Fugro delivers on mid-term targets with offshore wind activities leading the way

Fugro has reported a revenue of over €1 billion for the first half of 2023, representing a 24.1% growth from €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.

Source: Fugro

In 1H 2023, Fugro saw revenue of €748.4 million in marine, an increase of 30.9% 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 €269.9 million, increased by 8.6%, supported by nearshore activities for offshore wind and LNG developments.

Source: Fugro

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

Overall, renewables grew by 60%, 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% 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 €71.8 million, including the delivery of the first of the two geotechnical vessels planned for this year. Net debt amounted to €266.3 million, compared to €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%, supported by the marine business lines in all regions, while the land backlog declined, mainly as a result of business rationalizations in Europe-Africa.

To remind, for the first quarter of the year, Fugro reported revenue of €465.8 million, representing an increase of 27.5%, 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 €1.76 billion, a 14.8% growth in comparison to 2021, due to a 42% 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% and 10-15% respectively, and free cash flow is anticipated to be positive. Capex is estimated at €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.