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Q1 2020 trading update

First impact of Covid-19 and related deteriorated oil & gas market

30 Apr 2020   07:00 CET
Leidschendam, the Netherlands

  • Priority is to preserve the health and wellbeing of our staff and other stakeholders.
  • In Q1, the impact of Covid-19 varied by region. Overall revenue was still in line with last year with growth in Asia Pacific and decline in the other regions; revenue and EBIT was especially affected in Europe-Africa. 
  • Backlog flat year-on-year with good order intake in January and February; very low in March. 
  • Covid-19 and deteriorated oil and gas market will continue to hamper results in the upcoming period; Fugro is taking measures to significantly reduce costs and capital expenditure.
  • Seabed Geosolutions’ results strongly impacted by project cancellation.
  • Net debt/EBITDA improved to 1.7 compared to 1.9 at year-end 2019, supported by sub-10 equity placement and divestment proceeds.
  • Liquidity is good with close to EUR 400 million in cash and available facilities.
  • Given high level of uncertainty, at this moment the company cannot provide a meaningful outlook for 2020. 
Key figures (x EUR million)
from continuing operations
unaudited
Q1 2020 Q1 2019 Comparable growth1
Revenue 358.4 355.8 0.8%
Adjusted EBITDA2 7.2 14.6
Adjusted EBIT2 (21.5) (16.4)
Adjusted EBIT%2 (6.0%) (4.6%)
EBIT (26.5) (19.4)
Cash flow from operating activities after investing (21.5) (18.3)
Backlog next 12 months 890.0 919.9 0.0%
Corrected for currency effect
Adjusted for onerous contract provisions, restructuring cost and impairment losses

Mark Heine, CEO: “In the past weeks, the Covid-19 pandemic has taken hold around the world and affected all of us in one way or another. Our priorities are clear: preserve the health and wellbeing of our staff and other stakeholders, ensure business continuity and reduce costs and capex to protect liquidity and profitability.

During the past two years, we made significant progress with the implementation of our Path to Profitable Growth strategy, including divestment of non-core activities, leading to a gradual recovery of our results and cash flow. While we were anticipating further growth of our business, the sudden and unprecedented deterioration in market circumstances due to the pandemic has created a new reality.

For Fugro, the situation has been aggravated by the collapse of the oil price resulting in strongly reduced spending by oil and gas clients. We still experience solid growth in offshore wind and intercontinental subsea cable routing activities. In the quarter, the pandemic already had a significant impact in Europe-Africa, in addition to adverse weather conditions. The Americas and Middle East & India were slightly impacted. Asia Pacific reported a significant improvement thanks to the rationalisation of the marine asset integrity business last year.

We are taking decisive and immediate action by implementing a programme to significantly reduce costs and capital expenditure. As it is impossible to forecast the duration of the current crisis and the magnitude of its impact, we cannot provide a meaningful outlook for 2020. We have several scenarios worked out, we will continue to monitor the situation closely, and decide on additional measures when needed.

I am proud that thanks to our dedicated staff, we are able to keep operations going within our safety rules and the guidelines issued by local authorities. Backed by the knowledge, experience and commitment of our staff, the innovative solutions we provide and our diversified customer base, we will succeed in making further progress as the global leader in our field, and in making our way back to our Path to Profitable Growth.”

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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