Fugro has announced further headcount reduction of 200 employees in the coming half year, in particular in the Subsea Services and Geotechnical divisions as it anticipates an even more challenging market in the second half of 2015.
The Dutch offshore services provider generated a year-on-year revenue growth of 4.3% climbing at €1.23 billion from €1.18 billion driven by its Seabed Geosolutions division.
However, despite the positive EBIT of €70.4 million, the company recorded a net loss of €9.9 million on higher interest expenses and relatively high income tax expenses. Nevertheless, this narrows last year’s loss of €270.6 million, mainly on Seabed Geosolutions boost and divestment of the multi-client data library completed with net proceeds of €101.9 million.
Fugro said it expects to realise a lower EBIT in the second half of 2015, compared to the second half of 2014 (excluding exceptional items), mainly related to Subsea Services, which is confronted with a significant decline in backlog in combination with high operational leverage.
Furthermore, Fugro’s geotechnical fleet has been reduced by one vessel and will be further reduced at limited costs to seven by year-end. According to the company, by year-end, the survey fleet capacity will be further reduced by 10-15% compared to December 2014. In addition, in the first half of the year the Subsea Services division successfully terminated 1 long-term charter early, with another reduction of 1 charter anticipated before year-end.
The company said it anticipates the oil services market (around 80% of Fugro’s business) to remain weak for the foreseeable future and will continue to drive cost and capacity down in the second half of the year. This should partially offset the anticipated margin decline.