Dutch geotechnical survey firm Fugro has announced a set of 'painful measures' including workforce cuts, and a hiring and salary freeze, as the company expects the COVID-19 pandemic and low oil prices to negatively impact its business.
"The company is implementing a program to significantly reduce costs and capital expenditure, with the aim of realizing cash savings," Fugro said.
"This includes minimizing the hire of short-term charters, implementing a hiring and salary freeze and measures to reduce our workforce. These are painful measures that are necessary as a result of the dual impact of the COVID-19 pandemic and the low oil price environment," Fugro said without providing details on how many workers will be affected.
Fugro said that, due to the COVID-19 situation, some projects cannot be executed as originally planned due to increasing travel restrictions and country lockdowns, which are impacting the business, particularly in the Europe-Africa region.
"The impact of the virus is compounded by oil and gas companies’ recently announced spending cuts due to the sharp decline in the oil price. At the same time, offshore wind is anticipated to show continued growth, though somewhat less than assumed at the start of this year," Fugro said.
At this stage, Fugro said, it is impossible to forecast the magnitude and duration of the impact of the virus and oil price development given the limited visibility on how this global crisis will unfold.
Fugro said its current liquidity is good with over EUR 400 million available in cash and committed facilities.
Mark Heine, CEO, said: "Although our backlog is still solid, our business operations will be impacted, especially given the combination of the pandemic with the recent sharp decline in the oil price. We are continuously analyzing scenarios and are implementing mitigating measures."