Royal Boskalis Westminster N.V. described Fugro today as an “interesting” company today after buying a 14.8 percent stake in the global geotechnical and subsea services provider.
For Boskalis, the similarities lie within the common areas of assets, knowledge, capital intensity, global coverage and client base, however Boskalis CEO Peter Berdowski notes his company has no intentions of making an offer.
In recent press statements both companies draw attention to the challenging market conditions, however Boskalis is also coming off of record profit earnings in the first half of 2014. Since mid-summer however, oil prices have plummeted well over 20 percent.
Fugro CEO Paul van Riel noted in his company’s 3rd quarter earnings report, “This quarter we have been faced by a rapid deterioration of our oil and gas markets resulting in project delays, postponements and cancellations, as IOCs and large independents continue to cut back on investments, exacerbated by the significant drop in oil price. The poor results and the further weakening of the market outlook are triggering additional impairments.”
With the changing market conditions, Fugro has updated their company strategy to focus on “Building on Strength.” This new mantra is aimed at improving profitability, return on capital and cash flow generation, while protecting their leadership position in various sectors, particularly within their Geotechnical and Survey divisions.
“For the Subsea division, Fugro will consider strategic partnerships to build a global IRRM market leader. For Seabed Geosolutions, strategic alternatives are being reviewed in parallel to the implementation of the turn-around program,” according to a statement by Fugro.