The past year was quite turbulent. The final figures are not
yet known but Fugro confirms that the earlier forecast of
more than EUR 260 million net profit and about EUR 2.5
billion turnover will be achieved. About EUR 6 million from
the EMGS shareholding comes on top of the aforementioned
profit. The turnover increase of about 10% compared to 2010
comes from the growth in the Survey and Geoscience divisions.
The turnover in Geotechnics will be about equal to 2010. This
was reported by Mr. Wester, President, in his New Year's
speech to the Fugro employees today.
If we look at what happened in the world in 2011, a few
things stand out.
-
the Arab spring: within one year a complete turnaround in
the political power structures in Tunisia, Egypt and Libya.
Such political unrest leads to postponement of projects in
the countries concerned.
-
the earthquake in Japan with a devastating tsunami. Besides
many casualties and great damage it has led to a global
reflection on the use of nuclear energy and changes in the
related policies, as in Germany.
-
increase in piracy in areas where our vessels are
operating.
-
the ongoing effects of the global financial crisis that
started in 2008. It looks as if the measures that
governments took, have had little effect and are now
starting to boomerang, especially in the United States and
Europe, which are facing huge deficits in public budgets.
This led to fierce discussions about public funding in the
United States and particularly in Europe, about the aid to
Greece and the implications for the Euro.
The result is that the expected global economic recovery in
early 2011 has not materialised. This has also affected our
activities, though more indirectly. A significant difference
for Fugro compared to the situation in 2008 is the fact that
the oil price has remained relatively stable at around USD
90-100 per barrel (WTI) and has not dropped to USD 30-40 as
at the end of 2008, with the result that investments in the
oil and gas sector continued over the past year and even
increased significantly.
For many years our strategy has been aiming to provide a good
geographic spread of operations and a wide range of services
to various clients. This is helping us under the present
circumstances. Most of the activities depending on government
spending such as infrastructure, construction, aerial mapping
etc. are under pressure in the Old Economies, but are
compensated by growth in upcoming regions such as Brazil,
China (Hong Kong) and West Australia. New Economies
exhibiting strong growth, like China and India, are holding
up the demand for energy. This is reflected in the demand for
oil and gas, but also in the growing demand for renewable
energy such as offshore wind farms, in which we are
involved.
In the previous year, these factors resulted in the following
for Fugro:
After a difficult start for the Geotechnical division,
especially for the offshore group, the rest of the year went
well both for onshore and offshore activities.
The Survey division had again a strong year in traditional
offshore survey work and during the year, the offshore
construction related services recovered somewhat. A major
part of government related geospatial work is under pressure,
but on balance it made a positive contribution.
In the Geoscience division, the Information Services business
line did very well. The same goes for General Geophysical
Surveys which showed a strong recovery after the difficult
past few years. Most of the turnover of the division comes
from marine seismic surveys. The course of events here, has
been twofold. Continuous price pressure in the so-called
contract work caused by the oversupply of vessels and also
because the demand for seismic work in the Gulf of Mexico did
not recover after the Macondo spill in 2010. In contrast,
like last year, the so-called multi-client activities showed
a strong performance. Also processing activities delivered a
strong increase in profit and turnover.
In the past year, we have managed to keep broadening our base
and securing the financial solidity of the company for the
long term. The latter is thanks to the so-called private
placement of more than USD 900 million. The loans have a
maturity of 7-12 years. As well, the bank facilities of
approximately EUR 775 million were extended for the next five
years.
Despite difficult circumstances, organic growth in sales has
occurred in 2011 and together with revenue from some major
acquisitions, this forms a solid basis for the coming years.
With respect to acquisitions, 2011 was a record year, with a
total amount of about EUR 245 million. The larger
acquisitions of TSMarine in the Survey Division and of De
Regt Marine Cables, and at the end of the year of OBN (Ocean
Bottom Nodes seismic exploration) in the Geoscience Division,
resulted in a further expansion of our services. There was
also room for further investments in expansion and renewal of
our vessel fleet. Orders were placed for three (smaller)
survey vessels, for, amongst other applications, work on
offshore wind farms and for an ROV support vessel that will
be built in Brazil to fulfil the increasing demand for 'local
content' in this country.
We can conclude that the past year was not easy in a number
of sectors and countries where we operate, but we still
managed to lay the basis for further growth, including
broadening our commercial offering.
Fugro celebrates its 50th anniversary this year and we will
pay due attention, said Mr. Wester.
The new organisation structure with a Board of Management has
been implemented.
Mr. Steenbakker, the chairman of the new board as of 1
January continued explaining the prospects.
Given what we know today, 2012 will continue to be an
uncertain year with respect to the recovery of the world
economy, the financial sector and the refinancing of
government debt. Cost control and the efficient execution of
projects remains a priority for Fugro.
With the recently issued permits for the Gulf of Mexico and
increasing activity in the North Sea, a re balancing of the
global seismic fleet capacity is expected in the course of
2012, which may lead to better utilisation and possibly
create room for price recovery in this sector.
In general the outlook for the oil and gas industry continues
to be positive which is supported by a relatively stable oil
price of around USD 100 per barrel. This price level is
generally considered well above the threshold required to
continue investing in the development of new fields,
including in deep water.
With growing energy demand, mainly coming from emerging
economies, and increasing depletion rates of existing fields,
the industry is estimating 2012 investments of close to USD
600 billion for the development of new oil and gas fields.
This is an increase of 10% relative to the actual 2011
investments. Investments in renewable energy (predominantly
offshore wind farms) will continue to grow mainly driven by
Europe, with Asia and the United States following. Fugro is
in a good position to benefit from these investments.
This is supported by a number of recent awards for Fugro,
like:
-
the AUD 100 million subsea installation contract from
Woodside Energy Limited
-
a number of long term contracts with a total value of
around USD 75 million for the provision of ROV and air
diving services for Petrobras in Brazil
-
Fugro has also been awarded a three-year survey and
positioning contract from Oceaneering to support
Oceaneering's contract with BP Angola. Fugro will perform
all surface and subsea positioning tasks, including
inspection surveys on board of two ROV vessels.
The activities related to the minerals market have shown
growth in 2011 and it is expected that this will continue in
2012 as a result of demand for natural resources for energy,
construction and manufacturing. However, this market may be
more vulnerable as a result of potential economic stagnation.
The market for infrastructure is amongst other things,
dependent on government policies to implement budget cuts
versus investing in employment, said Mr. Steenbakker.
Cautionary Statement regarding Forward-Looking
Statements
This announcement may contain forward-looking statements.
Forward-looking statements are statements that are not
historical facts, including (but not limited to) statements
expressing or implying Fugro N.V.'s beliefs,
expectations, intentions, forecasts, estimates or predictions
(and the assumptions underlying them).
Forward-looking statements necessarily involve risks and
uncertainties. The actual future results and situations may
therefore differ materially from those expressed or implied
in any forward-looking statements. Such differences may be
caused by various factors (including, but not limited to,
developments in the oil and gas industry and related markets,
currency risks and unexpected operational setbacks).
Any forward-looking statements contained in this
announcement are based on information currently available to
Fugro N.V.'s management. Fugro N.V. assumes no obligation
to in each case make a public announcement if there are
changes in that information or if there are otherwise changes
or developments in respect of the forward-looking statements
in this announcement.
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