this had a significant impact on profitability. In our business, utilisation and financial results can vary strongly per quarter. They are influenced not only by market behaviour but also by the weather and timing of award and execution of individual projects. Quarterly results should be interpreted against this background. Based on our strong backlog and barring any unforeseen circumstances, I am confident our performance will improve during the coming quarters.