Fugro has posted an increase in revenues from its offshore wind business of over 3%, but the return could not stop the full group suffering a €26m loss in the first quarter.
The company’s marine division, which includes its renewables work, recorded revenues of €251m, compared with €244m in the same period last year.
Higher revenues were attributed to site characterisation work for offshore wind projects off the US coast as well as offshore oil and gas projects in the Asia Pacific.
The earnings before interest and tax (EBIT) margin for the unit was “high single digit negative”, below the comparable period last year, said the company, although it did not publish full profit figures for the unit.
Storms in the North Sea mainly in January and February and planned dry docks in Europe-Africa resulted in 52% vessel utilisation in the first quarter, compared with 66% in the first quarter of 2019, in addition to a relatively high level of chartering, Fugro added.
Overall, Fugro recorded a loss of over €26m in EBIT in its first quarter 2020 financial results for the whole group, compared with a loss of €19m in the same period in 2019.
Fugro chief executive Mark Heine said: “In the past weeks, the COVID-19 pandemic has taken hold around the world and affected all of us in one way or another. Our priorities are clear: preserve the health and wellbeing of our staff and other stakeholders, ensure business continuity and reduce costs and capex to protect liquidity and profitability.”
He said the situation has been aggravated by the collapse of the oil price resulting in strongly reduced spending by oil and gas clients.
“We still experience solid growth in offshore wind and intercontinental subsea cable routing activities,” Heine said.
He said Fugro is taking “decisive and immediate action” by implementing a programme to significantly reduce costs and capital expenditure.
“As it is impossible to forecast the duration of the current crisis and the magnitude of its impact, we cannot provide a meaningful outlook for 2020. We have several scenarios worked out, we will continue to monitor the situation closely, and decide on additional measures when needed,” Heine added.
To mitigate the impact of the “sudden and unprecedented” deterioration in market circumstances, Fugro is implementing a programme to significantly reduce costs and capital expenditure, to achieve cash savings.
Measures include minimising the use of short-term charters, implementing a hiring and salary freeze, cut on executive pay, measures to reduce the workforce by up to 10%, reducing overhead costs and further optimising service offering through rationalisation of the company’s geographical footprint.