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  • Boskalis Posts Record Net Profit of EUR 490 million

    Royal Boskalis Westminster N.V. (Boskalis) achieved net profit of EUR 490 million in 2014 (2013: EUR 366 million).

    Revenue rose by 1 per cent to EUR 3.2 billion (2013: EUR 3.1 billion).

    EBITDA rose by 25 per cent to EUR 946 million (2013: EUR 757 million) and the operating result (EBIT) was up 41 per cent at EUR 652 million (2013: EUR 463 million).

    HIGHLIGHTS OF 2014

    • Revenue: EUR 3.2 billion (+1%)
    • EBITDA: EUR 946 million (+25%)
    • Net profit: EUR 490 million (+34%)
    • Order book: stable at EUR 3.3 billion
    • Proposed dividend: EUR 1.60 per share (+29%)

    OUTLOOK FOR 2015

    • Dredging: good utilization in stable market
    • Offshore Energy: challenging conditions in capacity-driven spot markets
    • Towage: stable market prospects

    Across the board, 2014 was an operationally strong year with in addition a large number of exceptional items for a total amount on balance of EUR 200 million before tax. All three segments achieved a sharply higher result compared to 2013. Dredging & Inland Infra had a busy year with good fleet utilization, good project margins and substantial settlement results on old projects. Offshore Energy also had a good year with high fleet utilization and good project margins. Moreover, Dockwise contributed an extra quarter to earnings compared to 2013 and realized exceptional cancellation and rescheduling fees. Towage & Salvage reported a higher result with good results from the settlement of old salvage projects.

    The order book remained virtually stable at EUR 3,286 million (end-2013: EUR 3,323 million).

    Peter Berdowski, CEO Boskalis:

    “We look back on a fantastic 2014, a year in which we achieved a very strong performance across the full breadth of our activities. In this context, it is worth noting that the result Dockwise achieved in its first full year with the group was an all-time high.

    Despite being busy in the past year we made significant progress in optimizing our organization and the business processes, in accordance with our 2014-2016 Business Plan. The introduction of the previously announced divisional model has now been implemented, and the physical integration of Dockwise and Fairmount in Papendrecht is being completed.

    The great result in 2014 has enabled us to strengthen our balance sheet sooner than we expected, with the solvency ratio now exceeding 53%. And so amid turbulent conditions we came to the end of a fantastic year, with a strong balance sheet and a streamlined organization.

    The current market environment offers a mixed picture, with stability for both Dredging & Inland Infra and Towage, but challenging conditions for Offshore Energy in the capacity-driven spot markets, especially at Subsea Services as well as parts of Transport. On the other hand the current market also presents opportunities, even for selective growth. Any growth opportunities will be considered with the necessary caution to ensure that we remain strong and healthy.”

    Market developments

    The markets in which Boskalis operates are driven by growth in the world’s population and prosperity, pushing up global trade and energy consumption. In addition there are the irreversible effects of climate change. Boskalis responds to these trends. The extent to which these trends show positive development in the coming years will be strongly dependent on geopolitical stability and macro-economic growth. Positive investment decisions in relation to large maritime infrastructure projects, which generate work for Boskalis, are closely linked to this.

    We see a stable market picture in terms of large-scale maritime infrastructure projects and the developments in and around ports. The tender pipeline with capital dredging projects for the expansion and deepening of ports and waterways, land reclamation projects and tunnel developments looks positive, while maintenance work has a strong recurring nature. In large ports the development of the number of shipping movements and thus the demand for towage services is likely to remain stable in the coming years. Based on this market assessment, conditions in the Dredging & Inland Infra and Towage markets are expected to remain stable.

    In terms of developments in the offshore energy market we can see a difference between the short and the long term. The short term is strongly impacted by the low oil price, which is causing oil majors to postpone investment decisions realting to complex and costly offshore projects. However, in the medium to long term the development of prosperity and economic growth will drive the demand for energy.

    In the short term activities aimed at the capacity-driven spot markets such as Subsea Services and Transport are expected to be hit hardest. The picture at Marine Contracting and Subsea Contracting is more favorable, fuelled by developments in the areas of offshore wind, the decommissioning of old oil and gas platforms and LNG, for example in Western Canada.

    Outlook

    For this year and based on current insights, no major changes are expected in the Dredging & Inland Infra and Towage markets relative to 2014. Based on the current order book, the Dredging fleet utilization levels are expected to be good. The outlook for Offshore Energy is mixed, with long-term contracts and work already contracted expected to provide an important degree of stability, whilst the spot market-related Transport activities and Subsea Services are experiencing pressure on utilization levels and margins.

    The project-based nature of a significant part of our activities makes it difficult to give a specific quantitative forecast for the full-year result early on in the year. In light of this we are currently unable to provide quantitative guidance with regard to the 2015 full-year result. However, it is already clear that the contribution from possible exceptional items will be substantially lower in 2015 than the EUR 200 million contributed to EBIT in 2014.

    Capital expenditure in 2015 is expected to be EUR 250-275 million and will be financed from the company’s own cash flow.

    Boskalis has a very sound financial position and the solvency ratio now exceeds 53%. The high result and lower net debt position has reduced the net debt to EBITDA ratio to 0.7.

    Share buy-back program

    In mid-2014 Boskalis launched a share buy-back program of up to 10 million shares. To date 629,123 shares have been repurchased under the program. In light of the changed market conditions and the acquisition of the interest in Fugro, Boskalis considers it prudent to suspend the share buy-back program for a period of one year.

    Fugro

    Despite the uncertainty in the market Boskalis remains positive about the long-term prospects for the offshore energy market. It is against this background that Boskalis acquired a 20% interest in Fugro. Boskalis’ strategy is aimed at the offshore and (maritime) infrastructure markets, leveraging the company’s combination of high-end know how and maritime assets. This is an excellent fit with the core activities of Fugro. The two companies have much in common in terms of assets, knowledge, capital intensity, global spread and customer base, and are both global leaders in niche markets. Boskalis supports Fugro’s realigned and focused strategy.

    Dividend policy and dividend proposal

    The main principle underlying the Boskalis dividend policy is to distribute 40% to 50% of the net profit from ordinary operations as dividend, with Boskalis aiming to achieve a stable development of the dividend for the longer term. The choice of dividend form (in cash and/or entirely or partly in shares) takes into account the company’s desired balance sheet structure as well as the interests and wishes of the shareholders. In light of this, Boskalis will propose to the Annual General Meeting of Shareholders to be held on 12 May 2015 that a dividend of EUR 1.60per share be distributed in the form of ordinary shares, unless the shareholder opts to receive a cash dividend. The dividend will be payable from 9 June 2015.

    KEY FIGURES

    2014

    2013

    (in millions of EUR)

     

    Revenue

     3,166.9

     3,144.0

    EBITDA*

     945.9

     757.2

    Result from JVs and associates

     56.4

     63.7

    Operating result (EBIT)*

     652.3

     463.4

    Net profit

     490.3

     365.7

    Dividend per share in euro (2014: proposed)

     1.60

     1.24

    31-12-2014

    31-12-2013

    Order book

     3,285.5

     3,323.4

    * As of 1 January 2014 Boskalis applies IFRS11, which impacts the way joint ventures and associated companies are recognized. Our share in the net result of the joint ventures and associated companies is now included in EBIT(DA). 2013 figures adjusted for IFRS11.

     

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