Trading update: Boskalis maintains 2018 profit outlook
November 09 2018 - 2:00AM
Papendrecht, 9 November 2018
HIGHLIGHTS THIRD QUARTER
-
Good revenue development during the quarter with
a higher operating result compared to the first half year quarterly
average
-
Healthy utilization of trailing suction hopper
dredgers (Dredging)
-
Stable utilization of heavy transport vessels
(Offshore Energy)
-
Order book virtually stable at EUR 3.8
billion
OUTLOOK FOR 2018
-
Market picture unchanged
-
Dredging & Inland Infra: stable market
volumes and stable margins
-
Offshore Energy contracting: good projects in
the order book
-
Offshore Energy services: positive contribution
to operating result following the termination of loss-making
low-end transport activities
-
Towage: stabilizing at current levels
-
Salvage: positive outlook based on projects in
hand
-
Profit outlook 2018: sharp improvement in net
operating profit compared to first half year
Royal Boskalis Westminster N.V. (Boskalis) saw
revenue increase in the third quarter compared to the quarterly
average for the first half of the year. The operating profit (EBIT
adjusted for extraordinary charges) also increased compared to the
quarterly average for the first half of the year.
The order book stood at EUR 3.8 billion, virtually
stable compared to the end of June. Around EUR 0.5 billion of new
contracts were acquired in the third quarter.
Boskalis maintains its profit outlook for the full
year 2018. Barring unforeseen circumstances net operating profit in
the second half of the year is expected to be sharply higher
compared to the first half (EUR 34.5 million). However,
the net result is not expected to match the level achieved in the
second half of 2017 (EUR 75 million).
Operational
developments
The third quarter at Dredging & Inland
Infra was relatively stable compared to the first half of the year.
After a busy first half, the utilization of the hopper fleet was a
few weeks lower but on balance good given the conditions in the
market. As expected, utilization of the cutter fleet was low in the
third quarter but improved with the deployment of the Helios on the
Duqm project as from September. Revenue for the quarter was
slightly higher than the quarterly average for the first half of
the year. The results from ongoing dredging projects were lower
compared to the first half of the year but there was also the usual
positive contribution from the financial close out of projects that
were technically completed previously.
The projects acquired in the third quarter were mainly
port-related, in countries including Germany (maintenance dredging
in the Weser), Kenya (Mombasa) and Finland (Mussalo). Additional
work was also acquired on the Duqm project in Oman which will
ensure utilization of the Helios well into 2019. On balance, there
was a slight decrease in the order book at Dredging & Inland
Infra compared to mid-2018. Since the end of the quarter Boskalis
won the tender for the N69 New Connection road construction project
in the Netherlands and announced it will carry out the dredging
works for the development of the first large-scale LNG export
facility in Kitimat, Canada (LNG Canada).
Offshore Energy performed
better in the third quarter than in the first half of the year,
partly due to the decision to terminate the low-end transport
activities. Revenue and the segment result both rose compared to
the previous quarters. Nevertheless, market conditions remain
challenging and the first signs of recovery in the market have so
far only had a limited effect on work in progress.
In the contracting activities Seabed Intervention with the
TurkStream project and various cable-laying projects made a good
contribution to the result for the quarter.
In the services activities Marine Transport & Services had a
reasonable quarter given market circumstances. Despite the
continuing pressure on volumes, utilization of the heavy transport
vessels was stable compared to the first half of the year.
Following the decision to decommission eleven heavy transport
vessels the first of these will be scrapped in the fourth quarter.
Subsea Services had a reasonable quarter given market
circumstances. Two modern DSVs were purchased at the end of 2017
and establishing a position in this market is known to take time.
Finally Marine Survey (Gardline) continued the upward trend seen in
the first half with results well above the cautious initial
expectations.
Noteworthy contracts acquired in the third quarter include the
Triton Knoll cable-laying contract, a sizable logistical management
transport contract and a topside float-over contract for the Bokor
platform in Malaysia. On balance there was a slight decline in the
order book at Offshore Energy compared to mid-2018. At the start of
the fourth quarter Boskalis won the subsea contract for the
redevelopment of the Tyra offshore gas field in Denmark, an
important step towards broadening the subsea footprint with SURF
activities (Subsea Umbilicals, Risers & Flowlines).
At the Towage & Salvage
segment the third quarter for Salvage was dominated by two large
follow-up assignments after the earlier completion of two
contracts. Consequently both revenue and the result increased
compared to the quarterly average achieved in the first half of the
year.
At the strategic Towage partnerships (Smit Lamnalco, Keppel Smit
Towage, Saam Smit Towage and Kotug Smit Towage) there was no
material change in the picture in the quarter compared to the first
half of the year. The contribution of these activities to the
result was on balance similar.
Composition of the Board of Management
At the Annual General Meeting (AGM) in May 2019
the shareholders' approval will be sought for the reappointment of
Peter Berdowski (60) as CEO and of Theo Baartmans (57) as a member
of the Board of Management, both for a four-year term. The term of
office of the incumbent CFO, Hans Kamps, ends on the date of this
AGM. Carlo van Noort (43) will be proposed as his successor at the
AGM. Mr. Van Noort is currently financial director of Boskalis
Nederland.
Outlook
The Board of Management maintains the profit
outlook given at the release of the first half year results. Based
on the fleet planning and work in the order book and barring
unforeseen circumstances, a sharp improvement is expected in the
net operating profit in the second half of 2018 relative to the
first half of the year (EUR 34.5 million). However, the net result
is not expected to match the level achieved in the second half of
2017 (EUR 75 million).
Capital expenditure in 2018 is expected to total around EUR 235
million, excluding acquisitions. The amount is in line with the
level of depreciation and will be financed from the company's own
cash flow. Boskalis retains a strong financial position and the
company comfortably meets the covenants agreed with its
financiers.
2019 |
FINANCIAL CALENDAR |
7
March |
Publication of 2018 annual results |
8
May |
Q1 2019
trading update |
8
May |
Annual
General Meeting of Shareholders |
22
August |
Publication of 2019 half-year results |
8
November |
Q3 2019
trading update |
For further information
Investor relations:
Martijn L.D. Schuttevâer
ir@boskalis.com
Press:
Arno Schikker
press@boskalis.com
T +31 78 6969310
This is a
Boskalis press release on the grounds of article 17 paragraph 1 of
the European Market Abuse Regulation (596/2014).
This is an
English translation of the Dutch press release. In the event of any
disparity between the Dutch original and this translation, the
Dutch text will prevail.
Royal Boskalis
Westminster N.V. is a leading global services provider operating in
the dredging, maritime infrastructure and maritime services
sectors. The company provides creative and innovative all-round
solutions to infrastructural challenges in the maritime, coastal
and delta regions of the world with services including the
construction and maintenance of ports and waterways, land
reclamation, coastal defense and riverbank protection. In addition,
Boskalis offers a wide variety of marine services and contracting
for the oil and gas sector and offshore wind industry as well as
salvage solutions. Furthermore, Boskalis has a number of strategic
partnerships in harbor towage and terminal services (Kotug Smit
Towage, Keppel Smit Towage, Saam Smit Towage and Smit Lamnalco).
With a versatile fleet of more than 900 vessels and floating
equipment and 10,700 employees, including associated companies,
Boskalis operates in 90 countries across six
continents.
This press release can also be found on our
website www.boskalis.com.
pdf versie persbericht
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Koninklijke Boskalis Westminster N.V. via
Globenewswire
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