Fugro lowers full-year core profit margin (updated)
01/08/2025 06:24
Adds shares in paragraph 2, mid-term guidance in paragraph 12, adds graphic By Anna Peverieri Aug 1 (Reuters) - Dutch geological data specialist Fugro FUGR.AS on Friday lowered its full-year margin for earnings before interest and taxes (EBIT) to 8%-11% from 11%-15% earlier from headwinds due to persistent macroeconomic uncertainties. The company's stock slid 13% at 0711 GMT and is down 25% so far this year. Its adjusted earnings before interest, taxes, depreciation and amortisation, or EBITDA, fell around 55% to 63.6 million euros ($72.6 million) in the second quarter ended June 30. Sales for the company, which provides geotechnical, survey, subsea and geosciences services, fell 22% to 454.8 million euros in the quarter. Market volatility and a lack of new U.S. offshore wind projects weighed on earnings, pushing the group to reduce its U.S. workforce and scale back operations. The uncertainties caused industry-wide project delays and scope reductions, especially in the offshore wind market, the group said, noting it does not expect new offshore wind energy projects under the current U.S. administration. U.S. President Donald Trump ordered a suspension of offshore wind leasing on his first day in office in January, calling wind power ugly and expensive. The second quarter was "very challenging and disappointing", coming in "further down than we initially expected", CEO Mark Heine said, and warned it would be "very difficult to catch up on what the group has lost in the first half". Fugro had reported a sales drop in the first quarter, confirming a profit warning it had issued. "First-half was marked by geopolitical and economic uncertainties, causing significant headwinds across our industry, resulting in clients reassessing their projects," Heine said. However, Fugro said it expects a "strong recovery" in the second-half, supported by the roll-out of its cost-saving programme and improved fleet utilisation. The company announced on Friday it launched a cost reduction programme aimed at generating annualised savings of between 80 million euros ($91.4 million) and 100 million euros. It reiterated its 2027 mid-term targets of 11-15% EBIT-margin and free cash flow and return on capital employed of at least 15%. However, it stated that the revenue outlook of 3 billion euros to 3.5 billion euros for the period is likely to be realised at a later stage. ($1 = 0.8758 euros) Dutch geological data specialist Fugro share performance https://reut.rs/46CUX1A (Reporting by Anna Peverieri; Editing by Mrigank Dhaniwala and Janane Venkatraman) ((Anna.Peverieri@thomsonreuters.com;))