Fugro Third time not lucky - third profit warning in 12 months time

Following a profit warning last November and last April Fugro now issued a third one. This morning it updated its financial guidance for 2025, following significant changes in market conditions in recent weeks. While the company still expects 2H25 to show a notable improvement compared to the first half, the previously guided 20% revenue growth in 2H25 is deemed no longer realistic. A wide range of projects is said to have been affected – with most experiencing postponements into 2026 and some being descoped – resulting in an estimated revenue impact of around €100m. Management announced further cost cutting measures and will reduce the workforce by an additional 300 FTE as well as 2026 capex (unquantified) which earlier was said to be in the €200-250m range. While the OFW environment remains difficult Fugro saw most negative recent dynamics in the Oil&Gas market linked to lower commodity prices. It is abundantly clear that the diversification between the renewable & traditional energy market is currently not paying off. In spite of the additional cost and capex (as of 2026) cutting, this third warning in 12 months will further erode investor's trust in Fugro's guidance capabilities. In a first reaction and in spite of the announced cost & capex reduction measures and the deep discount valuation we downgrade to Hold (from accumulate) and keep our TP (was €14) under review.