Boskalis Posts Record Profits
Royal Boskalis Westminster N.V. (Boskalis) achieved net profit of EUR 490 million in 2014.
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).
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."
According to the company 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.
The spokesman of the company stated that they 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 there is 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.
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.