Fugro Cuts More Jobs, Shifts Focus to Different Business Segments

(Credit: Fugro)

Dutch geological data specialist Fugro it would cut more jobs and shift focus to different business segments after confirming a drop in first-quarter revenue on Thursday, hit by a pause in new U.S. offshore wind projects.

The company also cited a highly volatile global market environment.

Sales fell 11.1% to 450 million euros ($510.12 million) year-on-year in the first quarter, in line with a earnings warning it issued earlier this month.

"We expect ongoing impacts of these market uncertainties into the second quarter. Our immediate priority is the continued implementation of measures to safeguard profitability and cash flow," group CEO Mark Heine said in a statement.

Fugro, which provides geotechnical, survey, subsea and geosciences services, reported first-quarter earnings growth of 0.2% before interest, taxes (EBIT) margin, while analysts had expected 5.8%, according to a company-compiled consensus prior to the profit warning.

The group, however, maintained its annual EBIT margin target of 11% to 15%, as it cuts costs and redeploys capacity in other regions, such as South America or the Middle East, and business segments.

It notably plans to expand in the critical minerals market and to remain active in the U.S. in other sectors such as oil and gas or data centre development, group CEO Mark Heine said in a call with journalists.

Fugro said earlier this month it started reducing its U.S. workforce and scaling back operations there after warning its sales and earnings would miss earlier forecasts because of volatile markets and a lack of new U.S offshore wind projects.

Further layoffs are expected in the U.S., where it employs more than 2000 people, and the Middle East, Heine said.

Fugro is 'not counting on any work (in U.S. offshore wind) this year,' Heine said, adding that the segment represents around 7% of total revenue.

($1 = 0.8821 euros)

(Reuters - Reporting by Alban Kacher; Editing by Christopher Cushing, Eileen Soreng and Kim Coghill)