The high demand for Fugro's services continues unabated, especially from the oil and gas sector and for large-scale infrastructure projects.
Exploration activities (marine seismic surveys) for the oil and gas industry show a strong increase as a result of the additional vessels taken into service during 2007, the utilization of which will also be high for the rest of the year. Multi-client data sales showed a sharp increase compared to the same period in 2007.
In line with the above trend, the order backlog is also higher than a year ago.
The intended expansion of the marine fleet by six vessels (two owned, the rest chartered) has now been arranged. It is expected that the two new vessels being built will experience a few weeks delay in delivery. The concurrent operational equipment expansion includes twenty ROVs (Remotely Operated Vehicles) and an AUV (Autonomous Underwater Vehicle).
Fugro's workforce has now increased to more than 12,400 employees.
All three divisions are expected to show an increase in revenue and result for the first half of 2008. Most of the revenue growth will be organic. The lower US Dollar and British Pound exchange rates will, at their current level, have a negative impact of approximately 7% on the revenue growth. This will largely be offset by a revenue increase of around 5% as a result of acquisitions completed during 2007 and 2008.
Barring unforeseen circumstances and a further decline of the US Dollar and British Pound, revenue for the company for the first half of the year is expected to increase by approximately 20% to around EUR 1 billion (first half of 2007: EUR 826.3 million) and net profit is also expected to increase by approximately 20% to over EUR 100 million (first half of 2007: EUR 85.9 million). This means that last year's strong increase in the first half year net profit margin to over 10% will be maintained (first half of 2007: 10.4%).
An amount of EUR 118,602,000 of the nominal EUR 125 million convertible bond loan issued in 2005 has now been converted for which 4,890,804 depository receipts of shares have been issued. As from 11 May 2008 Fugro is entitled, under certain conditions, to redeem (the remainder of the) convertible notes prior to the expiry date. Fugro intends to redeem the remaining portion of the bond and will shortly start the procedure for this.
As a result of the above mentioned issue of certificates of shares the total number of outstanding certificates of shares increased to 75,311,780 on 13 May 2008 of which 1,444,646 were held in treasury.
Fugro has acquired the remaining 38% interest in the Fugro-Oceansatpeg joint-venture in Brazil. This joint venture was established in 2005 to provide marine survey services in Brazil, primarily for the oil and gas industry. These activities will be continued under the name 'Fugro Brazil Ltda' from a new office near Rio de Janeiro. During the first quarter of 2008 Fugro-Oceansatpeg received new orders worth a total of around USD 30 million. These orders are for ROV services for several clients, including Petrobras, as well as for offshore surveys and diving activities related to production facilities in various locations including the Campos field.
Fugro has also reached agreement regarding the acquisition of In Situ Geotecnia Ltda. - a leading Brazilian company in the field of geotechnical services. In Situ operates throughout Brazil with offices in Curitiba and Sao Paulo and has an annual revenue of EUR 4 million and 100 employees. In Situ Geotecnia Ltda. will be part of the onshore geotechnical business line.
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