Fugro, a leading player in the maritime and offshore wind sectors, is grappling with a shifting landscape. Geopolitical and economic uncertainties are reshaping client investment behavior worldwide, compounding challenges from the US market, particularly in offshore wind. This environment is set to impact Fugro’s revenue and earnings before interest and taxes (EBIT) for the first quarter of 2025, following a robust start in 2024. Despite these headwinds, the company is implementing measures to safeguard profitability, aiming to stay within its mid-term EBIT margin target range of 11-15% for the full year.
The US political landscape has hit pause on new offshore wind projects, a sector where Fugro has been actively involved. This pause, coupled with a volatile market environment, is affecting Fugro’s operations globally. Project scopes are being reduced, and award decisions are taking longer, exacerbating the typically slow start to the year.
Revenue for the quarter is expected to decline by approximately 11% compared to the first quarter of 2024, which saw revenues of EUR 503 million. EBIT is expected to be slightly positive, down from EUR 44 million in the same period last year. Free cash flow is anticipated to be around negative EUR 85 million, including scheduled capital expenditures of approximately EUR 100 million. This expenditure is largely related to the final phase of Fugro’s geotechnical fleet expansion program and vessel conversions. Despite these challenges, working capital performance remains solid at around 8% of 12-months revenue.
Fugro is not sitting idle. The company is taking swift action to drive efficiency and profitability. In the Americas, Fugro has made steady progress in realigning its operations. Targeted cost reductions are being implemented in other regions by reallocating assets towards new market opportunities, reducing personnel and leased assets, and enforcing strict cost controls.
Mark Heine, CEO of Fugro, commented, “In recent years, we have transformed into a resilient and well-diversified business with a strong balance sheet. This enables us to act quickly and effectively in these times of uncertainty, supporting the generation of solid results through the cycle. Our immediate priority is to implement cost-saving measures that safeguard profitability and cash flow, without losing momentum on our long-term strategy Towards Full Potential.”
The 12-month backlog is expected to decline modestly by 3 to 4% compared to March 2024, reflecting current market dynamics. Although Fugro’s business operations are not directly impacted by US trade tariffs, related developments are leading to increased market uncertainty.
Fugro remains committed to executing its strategy Towards Full Potential. The fundamentals in its core market segments remain strong, and the company continues to see growing opportunities in emerging areas such as critical minerals and surveillance of critical underwater infrastructure. These are areas where Fugro is well-positioned to lead, despite the current headwinds.
On 24 April 2025, Fugro will publish its Q1 2025 trading update.
