This article first appeared on GuruFocus .
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Revenue Growth (Q2):10% to 11% growth in the second quarter.
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EBIT Margin (H1):4.1% higher than last year.
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EBIT Margin (Q2):7.9%, an improvement from 4.3% in the prior year.
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Revenue by Segment (H1):Oil and gas grew 22% to EUR 424 million; offshore wind declined 24% to EUR 213 million; total revenue grew 4%.
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Marine Revenue Growth:Grew by 4.2%.
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Land Revenue Growth:Grew close to 5% on a currency comparable basis.
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Net Result:Negative EUR 62 million, including discontinued operations.
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Specific Items:Impairments of EUR 36 million, a EUR 9 million bad debt provision in Asia Pacific, and EUR 2 million in restructuring expenses.
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Income Tax Expense:EUR 7 million current tax expense, with EUR 41 million related to derecognition of deferred tax assets.
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Operating Cash Flow (before working capital):EUR 85 million, up from EUR 58 million.
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Working Capital:EUR 310 million in June 2026, an increase of EUR 46 million year-over-year.
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Capital Expenditure:EUR 81 million for H1, a decrease of EUR 87 million from EUR 168 million last year.
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Free Cash Flow:Negative EUR 38 million for the first half.
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Net Debt:EUR 473 million at the end of June, up from EUR 383 million at year-end 2025.
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Net Leverage:1.7 times, down from 1.8 times the previous quarter.
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Days Revenue Outstanding:Improved to 78, down from 85 last year.
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Backlog:Total backlog dropped 13.9%, with offshore wind down 47% and oil and gas down 8%.
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Cost Savings:Targeting EUR 50 million in annualized savings.
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CapEx Guidance:Reduced to around EUR 150 million, from EUR 150-165 million.
Release Date: July 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Fugro NV ( FUGRF ) reported a 4.1% improvement in EBIT margin for the first half of 2026, with second-quarter revenue growth of 11% and an EBIT margin of 7.9%, up from 4.3% in the prior year.
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The company saw a 22% growth in its oil and gas business, driven by strong demand in regions like Asia Pacific, the Middle East, and the Americas, which helped offset weakness in offshore wind.
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Fugro NV ( FUGRF ) is making significant progress with its new Ground IQ technology, which has already secured 27 projects in the first half of 2026, up from 22 in all of 2025, offering faster, cheaper, and more comprehensive subsurface data.
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The company is actively managing its cost base through a EUR 50 million annualized savings program, including fleet rationalization, charter reductions, and vessel lay-ups, to align with current market conditions.
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Free cash flow improved significantly in the first half of 2026, with operating cash flow rising to EUR 85 million from EUR 58 million, and capital expenditure was reduced by EUR 87 million year-over-year.
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Fugro NV ( FUGRF ) is expanding into new growth markets, including critical minerals, coastal resilience, and security/surveillance, with new projects in Saudi Arabia and a strategic investment in Dutch data fusion company Detect.
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The company's asset integrity business is strengthening, particularly with the Petrobras contracts in Brazil now fully operational, providing steady income for the coming years.
Negative Points
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Fugro NV ( FUGRF ) withdrew its earlier margin improvement guidance for 2026 due to elevated uncertainty from the Middle East conflict and continued weakness in the offshore wind market, making the full-year outlook less optimistic.
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The company's offshore wind revenue dropped another 24% in the first half of 2026, following a 45% decline in 2025, and the backlog for wind projects fell a further 47%, indicating a deeper and longer downturn than previously expected.
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The Middle East conflict had a direct impact of EUR 50 million on the bottom line, primarily due to GPS jamming and spoofing in the UAE and Qatar, which limited operational days and increased fuel costs.
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Fugro NV ( FUGRF ) reported a net loss of EUR 62 million for the first half of 2026, driven by EUR 36 million in impairments on geophysical vessels and a EUR 41 million derecognition of deferred tax assets.
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The company's backlog declined by 13.9%, with half of the drop attributed to the completion of a large project in Indonesia and the other half to the continued decline in offshore wind, creating near-term revenue uncertainty.
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Net debt increased to EUR 473 million from EUR 383 million at year-end 2025, and net leverage rose to 1.7 times, above the company's self-imposed target of 1.5 times, despite a focus on cash generation.
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Fugro NV ( FUGRF ) faces intense pricing pressure in the market, with clients requesting multiple 'best and final offers' and competitors becoming more aggressive, which is squeezing margins and adding to operational uncertainty.
Q & A Highlights
Q: What is driving the change in the full-year 2026 outlook, and why is the previously expected margin improvement now considered unlikely? A: Mark Heine, CEO, explained that the change is driven by two main factors. First, the first half of 2026 underperformed internal expectations due to the 15 million impact from the Middle East conflict (GPS jamming/spoofing) and operational issues related to vessel relocations. Second, there is elevated uncertainty for the second half of the year. The backlog shows a further decline in offshore wind, and the shift towards shorter-cycle oil and gas work reduces near-term visibility. The company has withdrawn its earlier margin improvement guidance and is focusing on cost savings and cash generation.
