Monday 10 November 2014

Fugro operating report Q3 2014

Fugro, OP, Q3, 2014, front page

Due to this operating report the share price dropped like a stone and Fugro was even below 10 € per share for a day or so. I am very annoyed that I did not manage to increase my position then... what was then in this report from the underworld?

The biggest chock for the market was in my opinion that they expect not to pay a dividend for 2014. This made the share price drop one level further down.

If we look at the revenues for the quarter then they are still pretty ok for most of the divisions. Sure Survey went down and the multi-client part of Geoscience but overall the revenue increased. Besides form the dividend cut they also brought up one-time costs that will appear during this year but the size of those costs I did not see written out.

Fugro, Q3, 2014, quarter revenue

If we look at the running year then also that is looking ok. Geotech and Gescie have done well. Subsea have done a little bad but have hopefully turned it, at least based on what Q3 looked like. The Survey segment has done bad and by the look of it, it has even gone in the wrong direction and become worse. Still for the total group the revenue increased during the running nine months.

Fugro, Q3, 2014, YTD revenue

Conclusion: Sure, I am also annoyed of not getting any dividend for 2014 but that is how life is and I will not walk out on an investment due to them cutting dividends. I doubt the future will be as dark as this Q3 operating report turned out in writing. Some days ago Statoil went out and said that they were planning to invest around 20 billion € to build out their oil and gas fields. The Norwegians are clever, when the prices are low that is when one should expand for the future. If the prices are high then it is already too late to make new investments since new oil wells do not magically appear and deliver barrel after barrel of oil. It takes years. I will keep my shares and will even expand my holding.

To find out more about Fugro please see analysis of Fugro.

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