Vopak to Divest from 15 Terminals
Dutch oil and chemicals storage company Vopak said on Wednesday it would divest from 15 primarily smaller terminals and planned to cut capital expenditure by about $136 million (100 million euros).
The world's largest independent storage tank operator has suffered from the harsh business climate in Europe, where high crude prices and sinking diesel profits have prompted refiners to cut operating rates by nearly a quarter this summer.
"Since 2013, the tank storage market has been adversely impacted by a substantial incremental supply of storage capacity as well as by legislative and geopolitical developments," the company said in a statement.
ING analyst Quirijn Mulder said in a note to clients that the realignment of Vopak's portfolio did not come as a surprise as certain terminals have not performed well for many years.
The company did not identify the location of the 15 terminals but said they currently contribute about 4 percent to the its overall EBITDA.
Vopak offers oil, chemical and biofuel storage in major ports including Rotterdam, Fujairah, Tallinn and Singapore, and had scheduled capacity expansion in several sites, including in Singapore, China, and the Netherlands in the second quarter.
"The competitive landscape has changed, especially in Europe and, we believe, in Latin America. The company has not said so yet, but the effect in FY14 is quite dramatic due to further pressure on prices and the difficult environment," Mulder said.
The company warned in April that 2014 EBITDA was expected to be 5-10 percent lower than 2013.
Vopak said on Wednesday that it expected adjusted EBITDA to exceed the 2012 level of 768 million euros at the latest in 2016.
The company also said it aimed to reduce its capital expenditure programme by 100 million euros to about 700 million until 2016, and cut its cost base by about 30 million euros from 2016.
Chief Executive Eelco Hoekstra told Reuters last month that the company was considering building a liquefied natural gas terminal in Southeast Asia.
Vopak shares, which have lost about 22 percent of their value over the past year, were up 2.4 percent marginally at 36.32 euros at 1322 GMT on the Amsterdam Stock Exchange.
($1 = 0.7345 Euros)
(Reporting by Anthony Deutsch in Amsterdam and Roshni Menon in Bangalore; Editing by Jason Neely and Saumyadeb Chakrabarty)