IHC Merwede Increases Revenue and Profit

Press Release
Wednesday, April 18, 2012

IHC Merwede’s expanding portfolio has helped it to record increased revenue and profit figures for 2011, and to maintain its strong order book for 2012 and beyond.

In the past year, IHC Merwede’s revenue has increased by four per cent to reach € 1.05 billion. The company’s net profit has also increased to € 103 million with a solvency ratio of 40 percent, demonstrating that IHC Merwede is in strong financial health and able to implement its growth strategy.

With sales amounting to € 1.057 billion, IHC Merwede assured itself of a substantial order book of € 1.18 billion – the equivalent of more than one year’s workload. Internationalization continues to be an important priority for IHC Merwede, as it succeeds in reducing costs and meeting the needs of its markets.

IHC Merwede is continuing to expand its capabilities and portfolio through acquisitions and by forging links with other organizations to help build long-lasting customer partnerships.

Despite the uncertainty created by Europe’s financial crisis, the rest of the world’s markets – such as South America, Africa and Asia – are still growing, which made it possible for IHC Merwede to continue strengthening its position within the international maritime industry. Although the short-term outlook is hesitant, especially for the European dredging market, the long-term outlook is more positive. There are many ongoing projects around the world, and markets in China and India are continuing to grow. However, it is taking longer for these
customers to make purchasing decisions, and there is fierce competition.

The wet mining market is developing quickly, and the deep-sea sector is a long-term business driver, which is showing promise. To capitalize on this, IHC Merwede has set up a mining division for ongoing investment.

The offshore market for ships made a comeback during the turn of the year, thanks to the boom in South America, where Brazil is becoming a powerful force. This resulted in IHC Merwede’s largest ever offshore order – three pipe-laying vessels for SapuraCrest.

IHC Merwede’s advanced offshore equipment has also been identified as an area for expansion, and the company is moving towards building major maritime work tools. This sector has established itself over the past year and is encouraging for the business as a whole. The
renewable energy market is also offering many opportunities to IHC Merwede.

IHC Merwede has four strategic priorities: growth; internationalization; product and process development; and internal and external cooperation.

Growth has been achieved by expansion into the different markets of dredging, mining, offshore and renewable energy. IHC Merwede is active in multiple markets and will continue to pursue growth by developing new products and markets, and acquiring companies that fit within its corporate profile.

The financial side of the business is becoming increasingly important in today’s markets, not just during the period of construction, but also after delivery. Arranging pre- and post-delivery finance is becoming an essential feature in many contracts. In addition, life-cycle support is
growing at a steady rate and helping to expand IHC Merwede’s overall business.

The company will continue to spend three per cent of its revenue in innovation and product development in 2012. There is a never-ending desire to improve existing technology through incremental innovation and increase revenue. Regarding process development, IHC Merwede
has reorganized its shipbuilding activities and created a new approach to its business, the product market combination (PMC) structure, which has brought it even closer to the market.

“The financial results for IHC Merwede represent a great achievement for all concerned,” said IHC Merwede’s President, Govert Hamers. “This is a clear sign that our strategic approach is making a significant impact with an integrated offering of innovative vessels, advanced
equipment and life-cycle support across the dredging, mining and offshore markets. The long-term future also looks good for the business as a whole, and the expectation is that IHC Merwede will maintain its revenue over the next financial year.
 

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