Fugro Lines Up More Layoffs, Dumps Asia Pacific Subsea Unit

Fugro has revealed additional workforce trimming plans and disposal of its subsea services unit in efforts to align its business to current market conditions and lower activity levels.

The Dutch subsea and survey specialist has ended the first six months of 2016 (1H 2016) with a loss or €202 million ($225 million) of €2.49 per diluted share, compared to some €10 million loss in 1H 2015.

Total revenue decreased by 24.5 percent on a currency comparable basis from €1.24 billion to €905 million.

The company booked additional impairments and other exceptional items for a total amount of €151.7 million.

In the first six months, Fugro’s personnel was reduced by 585. Including last year’s reduction of 1,577, personnel has by now been reduced by more than 15% in total and by around 35% in the businesses most exposed to the oil and gas market.

However, the company said that its ongoing restructuring is expected to result in a total headcount reduction of at least 1,000 in 2016.

“We are continuing to adjust our cost base and capacity to market reality,” said Paul van Riel, CEO.

In addition, the company said that, for the remainder of the year, more reductions will be made to its fleet, as needed. Year-to-date, the active fleet was further reduced by 5 vessels.

Furthermore, Fugro has signed an agreement with Shelf Subsea Services to divest its Asia Pacific subsea services business. Shelf Subsea will acquire the Fugro Subsea Services business in Asia Pacific for a cash consideration of AUD 20 million (around EUR 14 million) and an equity share of around 25% in Shelf Subsea Services. The business includes 3 vessel charter contracts, 1 owned vessel and 18 ROVs.

“I am pleased that we reached an agreement on the divestment of our Asia Pacific subsea business. That fits in our strategy to focus on our core business while the minority stake we obtain in the acquiring entity allows us to participate in the benefits once the market recovers,” van Riel added.

Fugro’s backlog for the next 12 months stands at approximately €1 billion, against €1.5 billion in the prior-year comparable period.

Subsea World News Staff