Q: Can you elaborate on the offshore wind market decline and the outlook for recovery? A: The CEO stated that offshore wind revenue dropped another 24% in H1 2026, following a 45% decline in 2025, and the backlog is down a further 47%. The market is undergoing a "reset," particularly in Europe, as new contract structures (e.g., Contracts for Difference) are being developed. While there are positive signals with new license rounds in France, the Netherlands, and the UK, it will take 6-8 months after tenders are awarded before survey work begins. The company now expects the market to bottom out deeper and recover in the second half of 2027, later than previously anticipated.
Q: What specific actions is Fugro taking to address the current market conditions and achieve the 50 million in annualized savings? A: The CEO detailed a multi-pronged approach to right-size the cost base. This includes the permanent retirement of 2-3 older vessels, reducing charter vessels by three over time, relocating assets to drive utilization, and temporarily cold-laying up 1-2 owned vessels. Additionally, 5-7 vessels will be placed in winter layup. These actions are being implemented gradually over the coming months as projects conclude. The company is also reducing its 2026 CapEx guidance to the lower end of the 150-165 million range.
Q: How is the shift in the order book from offshore wind to oil and gas affecting operational planning and utilization? A: The CEO acknowledged that oil and gas projects are typically smaller and have a shorter planning horizon than offshore wind, creating more uncertainty in the backlog and making utilization optimization more challenging. However, the company is adapting by right-sizing its capacity to match the current market. The CEO emphasized that the actions taken to reduce capacity are also intended to help stabilize pricing in the market. He noted that while geotechnical platforms require longer mobilization commitments, the geophysical side can be more flexible with short-term charters.
Q: Can you provide more detail on the 36 million impairment and the 41 million deferred tax asset derecognition that impacted the net result? A: The CEO explained that the impairment is due to challenging market conditions in the geophysical business, leading to a downgrade in the value of four vessels. This is driven by pricing pressure and short-term market forecasts. The impairment also includes costs related to the problematic conversion of the geotechnical vessel 'Fugro Scout' and a 9 million write-down on a bad debt provision in Asia Pacific. The deferred tax asset derecognition is a non-cash item resulting from the same short-term negative forecast used in the impairment testing, affecting certain geographies.
Q: What is the current status of the US business, and are you still expecting profitability there for the full year? A: While declining to give specific regional guidance, the CEO expressed optimism about the Americas for H2 2026. This is driven by a solid land business pipeline (data centers, nuclear, LNG) and the asset integrity work for Petrobras in Brazil, which is now fully operational. The main risk remains in the Marine Site Characterization (MSC) work, which is significantly smaller and faces more competition and pricing pressure. The CEO noted that the risk of further decline in the US is lower given the reduced scale of that business.
Q: How is the new 'Ground IQ' technology performing, and what is its strategic importance? A: The CEO highlighted Ground IQ as a transformative technology for the land business, calling it the "iPhone of site characterization." It uses passive seismic sensors to create a near-100% 3D model of the subsurface, compared to less than 1% with traditional methods, and is faster and cheaper. The company completed 22 projects in 2025 and has already secured 27 in H1 2026. The CEO stated that this technology will fundamentally change the land business, allowing Fugro to re-enter commoditized markets with better margins and drive down ground risk for clients.
Q: Can you provide an update on the process to hire a new permanent CFO? A: The CEO confirmed that the recruitment process is progressing well, with the supervisory board actively involved and an executive search firm assisting. They are in discussions with good candidates. He emphasized that the pressure is off with the interim CFO, Kiersten Ouden, in place, who is getting a good handle on the business with the support of the existing team.
Q: What is the company's view on the oil and gas market outlook for 2027, given conflicting signals on supply and demand? A: The CEO acknowledged the "crystal ball" nature of the question, noting the conflicting messages of high oil prices and potential oversupply. However, he observed that oil and gas companies are taking advantage of the current environment to progress with field developments in regions like Africa and South America. He believes energy requirements will remain enormous, driven by AI and data centers, and that gas will be needed for a long time. While oil prices could come down, the underlying demand for survey and geotechnical work in the sector appears to be growing.
Q: How is Fugro's positioning and GNSS (Global Navigation Satellite Systems) business being affected by the jamming and spoofing in the Middle East? A: The CEO explained that the positioning service business is protected differently in contracts, but it is still affected by jamming and spoofing. Fugro is a world leader in offshore positioning and has developed services to detect spoofing by using multiple satellite systems (GPS, GLONASS, Galileo, Beidou). While they can mitigate some issues with new antenna setups and equipment, jamming remains difficult to fully overcome, and it is a growing global issue, not just in the Middle East but also
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
