Brunel, the Netherlands-based global energy staffing firm reported revenue grew by 15% in constant currency to €258.1 million in the second quarter of 2019 compared to the prior-year quarter. Revenue increased by 17% in reported rates.

The group said EBIT was impacted by a one-off loss on contract in its Americas region.

Jilko Andringa, CEO of Brunel International, commented, “We continued to outperform in key markets like Germany and Middle East & India. However, we also incurred a one-off loss in the USA.”

“In line with our entrepreneurial spirit, we started an entity to build up new project capabilities in Texas,” Andringa said. “With this new entity, we won many new projects. One of the initial projects did not go as planned and resulted in a loss. As painful as this is, we used the learnings of this project to improve our team, processes and controls. Supported by the improved settings, this new activity delivers profitable revenue growth.”

Revenue by Geography

 “In the DACH region, we continued to grow, while we experienced some impact from the weakness in the Automotive Industry. This has not reduced headcount and productivity, as we continued to focus on other growth markets, in line with our strategy of diversification,” Andringa said.

In the DACH region, the company said it expects limited growth in the remainder of the year, with increased profitability.

In the Netherlands, the group said its revenue decline was caused by clients actively taking over the company’s professionals, in combination with challenges to recruit new professionals due to the scarcity in the labour market.

Brunel said cost savings in the Netherlands will result in an improved EBIT, despite a decline in revenue.

In Australasia, which includes Australia and Papua New Guinea, the region managed to achieve limited growth, even despite a challenging and competitive environment in the mining sector. The growth is mainly driven by the group’s traditional services in the Oil & Gas sector.

Within the Middle East & India, the group reported a very strong quarter in Kuwait, Qatar and India.

“We continue to see a strong pipeline of work and we expanded by opening new offices in India, and setting up businesses in Oman and Abu Dhabi,” Brunel stated.

Rest of World includes Americas, Russia, Belgium and Asia. In the Americas, the group encountered a one-off loss on a project for a water treatment plant in Texas.

“In June 2019, at 55% completion, our new experienced Brunel Industry Services leader and his team had to determine that the project had not advanced as expected. A re-estimate resulted in a €5.5 million loss for the total project until completion which is scheduled in Q1 2020. The loss is recognised in the Q2 results.

“We have replaced the general manager of Brunel Industry Services, strengthened the organisation, improved processes and procedures, and reduced our risk-appetite in the acceptance of new projects to prevent this type of incidents to occur in the future. Brunel does not have any similar type of contracts anywhere in the world,” the company stated.

Brunel also published H1 2019 results. Revenue was up 20% in reported rates and 18% in constant currency.

Looking ahead, for the full year 2019 Brunel expects revenue between €1.02 billion and 1.07 billion and normalised EBIT between €43.5 million and €48.5 million. Including the one-off loss of €5.5 million. Brunel expects the full year EBIT to end up between €38 million and €43 million.

As of last trade, Brunel International traded at €11.12, down 17.51% on the day and 10.87% above the 52-week low of €10.03 set on 18 December 2018. Based on its current share price the company has a market value of 681.75 million.