- Year-on-year revenue decline of 19.5% on a currency comparable basis, to a large extent driven by lack of activity at Seabed Geosolutions.
- EBIT margin was low single digit, compared to mid-single digit in the same period last year. Results were below expectations due to lower revenue, mainly caused by technical downtime of some vessels, mainly in Europe, and hurricanes in the Americas, negatively impacting EBIT by around EUR 10 million.
- Agreement reached to divest the non-core trenching and cable-laying business.
- Net debt/EBITDA of 2.9 within covenant requirement to not exceed 3.0; expected to improve in the fourth quarter.
- As a matter of financial prudency, today Fugro launches a subordinated convertible bond of EUR 100 million. Proceeds will be offered to the USPP noteholders for early repayment. Pro forma net debt/EBITDA per the end of September is 1.8 including assumed proceeds of EUR 100 million from this bond.
- Backlog for the next 12 months, excluding the non-core marine construction and installation business, decreased by 5.6% on a currency comparable basis. Backlog in the early cycle Marine Site Characterisation business line increased 11.1%.
- Outlook 2017: For the full year Fugro anticipates a double-digit decrease in revenue, with only a single digit decrease in the fourth quarter. The EBIT margin (excluding exceptional items) is expected to improve during the second half of the year compared to the first, resulting in a negative low-single digit margin for the full year. Cash flow from operating activities after investments will be negative for the full year mainly as a result of the later than anticipated start of a Seabed Geosolutions project, pushing the related cash collection into early 2018.
|Key figures (x EUR million)
|Backlog remainder of the year
|Backlog next 12 months
|Net debt/ EBITDA
*Revenue corrected for currency effect; backlog corrected for currency effect and for portfolio changes related to marine construction & installation activities
Paul van Riel, CEO: “The offshore oil and gas market appears to be reaching its inflection point. The backlog in our early cyclical marine site characterisation business is up, which is an important early indicator. We are also growing in the building & infrastructure market and have strong positions in the renewables market with good potential for further growth.
This quarter, results were unfortunately impacted by technical downtime of some vessels and hurricanes. The agreement reached in the quarter to divest the trenching business is an important step in aligning our portfolio with the ‘Building on Strength’ strategy and is accretive to results.
We continue to relentlessly implement cost reduction and performance improvement measures to restore results and generate positive cash flow going forward. At the same time we are investing in delivery excellence and innovation to enhance our position with clients.”