Better contracting conditions and high activity back Fugro

Fugro’s revenue for the third quarter of 2023 is €608.9 million, an increase from €480.2 million reported in the same quarter of 2022 – a result said to be due to better contracting conditions, high activity levels and good project execution.

Fugro reported that its revenue was up by 32.6% on a currency-comparable basis, by capturing high client demand in all regions, most notably in renewables and oil & gas.

In Marine, revenue increased by 46.6%, supported by an increase in the number of paid vessel days, enabled by a larger geotechnical fleet and higher pricing. Overall, the utilization rate of Fugro’s owned and long-term chartered vessels was 75%. Land revenue was in line with last year.

Driven by a significantly higher EBITDA of €135.9 million, operating cash flow before changes in working capital increased to €134.7 million, an increase said to be offset by higher working capital as a result of high revenue growth. Capital expenditure was €31.7 million, compared to €29.1 million last year.

Fugro said its 12-month backlog continues to be robust with a 14.5% increase after steep growth during previous quarters.

“I am excited to report another strong set of results. All regions contributed to significantly higher margins, in particular the Americas and Europe-Africa. Overall, better contracting conditions, high activity levels and good project execution led to a very strong performance especially in marine site characterisation,” said Fugro CEO Mark Heine.

“We again realised substantially higher revenue in renewables, to one third of group revenue year-to-date. Despite recent news flow around delays in several offshore wind projects, we anticipate continued growth going forward, supported by the recent launch of the ‘Wind Power Package’ in the EU. While the energy transition is underway, the world needs reliable and affordable energy. Therefore, we also expect further growth in traditional energy, especially in the gas market.”

For the full year of 2023, Fugro expects ongoing growth in the energy markets, in particular renewables, resulting in strong revenue growth.

In the fourth quarter, the company will unwind the sale and leaseback arrangement for the Fugro Scout and Fugro Voyager and will take early delivery of the vessels instead of extending the financing arrangement, resulting in a further reduction of gross debt and financing costs.

Total capital expenditure for 2023 is estimated at around €200 million, excluding the reclassification of the Fugro Scout and Voyager from right-of-use assets to fixed assets.

“Over the past years, we have successfully transitioned into a diversified company with a sizeable position in renewables and significantly improved results. We are ready for the next phase and will update the market on our strategy and mid-term targets at our Capital Markets Day on 14 November 2023,” Heine said.

Recent project awards

In the Europe-Africa region, Fugro is in charge of geotechnical site investigations for Dutch Nederwiek 2 & 3 offshore wind zones and a pre-construction geophysical survey for Denmark’s Thor offshore wind farm, a metocean survey for the proposed Salamander floating wind project off Scotland, and an environmental and geophysical survey offshore Namibia for future energy operations.

In the Americas, the Dutch company will perform geotechnical engineering services for a blue ammonia facility in Louisiana for St. Charles Clean Fuels, and won a geotechnical contract from Community Offshore Wind, while in Asia Pacific, two geotechnical site investigations and one geophysical survey for offshore wind projects in South Korea were awarded, and pipeline inspection services using uncrewed surface vessels (USVs) for Santos in Australia.

In the Middle East & India region, Fugro secured a package of offshore surveys using the Blue Essence USV in support of cable laying activities for ADNOC’s Das Island project, a nearshore geotechnical survey for an industrial port development in Saudi Arabia operated by Aramco and a contract for ROV services with Saipem for the North Field Production Sustainability project offshore Qatar.