Fugro to focus on geotechnical and survey activity - examining options for subsea businessCompany News // March 4, 2015
Fugro says it plans to focus on its core geotechnical and survey activities in future. It says the restructuring of seabed geosolutions in progress and Fugro is actively seeking options to reduce its stake.
The company said the process is underway to find a partner to create a strong subsea services player. Options include a divestment of (part of) the subsea business.
The company's results in 2014 were poor due to the strong deterioration of the oil and gas market and performance issues.
Due to the poor results and the need to strengthen its balance sheet, Fugro will not pay a dividend for the year 2014.
The company's CEO Paul van Riel, said the company was presenting "important portfolio changes, as part of the updated strategy 'Building on strength'" which was first presented in October.
"Clearly, the way forward for Fugro is to fully focus on its survey and geotechnical activities," he said. "We have been able to build our global market leading geotechnical and survey divisions into pillars of strength on the foundation of being an independent service provider. We will continue to build Fugro on the strength of these activities.
"We are actively seeking options to reduce our share in seabed geosolutions and the process is underway to find a partner for subsea services; options include a divestment of (part of) the subsea business.
"To address the current challenging environment, we initiated a series of measures throughout the company, starting in the second quarter of 2014 to restore margins, improve cash flow and return on capital employed. These have been expedited and are on track. Our second half year results in our geotechnical, survey and subsea services divisions were satisfactory considering the market circumstances.
"We anticipate a weak oil and gas market for some time to come, while the infrastructure and windfarm markets continue to provide good opportunities.
"Our plan for 2015 is clear: focus on profitability, cashflow and strengthening the balance sheet by implementing restructuring measures. Strategically, our main objective is to implement the announced portfolio changes to strengthen the company, simplify and reduce the cost of the organisation and improve operational performance. This will position the company well to benefit from recovery in the oil and gas market when the demand-supply balance is restored."