Fugro, a global leader in geotechnical and geospatial survey solutions, has unveiled impressive financial results for the third quarter of 2023. The company reported a striking 86% increase in earnings before interest and tax (EBIT), surpassing €97 million in contrast to the €52 million recorded during the same period in 2022.
The standout growth in the third quarter was underpinned by a robust 32.6% surge in revenue, primarily attributed to Fugro's successful capture of high client demand. This heightened demand was particularly pronounced in the energy sector, with a substantial emphasis on renewables and oil & gas, as outlined in the company's statement.
Fugro's expansive global operations also displayed improved margins across all regions, a result of increased revenue complemented by operational efficiencies. Notably, the marine site characterisation division showcased an “outstanding performance,” leading to an EBIT margin of 16%, a significant increase from the 10.9% reported in the third quarter of the previous year and the 11.8% in the second quarter of the current year.
Fugro's strong performance is further underscored by a robust 12-month backlog, which has expanded by 14.5%. All business lines are reporting a greater backlog, affirming the company's promising trajectory.
Looking ahead, Fugro is poised for ongoing growth in the energy markets, with renewables expected to be a key driver of strong revenue expansion for the full year. The company remains confident that the EBIT margin and return on capital employed will align with the mid-term target range of 8%-12% and 10%-15%, respectively. Furthermore, they anticipate positive free cash flow.
In the coming fourth quarter, Fugro will execute the unwinding of the sale and leaseback arrangement for the Fugro Scout and Fugro Voyager vessels. Opting for early delivery of the vessels instead of extending the financing arrangement will result in a reduction of gross debt and financing costs.
Fugro's CEO, Mark Heine, reflected on the positive results, stating, “We again realized substantially higher revenue in renewables, to one third of group revenue year-to-date. Despite recent news flow around delays in several offshore wind projects, we anticipate continued growth going forward, supported by the recent launch of the ‘Wind Power Package' in the EU.”