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Investig.com -- Fugro (AS:FUGR) shares tumbled more than 11% Friday after the company reported a sharp miss in first-half earnings, driven by a steep decline in offshore wind revenue and project delays in key markets.
The Dutch geo-data firm said adjusted EBIT fell 86% year over year to €20.5 million for the first half of 2025, well below the consensus estimate of €61 million.
Revenue dropped 17% to €904.7 million, missing expectations of €984 million. The EBITA margin fell to 2.3%, down 11 percentage points from the prior year and below the consensus forecast of 6.2%.
Fugro attributed the performance to a 36% decline in offshore wind revenue, particularly in the United States and Europe.
The company cited reduced project scope, delayed awards and increased geopolitical and economic uncertainty. More vessels were also out of service for maintenance.
The offshore wind business in the Americas accounted for about 8% of group revenue in 2024.
Fugro said demand in the U.S. has been hurt by a government review of 28 offshore wind projects with a combined 47 GW capacity, or about 75% of total U.S. offshore wind development.
In response, the company is reallocating capacity to other regions and sectors, including oil and gas, LNG, carbon capture storage and infrastructure in Brazil, Colombia, the U.S. and Southeast Asia.
Despite the weak first half, Fugro expects second-half revenue to rise 20%, supported by a strong order backlog and recent contract wins.
These include four contracts with Petrobras worth $340 million and a gas development project in Southeast Asia.
Fugro now expects a full-year EBIT margin between 8% and 11%, revised down from a prior range of 11% to 15%.
“We anticipate mid-single-digit FY25E consensus EBIT downgrades, based on the midpoint of the new margin range,” said analysts at Jefferies in a note.
The margin outlook includes cost savings of €80 million to €100 million from a headcount reduction of about 750 and fewer short-term vessel charters. The savings are expected to add about 4 percentage points to margins.