Positive Developments Fugro in Line with Expectations

Fugro N.V. develops in line with expectations over the second half year of 2004 despite the recent decline of the US-dollar and the ongoing delay in the pick-up of investments of oil companies.

As mentioned at the publication of the half-yearly figures, Fugro's turnover in 2004 will be approximately EUR 1 billion. The net result before amortisation of goodwill will considerably exceed the result for 2003 (EUR 45 million) and will amount to approximately EUR 65 million. If the market continues to develop positively and the US-dollar is not subject to a sudden and rapid decline and barring any unforeseen circumstances, the 7.5%-8% mid-term target for net margin before amortization of goodwill could be reached in 2005.

In addition to reporting in accordance with Dutch GAAP, Fugro intends to also report about the influence of the implementation of IFRS rules, qualitatively as well as quantitatively, for the year 2004.

As previously indicated, the main differences in results and shareholders' equity are expected to relate to the reporting of immaterial fixed assets (mainly goodwill), pensions as related to 'defined benefit' schemes, taxes and options. The influence on the reporting of financial instruments is expected to be limited, also due to the pursued policy to manage fluctuations in currency exchange rates.

When reported according to IFRS, the 2003 result is expected to be significantly lower than reported in the annual accounts of 2003 in accordance with Dutch GAAP. The main negative adjustment will be the reporting of reorganisation costs related to the acquisition of Thales GeoSolutions, IFRS only allows for a provision to be charged against the result at the moment of the acquisition. These costs cannot be capitalised as part of the goodwill.

The effects of the transition to IFRS will not impact the strategy, operational business and cash flow of Fugro and will have no material impact on the historic picture of Fugro.

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