Papendrecht, 16 August 2018
HIGHLIGHTS FIRST HALF YEAR 2018
-
Revenue: EUR 1.2 billion
-
EBITDA: EUR 167 million
-
Operating result: EUR 47 million
-
Extraordinary charges: EUR 397 million
-
Net operating profit: EUR 34.5 million
-
Order book: EUR 3.9 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 from termination of loss-making low-end
transport activities
-
Towage: stable at current levels
-
Salvage: positive outlook based on projects in
hand
-
Profit outlook: sharp improvement in net
operating profit compared to H1
The operating results of Royal Boskalis
Westminster N.V. (Boskalis) decreased in the first half of the year
compared to the first half 2017. This decline was mainly due to a
sharp drop in the result of the Offshore Energy division where the
transport activities at the low end of the market in particular
worsened further and are now heavily loss-making. This segment is
rapidly becoming a commodity transport market, often not oil and
gas-related, that is structurally confronted with (Asian)
overcapacity. In addition, the commodity activities do not fit
within Boskalis' strategy aimed at a position higher up in the
Transport & Installation market. These developments have
prompted Boskalis deciding to terminate these activities. Due in
part to this decision an extraordinary charge of EUR 397.0
million was recognized in the first half of the year, consisting
mainly of a goodwill impairment and a write-off of vessels.
A net operating profit of EUR 34.5 million was
realized in the first half of the year (H1 2017: EUR 75.1 million).
Including extraordinary charges the company reported a net loss of
EUR 361.4 million.
Revenue in the first half of the year amounted to
EUR 1.17 billion, a 6.6% increase compared to the first half
of last year (H1 2017: EUR 1.09 billion).
EBITDA totaled EUR 167.2 million in the first half
of the year and the operating result was EUR 47.4 million, both
adjusted for extraordinary charges (H1 2017 EBITDA: EUR 225.1
million, operating result: EUR 101.7 million).
Revenue increased at the Dredging & Inland
Infra segment, as did the utilization of the hopper fleet. Large
ongoing projects in Oman and India contributed to this. The margins
and result were stable compared to 2017.
At Offshore Energy the contracting activities
revenue was virtually unchanged, with important contributions from
the cable-laying activities and seabed intervention projects such
as TurkStream and Nord Stream 2. The sharp drop in the result of
the division is largely attributable to the decline at services.
Boskalis is able to set itself apart at the top end of the
transport market where many opportunities still exist whereas the
smaller, predominantly older transport vessels at the low end of
the market are now loss-making. This part of the market is at the
lower end of the S curve and is not strategically interesting for
Boskalis. Therefore Boskalis has decided to exit this market
segment and take the closed-stern heavy transport vessels (types
IIb and III) out of service. This will result in a structural
improvement in the operating result of more than EUR 25 million on
an annual basis.
Salvage had a good first half of the year with
several smaller emergency response contracts as well as the
successful salvage of the ultra-large container vessel Maersk Honam
which had caught fire in the Arabian Sea. The volumes at Towage are
relatively stable, albeit that margins are under pressure in a
number of ports, mainly due to price erosion in container shipping.
A loss of margin has resulted in an adjustment of the book value of
two joint ventures by means of a goodwill impairment.
Boskalis' financial position continues to be
strong, with a solvency ratio of 56.2% and a modest net debt
position of EUR 239 million.
The order book, excluding our share in the order
book of joint ventures and associated companies, increased to EUR
3.89 billion at the end of the first half of the year (end-2017:
EUR 3.50 billion).
Peter Berdowski, CEO of Boskalis:
"There were two sides to the first half of the
year. While the contracting activities at Dredging and Offshore
Energy made a good contribution, developments at offshore services
had a significant adverse effect on the result.
Dredging performed in line with
expectations. We were able to increase revenue with a stable result
and we were also successful in acquiring a number of large projects
which considerably increased our work in hand.
