Dutch subsea and survey specialist, Fugro, has ended the year 2015 with a loss of €372.5 million (€410.4 million) as the oil and gas market slump continues to drive revenues down and stress offshore services players.
The company managed to narrow the loss of €459 million ($505.7 million) from last year on better performance of Seabed Geosolutions division, curtailed investments, lower working capital, sale of multi-client data library, and sale and lease back of a vessel.
However, impairments, onerous contract charges and restructuring costs in 2015 were at some €363 million compared to €630 million in 2014.
In addition, Fugro said that due to the negative net result, the company will not propose to pay a dividend over the year 2015.
Full-year revenue was €2.36 billion, down approximately 8% from €2.57 billion in 2014.
In 2105, Fugro reduced its headcount by 1,577 people (12% of total personnel), compared to the initially planned reduction of 750. The fleet was also reduced. Geotechnical vessels were cut from 11 to 7, the survey fleet capacity was slashed by around 20% and the subsea fleet by two long-term charters.
In 2016, we will continue to reduce costs, headcount and vessels proactively, in line with activity levels, the company said in its earnings report.
Fugro has reported 20.4% reduced backlog at constant exchange rate when compared to a year-ago period and down 3.7% compared to the end of the third quarter of 2015. Furthermore, the company noted that, in particular, backlog for Seabed Geosolutions is under pressure, as tenders for new projects are being delayed.
Paul van Riel, CEO, said: “We are dealing with an unprecedented downturn in our largest market: oil and gas services. We are reducing capacity, operating costs and investments, as well as divesting non-core assets.
“The year 2016 will be another challenging year for the oil and gas industry based on indications that the present over-supply conditions will continue. In our building, infrastructure and power markets, we see good opportunities in several regions. We will continue to manage through the downturn by proactively adjusting our cost and asset base in line with activity levels. Generating positive cash flow continues to be our number one priority.”