Fugro cuts workforce, shifts business mix as renewables reality bites

Dutch geological data specialist Fugro said 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 US offshore wind projects.

The company also cited a highly volatile global market environment.

Sales fell 11.1 per cent to 450 million euros ($510 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 per cent before interest, taxes (EBIT) margin, while analysts had expected 5.8 per cent, according to a company-compiled consensus prior to the profit warning.

The group, however, maintained its annual EBIT margin target of 11 per cent to 15 per cent, 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 US 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 US 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 US offshore wind projects.

Further layoffs are expected in the US, where it employs more than 2,000 people, and the Middle East, Heine said.

Fugro is, "not counting on any work (in US offshore wind) this year," Heine said, adding that the segment represents around seven per cent of total revenue.

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