Fugro has been awarded contracts in the offshore wind sector in South Korea and the U.S., according to the company’s results for the first quarter of 2021.
In South Korea, Fugro has won a contract for a site investigation programme for a floating offshore wind farm. The company did not disclose any further details about the project. The contract in the U.S. is for unexploded ordnance (UXO) investigation at Ørsted’s South Fork Wind Farm project site offshore Rhode Island.
The Netherlands-headquartered company entered the South Korean offshore wind market in 2019 after signing a Memorandum of Understanding (MoU) with Underwater Survey Technology 21 (UST21). Under the agreement, Fugro has expanded UST21’s local hydrography capacity to provide site characterisation services, including geotechnical, geophysical and offshore metocean solutions for the offshore wind market.
In the U.S., the company has already been working with Ørsted. Last year, Fugro begun a site characterisation programme at the Sunrise Wind offshore wind project off the coast of New York, one of three U.S. projects developed by Ørsted and Eversource Energy, the other two being South Fork Wind Farm and Revolution Wind.
Q1 results show COVID-19 impact, renewables to power revenue growth
For the Americas region, Fugro reported backlog increase due to increasing work in offshore wind on the East Coast of the U.S. and marine asset integrity activities in the country, as well as the ROV support vessel contract work in Brazil.
In the company’s global Marine business segment, backlog declined slightly as an increase in site characterisation caused by growth in offshore wind was offset by a decline in asset integrity, which is more exposed to the oil and gas market, according to the company.
Fugro reported a revenue decline of 17.2 per cent in the first quarter of this year, fully driven by the impact of the Covid-19 pandemic and a strong related decline in oil and gas activities, partly offset by revenue growth in other market segments.
“This quarter, our revenue was again strongly affected by the pandemic and the related decline in oil and gas activity levels. This is evident in comparison with the first quarter of 2020, when the initial Covid impact became visible only towards the end of the quarter” , said Mark Heine , CEO at Fugro. “At the same time, our results demonstrate once again our resilient operating model and increasingly diversified portfolio, with an increasing revenue share from renewables, infrastructure and nautical activities”.
Looking ahead, the company stated that offshore wind was anticipated to show continued growth in 2021. In the oil and gas market, there are early signs of a recovery, Fugro said, adding that this was to a certain extent dependent on the further development and impact of the pandemic on the society and economy. The company expects a return to revenue growth, in particular in renewables, in the course of the second quarter.
“We were able to slightly improve our margin in the seasonally weak first quarter. This was largely due to the comprehensive cost reduction programme which was initiated immediately after the outbreak of the pandemic and which is now fully effective” , Mark Heine said. “Based on the good order intake this quarter, we anticipate that revenue will start to grow again in the second quarter”.