Fugro's Revenues Dive, Sending Shares Lower
Dutch deep-sea energy prospector Fugro reported a steeper than expected drop in third-quarter revenue on Monday and said it expects negative cash flow for the full year, sending its shares down more than 10 percent.
Fugro is still suffering the impact of a rout in oil prices that have fallen by more than 50 percent from mid-2014 highs, affecting its business as makes it uneconomic to prospect for the hard-to-reach subsea deposits in which it specialises.
The company reported a 19.5 percent drop in third-quarter revenue to 364.0 million euros ($422.71 million).
It said it expects cash flow from operating activities after investments to be negative for the full year, due to the later than expected start of one of its projects.
In August the company, which reported a 14.5 percent decrease in first-half revenue, said it expected the decrease in revenue for the full year to be less severe than in the first half and that it expected positive cash flow from operating activities after investments for the full year.
"This quarter, results were unfortunately impacted by technical downtime of some vessels and hurricanes," Chief Executive Paul van Riel said in a statement.
The lower revenue had a negative impact on EBIT of around 10 million euros, the company said.
Fugro, which recently appointed the former head of Swedish energy company Vattenfall, Oystein Loseth, to replace van Riel in 2018, said the overall backlog for the next 12 months, excluding the non-core marine construction and installation business, decreased by 5.6 percent on a currency comparable basis to 867.2 million euros.
The company also announced the launch of a 100-million-euro subordinated convertible bond, the proceeds of which will be used to repay its debt.
Reporting by Alan Charlish
