Dutch geological data specialist Fugro is shifting away from offshore wind toward oil and gas projects, as deteriorating market conditions cloud the outlook for its renewables business.
The company’s offshore wind revenue dropped by €100 million in the third quarter compared to the same period last year, bringing the year-to-date decline to approximately €250 million.
In response, it is shifting away from renewables, with oil and gas projects representing an increasing part of its order backlog.
"We do not expect wind to disappear totally because this market will continue. Obviously, not necessarily in the United States, so to say, but in the other areas of the world, it will probably take another year at least to stabilise and to return," Heine said.
Third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 22 per cent year-on-year to €108.6 million ($126.7 million), but came in above the €89 million estimate in a company-compiled consensus.
"However, the broader environment remains challenging, and we are also expecting a difficult winter season," chief executive Mark Heine said in a media call.
Heine noted that the offshore wind sector continues to face high interest rates, rising construction costs, limited grid capacity, and shifting political landscapes.
Oil and gas project startups have also temporarily slowed, reflecting cautious spending by energy companies, particularly affecting the fourth quarter of the year, he added.
Fugro, which provides geotechnical, survey, subsea and geosciences services, said its cost cutting programme was progressing "well".
Last month the group withdrew its already downgraded annual guidance and said that it would cut an additional 300 jobs, on top of the 750 it had announced earlier.
Fugro is closely monitoring its asset base and may consider scaling down operations if needed, including retiring older equipment or releasing leased assets, Heine said.
He reiterated that Fugro would "significantly" reduce its investments next year, but added that it was too early to provide an outlook for 2026.
(Reporting by Alban Kacher; Editing by Matt Scuffham)
