Fugro has reported a revenue increase of 23.3% in the first quarter of 2022, said to be supported by all regions and business lines and driven by high client demand in the energy market, both renewables and oil & gas, and the infrastructure market.
The total revenue in Q1 2022 was €365.4 million, compared to €283.8 million from Q1 2021.
€249.7 million was reported for Fugro’s marine business, an increase from €189.1 million in Q1 2021, and €115.6 million for its land business, an increase from €94.7 million in the same quarter of the year before.
The 12-month backlog grew in all regions, by 27.8% to €1,164.0 million.
In a seasonally weak quarter, EBIT improved year-on-year to around break-even. The margins of both marine and land increased, specifically supported by the Americas and Asia Pacific, despite higher cost levels due to rising inflation and lingering impacts of the pandemic.
This year, in the typically low first quarter, a relatively large number of scheduled dry dockings of vessels were executed, which resulted in 61% vessel utilization compared to 67% in the first quarter last year, and an increase in the number of short-term charters.
Free cash flow was minus €7.2 million compared to minus €44.8 million last year as a result of higher profitability and good working capital management with a number of days of revenue outstanding of 87. Net debt amounted to €316.5 million compared to €292.7 million at year-end.
Fugro said it is reviewing the possibility to extend its debt maturity profile, but it is currently uncertain whether it will proceed and, if so, when this might happen.
“We experience high client demand for our solutions for the energy transition, climate change adaptation and sustainable infrastructure. As energy security is now firmly on the agenda, traditional energy activities are also growing stronger than anticipated,” said Mark Heine, Fugro’s CEO.
“As communicated earlier, we are suspending our limited operations in Russia as a consequence of the tragic war in Ukraine. The war particularly affects our marine crew from Ukraine and Russia. We have immediately set up teams tasked with providing tangible support for our Ukrainian colleagues and their families. I am very impressed by how everyone involved has been handling this extremely difficult situation and in the meantime, we secured sufficient staff to ensure ongoing operation of our vessels.”
In Q1 2022, Fugro secured contracts for several site investigations for offshore wind developments in Europe, including a geophysical survey at the IJmuiden Ver V and VI sites, Dogger Bank South for RWE Renewables UK, and Morgan and Mona in the Irish sea for BP.
In the Americas, the company won multiple wind site investigation programs, positioning and metocean services related to the installation of a floating production system for a major energy company in the Gulf of Mexico, as well as two export cable route site studies for a wind farm offshore Maryland.
The Dutch firm is also in charge of delivering a cable route survey for Jan de Nul on the Lightning offshore power project in the United Arab Emirates.
For 2022, Fugro expects an increase in revenue in all markets and is focused on further margin expansion towards its 2023-2024 mid-term targets of an EBIT margin of 8-12% and a free cash flow of 4-7%, on the back of higher pricing, increasing asset utilization, disciplined cost management, and operational excellence and digital transformation.
To support the anticipated growth, the 2022 CAPEX is estimated at around €100 million.