The offshore contracting
activities such as seabed intervention and cable-laying also made a
good contribution to the result. The pain in the first half of the
year was clearly felt on the services side of offshore,
particularly the low end of the transport market. As previously
announced, we have reviewed our position there and have decided to
fully exit this loss-making market segment that offers no prospects
for improvement. With the lower end of the transport fleet we are
slipping down further in the market and we are unable to add
sufficient value. This is in contrast to the upper end of the fleet
where we are distinctive, especially in combination with our other
vessels and activities - fully in line with our strategy.
Looking ahead we are moderately
optimistic. At Dredging we have a well-filled order book and see
interesting and sizable projects across the market. In Offshore
Energy we expect to see improved results at the contracting
activities as well as at services as a result of the fleet
reduction.
We are also seeing an increase in
tender activities in the offshore market for the medium term. In
the coming period we will therefore continue to seek ways to
strengthen the company and expand it in the offshore market.
Following the successful acquisition of Gardline we are seeing more
opportunities in the survey market. At the same time we are focused
on further strengthening our position in the high-end transport and
installation market."
Outlook
At Dredging & Inland Infra we see a pipeline
with a good number of tenders and volume of work. The current size
of the order book means that a large part of the fleet will be
utilized in the next six to nine months.
At Offshore Energy the outlook for the remainder
of the year is reasonable. The large contracting projects in the
order book are expected to make a good contribution to the result,
and the outlook for the ongoing cable-laying projects in offshore
wind is also favorable. At services however our reliance on the
unpredictable and often competitive spot market remains large.
Divesting the low end of the transport fleet will reduce part of
this reliance and remove loss-making activities. The respective
vessels are expected to be phased out in the next 12 months, in
line with any contractual obligations, without any further
consequences for the result.
The result of Towage & Salvage is not expected
to materially change in the second half of the year.
Based on the fleet planning and work in the order
book and barring unforeseen circumstances, the Board of Management
expects a sharp improvement in the net operating profit in the
second half of 2018 relative to the first half year. However, it is
not expected that the net result level achieved in the second half
of 2017 will be matched.
Capital expenditure in 2018 is expected to be
around EUR 250 million, excluding acquisitions, and will be
financed from the company's own cash flow. Boskalis has a very
sound financial position and the solvency ratio is 56.2%. At the
end of the period Boskalis had a modest net debt position of
EUR 239 million and comfortably met its financial
covenants.
>>> click here for
the full version of the 2018 half year report including all the
financial details <<<
KEY FIGURES |
1st HY
2018 |
1st HY
2017 |
2017 |
(in EUR million) |
|
|
|
Revenue |
1,165.7 |
1,094.0 |
2,342.6 |
EBITDA |
167.2 |
225.1 |
436.6 |
Net
result from strategic JVs and associates |
14.8 |
21.9 |
31.0 |
Operating
result |
47.4 |
101.7 |
185.0 |
Extraordinary charges |
397.0 |
- |
- |
EBIT |
-349.6 |
101.7 |
185.0 |
Net
operating profit (net profit adjusted for extraordinary
charges) |
34.5 |
75.1 |
150.5 |
Net
profit (loss) |
-361.4 |
75.1 |
150.5 |
Earnings
per share (in EUR) |
0.27 |
0.58 |
1.15 |
|
|
|
|
|
30 June 2018 |
30 June 2017 |
End 2017 |
Order
book |
3,885 |
3,246 |
3,495 |
Our share in the net result of
strategic joint ventures and associated companies is included in
EBIT(DA).
2018 EBITDA and earnings per share are presented
excluding extraordinary charges.
Live audio webcast
The Board of Management of Royal Boskalis Westminster will comment
on the 2018 half-year results at the analyst meeting (11.30 am -
12.45 pm CET) on 16 August 2018. This meeting can be followed by
means of a live audio webcast, details of which can be found on the
homepage (www.boskalis.com).
2018-2019 |
FINANCIAL CALENDAR |
16
August |
Publication of 2018 half-year results |
9
November |
Trading
update on third quarter 2018 |
7
March |
Publication of 2018 annual results |
8
May |
Trading
update on first quarter 2019 |
8
May |
Annual
General Meeting of Shareholders |
22
August |
Publication of 2019 half-year results |
8
November |
Trading
update on third quarter 2019 |
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.
Half Year Report
pdf version press release
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions 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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