Sharp Contrasts in Markets Impact Van Oord

The global contractor specialising in dredging, marine engineering and offshore projects (oil, gas and wind) said that the volume of work in offshore wind was stable, and the market dynamic in the offshore wind sector will generate a lot of opportunities for years to come. 

"The transition to renewable energy is taking shape and the construction of offshore wind farms is a growing market in which we have an strong reputation," Pieter said.

Van Oord recorded EUR 1.53 billion in revenue in 2017 (2016: EUR 1.71 billion) with a net profit of EUR 78 million (2016: EUR 90 million).

"Last year there were sharp contrasts between our markets. Our dredging and oil & gas activities suffered as a result of the crisis in the maritime world. Although we tendered for a considerable number of projects, the number of contracts ultimately awarded was disappointing, in part because projects were put on hold or cancelled. Prices are also under pressure and the dredging market is experiencing overcapacity," said a statement from the company.

"Oil and gas companies cut investments by half between 2014 and 2017, and that has had a noticeable impact on the market. Nevertheless, our business unit Offshore oil & gas had a reasonable year, with good capacity utilisation for our flexible fallpipe vessels. The lower volume of work has put pressure on prices, however," it added.

The dredging market had a tough year in 2017. Clients took a long time to put projects out to tender and competitive pressure increased. Many countries are putting their efforts into stimulating their own economies and contracting their work to local parties.

As a whole, the market for our business unit Offshore oil & gas was unfavourable, mainly as a result of low oil prices. However, we are doing well in our niche markets, SRI (subsea rock installation) and OPI (offshore pipeline installation). 

"The market dynamic in the offshore wind sector is another story altogether. The growth of the world economy and population is driving the global demand for energy," it said.

Offshore wind’s revenue is stable. Its order book is almost full and we have started working on major new projects. There is a lot of innovation in this sector; turbines are getting bigger all the time, thereby reducing the payback period for wind farms. 

The new Dutch government is committed to the Paris carbon reduction targets. This means that the Netherlands will continue to build offshore wind farms in the North Sea over the next decade, with good prospects for our company.