Fugro Delivers on Mid-Term Targets with Offshore Wind Activities Leading the Way

July 28, 2023, by Nadja Skopljak

Fugro has reported a revenue of over EUR 1 billion for the first half of 2023, representing a 24.1 per cent growth from EUR 833 million in the first half of 2022, said to be due to continued high client demand in energy markets, in particular for offshore wind site characterization solutions and related nearshore activities.

In 1H 2023, Fugro saw revenue of EUR 748.4 million in marine, an increase of 30.9 per cent compared to 1H 2022, mainly driven by site characterizations for offshore wind farms and increased activity levels in the oil & gas markets.

Revenue in land was at EUR 269.9 million, increased by 8.6 per cent, supported by nearshore activities for offshore wind and LNG developments.

Vessel utilization was 73 per cent, compared to 67 per cent in the comparable period last year.

Overall, renewables grew by 60 per cent, said to be a result of more mature energy transition roadmaps in an increasing number of countries. Renewed interest in traditional energy sources resulted in a 36 per cent growth in the oil and particularly gas market.

“I am very pleased to report a strong set of results. All regions contributed to significant higher margins and cash generation, in particular the Americas and Europe-Africa. Overall, better contracting conditions, increasing asset utilisation and better operational performance led to a significant improvement in particular in the marine site characterisation business,” said Mark Heine, Fugro’s CEO.

“Across the globe, we are benefitting from high client demand for climate change adaptation and energy transition solutions, in particular for offshore wind developments. We are continuing on our trajectory of further diversification into future proof markets. At the same time, as expected, revenue in oil & gas is growing due to the need for energy security.”

Capital expenditure was EUR 71.8 million, including the delivery of the first of the two geotechnical vessels planned for this year. Net debt amounted to EUR 266.3 million, compared to EUR 207.4 million at year-end 2022, due to an increase in leases, the Dutch company reported.

The 12-month backlog increased by 21.3 per cent, supported by the marine business lines in all regions, while the land backlog declined, mainly as a result of business rationalizations in Europe-Africa.

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To remind, for the first quarter of the year, Fugro reported revenue of EUR 465.8 million, representing an increase of 27.5 per cent, again related to offshore wind site characterization solutions, with all regions reporting double-digit growth.

For the whole year of 2022, the company’s revenue was EUR 1.76 billion, a 14.8 per cent growth in comparison to 2021, due to a 42 per cent increase in offshore wind.

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

The EBIT margin and return on capital employed are anticipated to be within the mid-term target range of 8-12 per cent and 10-15 per cent respectively, and free cash flow is anticipated to be positive. Capex is estimated at EUR 200-225 million, including the acquisition of two geotechnical vessels, and investments in Fugro’s uncrewed vessel strategy and net zero roadmap.

“On the back of this set of results, the strength of our markets and our unique positioning, we are confident that we will deliver on our mid-term targets this year. To remain successful in capturing the market opportunities and secure controlled growth, we continue to invest in our people and asset base. At our capital markets day on 14 November 2023, we will update the market on our strategy and future targets,” Heine said.