Weakening Energy Sector a Factor in Fugro Profit Slide

By George Backwell
Thursday, July 10, 2014
Seismic data acquisition: File image

Following a weak first quarter and due to poorer than expected results during the past months, Fugro says it  has decided to disclose preliminary non-audited information on its performance in the first half of 2014. Excerpts as follows:

Fugro expects to report over first half of 2014:

  • Low single digit EBIT margin (excluding non-cash impairments). This compares to an EBIT margin of 11.4% in the same period last year, or 10.3% excluding special items1.
  • Non-cash impairments in a range of EUR 300-350 million.
     

Operational performance issues Q2 2014
After the weak first quarter, improvement in results during the past months has been lower than
expected mainly for the following reasons.

  • The weakening of the oil and gas market, as a result of decelerating growth of capital spending, is resulting in project delays and increased margin pressure in all divisions.
  • The Geoscience division is the single largest contributor to the disappointing performance:
  • Losses in Seabed Geosolutions continued and are larger than anticipated due to underutilisation in the OBN market segment, and some delays on the mobilisation of two large OBC projects.
  • The weakened seismic market is resulting in much lower multi-client sales and consequently will lead to a significantly lower EBIT contribution than in the same period in 2013.
  • The improving trend in the Subsea Services division has been marred by two specific issues.
The first is an engine room fire on the largest vessel in the fleet that resulted in a total of about 7 weeks of non-compensated down time. The second is an ongoing strike of 3 diving crews in Brazil which has had a 4 week impact in the qua

Paul van Riel, CEO commented: 'The development of the results this year so far has been disappointing. During the last quarter it has become increasingly clear that the oil and gas market has weakened. As a consequence we will take impairments on some of our assets. The weakening of the market, in combination with some project execution issues, has impacted our performance. We are taking necessary measures to improve profitability, guided by our 'Growth through Leadership' strategy. We believe that the long term market fundamentals support our strategy, albeit that the expected growth will be somewhat slower than we originally assumed.'

Fugro adds that the first half-year results will be published, as scheduled, on 11, August 2014.
 

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Equinox Class Scrubber Systems Receive Certification

Algoma Central Corporation (“Algoma”), the largest Canadian shipowner and operator of domestic Great Lakes vessels announces that it has received all requisite

MARAD Tests Alternative Power for Ships

The Maritime Administration (MARAD) is testing state-of-the-art, environmentally efficient technology onboard the Training Ship (TS) Kennedy.   The National Defense

Finance

Italy Ending Med Sea Rescues

Rights groups warn of risk of more deaths; EU mission Triton will have more limited scope. Italy said on Friday it would close a sea rescue mission that has saved the lives of more than 100,

St. Lawrence Seaway Workers Extend Strike Deadline

The union that represents workers on the St. Lawrence Seaway, the waterway that links the Great Lakes and the Atlantic Ocean, has extended a strike deadline to Monday at 5 p.

Mitsubishi Exits Cruise Business; Books $357m Loss

Mitsubishi Heavy Industries, Ltd. (MHI) announced its decision to book an extraordinary loss from its cruise ship business in the company's consolidated financial

Energy

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Arctic Oil: Bourbon to Enter Arctic Market in 2016

Bourbon plans to enter the growing Arctic Offshore market in 2016 with a new Anchor Handling Tug Supply (AHTS) vessel built by the Vard shipyard. This AHTS (Anchor

Libyan Government: Ports, Oil Fields Safe

Libyan oil ports and fields are safe and under government control, the country's interior minister said on Friday after visting the eastern Brega port. "This

 
 
Maritime Standards Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2096 sec (5 req/sec)