Fugro to cut more jobs by year-end

In 2H 2015, Fugro’s revenue increased by 4.3%, however, the Netherlands-based company will cut an additional 200 jobs from its workforce by the end of the year.

Image from Fugro.

Total revenue for 2H 2015 came in at about US$1.35 million (€1.2 million), compared to $1.3 million (€1.1 million) year-over-year.

In the company’s geotechnical division, revenue was at $4.19 million in 2H, a 4.5% increased compared to 1H’s $4 million.

Fugro’s divestment of the multi-client data library to Spectrum ASA resulted in net proceeds of $111.7 million.

Capital expenditure was significantly dropped 54% to $96 million from $147 million year-over-year.

“The further deterioration of the oil and gas market has resulted in reductions of our customers’ project budgets, causing revenue decline and margin pressure for oil services companies such as Fugro. We do not expect the market to recover in the foreseeable future. We are managing through this downturn by proactively reducing costs and implementing performance improvement measures. This has resulted in an improved margin, in particular in Seabed Geosolutions and also in Survey and offshore Geotechnical,” Paul van Riel, Fugro CEO said.

Fugro’s offshore revenue decreased by 16.1% at constant currencies to $1.5 million due to the deterioration of the oil and gas market. In addition, its offshore fleet was reduced to 10 vessels by the end of June from 11 at the start of the year to further re-align with market conditions. The fleet will be reduced to seven owned vessels by year-end. The intended sale and charter back of two geotechnical vessels is progressing, and the divestment of the Synergy vessel will take more time, Fugro said.

Also seeing a reduction is the company’s workforce. According to Fugro, the headcount reduction program is on schedule, with a gross reduction of 755 employees in targeted areas (compared to the end of 2014) partially offset by hires in specific growth areas, such as the Middle East, resulting in a net reduction of 616. In the 2H 2015 report, the company announced the reduction of 200 employees by the end of 2015, in particular in the Subsea Services and Geotechnical divisions.

Fugro’s seafloor drilling was positive in the period with the first seafloor drill successfully completed for a deepwater campaign in the Gulf of Mexico, in addition to a second seafloor drill that is being commissioned to be positioned in Australia.

ExxonMobil Alaska LNG also awarded Fugro a large geotechnical and geophysical program for a large offshore geotechnical program extension in East Africa, and a multi-well intervention campaign in the Gulf of Mexico using the Synergy.