UPDATE: Fugro Keeps Profit Outlook, But Sees Lower Revenue
November 19 2009 - 7:32AM
Dow Jones News
Oil services company Fugro NV (FUR.AE) Thursday stuck to its
full-year profit outlook, but said revenue will be lower than it
previously forecast, partly due to price pressure as the market for
oil and gas exploration activities is facing overcapacity.
Fugro said it expects full-year net profit to be around EUR260
million, down from EUR283.4 million in 2008. The company forecasts
full-year revenue of around EUR2.05 billion, down from EUR2.15
billion in 2008. Previously, Fugro forecast a revenue figure of
around the same level as last year.
The Dutch company, which, among other things, provides seismic
data analysis to the offshore oil industry, said full-year revenue
will be lower due to pricing pressure in its exploration activities
for the oil, gas and mining industries. Furthermore, the top-line
figure was impacted by the termination of the charter of two
seismic vessels, it said.
Fugro's statement echoes comments from Norway-based peer
Petroleum Geo-Services (PGS.OS), which last month also gave a
rather cautious market outlook.
The seismic industry is hurt by overcapacity as many oil and gas
companies have slashed investments in exploration activities in the
wake of lower energy prices.
In August, Fugro, which generates around 75% of its revenue from
the oil and gas sector, said that the higher oil price has not yet
resulted in a resumption of postponed exploration and future
production projects.
Still, the company said Thursday that tender activity for new
projects is picking up and that big oil and gas companies continue
to invest in long-term development projects.
KCB Securities analyst Lucie Vermaut said this could help the
company to offset pricing pressure, but only "to a certain extent."
Vermaut has an accumulate rating on the stock.
Meanwhile, SNS Securities analyst Danny van Doesburg was
positively surprised that Fugro managed to keep its profit outlook
despite a lower top-line guidance. "Fugro's trading update
underlines the flexible cost structure of the company." Van
Doesburg kept his hold rating on the stock, partly due to an
improved outlook for the oil services industry in 2010.
Still, at 1122 GMT, Fugro shares traded 2.3% lower at EUR39.09,
underperforming a 0.6% drop in the AEX market in Amsterdam.
Company Web site: www.fugro.com
-By Maarten van Tartwijk; Dow Jones Newswires; +31-5715-200;
maarten.vantartwijk@dowjones.ciom