Fugro to Cut 500 More Jobs

Fugro said it will lay off around 500 employees in the coming quarters as it feels the pressure of deteriorating market and anticipates even more challenging times ahead.

The company said it’s still early to determine which divisions and regions will be affected by this new headcount reduction.

In addition, the Dutch offshore services provider, reporting a headcount of 1054 at the end of Q3 2015, said it expects non-cash impairments in the range of EUR 250 to 300 million in the fourth quarter, mainly related to its subsea services division, which is under most pressure.

The company has reduced its fleet from 11 to 7 vessel in geotechnical division and terminated 2 long-term charters in Subsea Services. However, Fugro said it will terminate another charter tied to Subsea Services in 2016 and, if necessary, it will further reduce its fleet in geotechnical and survey divisions.

In the third quarter 2015, Fugro’s revenue declined some 13 per cent year-on-year, in line with oil and gas market developments, which makes up for 78 per cent of the company’s business. Subsea revenue dropped approx. 45 per cent and 12-month subsea backlog has been reduced by 35 per cent compared to the corresponding period in 2014.

On a positive note, the new sale & lease back deal for 2 geotechnical vessels should bring net cash proceeds of around EUR 100 million in the fourth quarter. Furthermore, Fugro has reached an agreement with lenders for refinancing of current revolving credit facility into a new EUR 500 million 5-year facility.