Fugro targets more offshore wind after red numbers in 2020

Dutch subsea and survey specialist Fugro has seen its loss almost doubled in 2020 with revenues down some 12 per cent due to the impact of Covid-19 and the downturn in oil and gas.

The company recognised net loss of €74 million in 2020, against net loss of €39.6 million in 2019.

Revenue declined in the full year at close to €1.4 billion, versus €1.63 billion at the end of 2019.

Downturn in the oil and gas was partly offset by strong growth in offshore wind. Fugro generated 28 per cent more revenue from offshore wind than last year.

The second half of 2020 saw 59 per cent revenues coming from the renewables, infrastructure, nautical and other non-oil and gas markets.

Growth in offshore wind and cost reductions backed margin recovery to 6.5 per cent in the second half-year compared to 0.6 per cent in the first half of 2020.

Mark Heine, CEO said: “Fugro’s results reflect our resilient operating model, which enabled us to quickly respond to the impact of the pandemic and to continue to benefit from very strong growth in offshore wind.”

In March 2020, Fugro initiated comprehensive cost reduction programme to deal with the impact of the pandemic. This included a workforce reduction by around 10 per cent, a reduction of overhead costs, a cut on executive pay and minimised usage of short-term charters.

The implementation is on track and should achieve annualised savings of around €130 million.

Fugro said on Friday it has a 12-month order backlog of €866.2 million; 8 per cent lower than the pre-Covid backlog at the end of 2019.

“Our ambition is to support the transition towards carbon neutrality, sustainable infrastructure and climate resilience. With almost 60 per cent of our revenue coming from offshore wind, infrastructure, nautical and other non-oil and gas markets in the second half of the year, the diversification of our portfolio is well underway,” says Heine.

Fugro expects to return to more normal market conditions in the second half of the year. It also targets to be carbon neutral by 2035.

For 2021, offshore wind should show continued growth for Fugro.

After a stagnation in 2020, Fugro also expects growth in the infrastructure markets to resume as of 2021. The oil and gas market will remain volatile in 2021.

Fugro’s stake in Seabed Geosolutions is classified as ‘held for sale’ as per half year 2019. The company believes it it will most likely sell Seabed’s business in the first half of 2021.