Papendrecht, 8 March 2017
HIGHLIGHTS OF 2016
-
Revenue: EUR 2.60 billion
-
EBITDA: EUR 660 million
-
Operating net profit: EUR 276 million
-
Impairment charges: EUR 840 million
-
Order book: EUR 2.92 billion
-
Proposed dividend: EUR 1.00 per share
OUTLOOK
-
Mixed market picture
-
Reasonable market volume in Dredging &
Inland Infra
-
Stable market volume in Towage
-
Fewer contracting projects for Offshore
Energy
-
Demand/supply imbalance in Offshore Energy
services
Royal Boskalis Westminster N.V. (Boskalis)
achieved an operating net profit of EUR 276 million in 2016,
in line with expectations. Including non-cash impairment charges of
EUR 840 million after tax the company reported a net loss of EUR
564 million (2015: net profit of EUR 440 million).
Revenue declined by 20 per cent to EUR 2.60
billion (2015: EUR 3.24 billion). Adjusted for
consolidation, deconsolidation and currency effects, revenue was
down 26 per cent.
EBITDA amounted to EUR 660 million and the
operating result was EUR 385 million, both adjusted for
impairment charges (2015 EBITDA: EUR 885 million and operating
result: EUR 577 million).
Given that 2015 was still an exceptionally good
year with strong fleet utilization rates and outstanding project
margins the transition to and contrast with 2016 was equally
exceptionally large.
Dredging & Inland Infra had a quiet year. The
sharp decline in revenue was partly due to a very busy 2015 with
the execution of the Suez Canal project, but also reflects the
conditions in the market. Moreover, revenue and fleet utilization
were negatively impacted by the suspension of work on the Pluit
project in Indonesia. The results on projects in progress were
reasonable.
Revenue rose at Offshore Energy due to the
addition of the offshore activities acquired from VolkerWessels.
These activities also made a good contribution to the result. The
remaining activities made a reasonable to good contribution despite
the deteriorated market conditions.
Towage & Salvage reported a lower result
compared to the previous year, partly as a result of
deconsolidation effects at Towage. Salvage had a good but very
quiet year.
In light of the strongly deteriorated conditions
in the offshore market and the resulting outlook we recently
announced non-cash impairment charges of EUR 840 million after tax.
These charges pertain almost entirely to the service-related part
of Boskalis' offshore oil and gas activities and relate to the
impairment of both vessels and goodwill.
Boskalis' financial position continues to be
strong, even after the impairment. At the end of 2016 Boskalis was
net debt-free with a positive net cash position of EUR 203
million.
The order book increased to EUR 2.92 billion
(end-2015: EUR 2.49 billion).
Peter Berdowski, CEO of
Boskalis:
"After the best two years in
Boskalis' history, we found ourselves over the course of 2016
increasingly faced with the reality of the current market
conditions, particularly in the offshore market. In that sense 2016
was a year of extreme transition for us, from economic high tide to
low tide. The analyses carried out for our new business plan point
out that a rapid recovery in the offshore market is not expected.
And so where necessary we are adapting the organization to this new
reality with further improvements in efficiency and
effectiveness.
But we are also expressly looking
at opportunities that a market such as this can offer us for
strengthening the company for the medium term, when the offshore
market will start picking up again. And so the period ahead
presents us with a fascinating, challenging mix of sharpening up
and expansion.
A challenge that we are
excellently placed for given our financial strength, experience and
vigor."
Market developments
The long-term megatrends that underpin the Boskalis business model
remain positive. These business drivers are structural growth and
rising prosperity of the global population, which in turn drives
growth in global trade and demand for raw materials and energy.
Global warming also continues to create business opportunities for
Boskalis, with a growing need for coastal defense and riverbank
protection in response to increased flooding as a result of the
more extreme weather conditions. While the long-term trends are
positive, in the short term they are not converting into promising
projects across the board. In some of the regions and markets where
Boskalis is active demand is expected to develop less favorably in
the coming years and the outlook is uncertain. Boskalis will
continue to focus on market segments that demonstrate long-term
structural growth as well as offering opportunities in the short
term: Ports, Energy (oil, gas, wind and the dismantling of old
offshore platforms) and Climate change-related projects (coastal
defense and riverbank protection).
The new Corporate Business Plan 2017-2019 takes a
detailed look at the development of our business drivers and how
these translate into our end markets. Despite the short-term
challenges Boskalis is positive about the chances and opportunities
for the medium and long term. We see plenty of scope for further
expansion of the business; opportunities at Dredging & Inland
Infra, as well as Towage, but especially in the high-end segment of
the Offshore Energy market. The current difficult circumstances in
the offshore market also offer distinct opportunities. The new
Business Plan is discussed in greater detail in the Annual Report
2016 that is published later today, Wednesday 8 March.
Outlook
The market picture for the year ahead will be characterized by
continued lower volumes of work and pressure on both utilization
levels and margins. At Dredging & Inland Infra we see a
reasonable volume of work in the market for the short term. For
Boskalis the emphasis lies on maintaining utilization at a
responsible level of project risk. The current size of the order
book means that a good part of the fleet will be occupied for 2017,
albeit at lower margins than in previous years. The outlook for
2017 is less favorable at Offshore Energy. Following the conclusion
of a number of long-term contracts from previous years and the
completion of several large offshore wind farm projects revenue
will decline and be more dependent on the spot market (services),
where margins remain under continued pressure. The last of the
Towage activities were transferred to joint ventures in 2016.
Market volumes are relatively stable here, but even so there is
increased pressure as well, especially for terminal services.
The market conditions combined with the outlook
described gave rise in 2016 to the fleet rationalization project
and resulted in the impairment of vessels and goodwill,
particularly in the service-related part of the offshore oil and
gas activities. A cost-reduction program has now also been
launched, aimed at cutting head-office costs.
The project-based nature of a significant part of
our activities, in addition to the uncertain market conditions,
makes it difficult to give a specific quantitative forecast with
regard to the 2017 full-year result early on in the year. It is,
however, clear that the net result will be lower than the 2016
result adjusted for the impairment charges.
Capital expenditure in 2017 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 equals 56%. At the
end of 2016 Boskalis was net debt-free and comfortably met its
financial covenants.
Dividend policy and dividend
proposal
The main principle underlying the Boskalis dividend policy is to
distribute 40% to 50% of the net profit from ordinary operations as
dividend. In determining the dividend for 2016 it was decided to
adjust the net result for the non-cash impairment charges.
The choice of dividend form (in cash and/or fully
or partly in shares) takes into account the company's desired
balance sheet structure as well as the interests and wishes of the
shareholders. In light of this,
the 2016 dividend will once again be distributed in a choice of
cash or ordinary shares. In order to prevent the resulting
dilution, the number of shares that will be issued in early June
for this purpose will subsequently be repurchased.
Boskalis will propose to the Annual General
Meeting of Shareholders to be held on 10 May 2017 that a dividend
of EUR 1.00 per share be distributed in the form of ordinary
shares, unless the shareholder opts to receive a cash dividend
(2015: EUR 1.60 per share). The dividend will be payable from 6
June 2017.
KEY FIGURES |
2016 |
2015 |
|
(in millions of EUR) |
|
|
|
Revenue |
2,596.3 |
3,240.3 |
EBITDA * |
660.5 |
884.7 |
Net result from JVs and associates * |
11.3 |
43.3 |
Operating result |
384.6 |
577.3 |
Impairment charges |
842.6 |
14.5 |
EBIT |
-458.1 |
562.8 |
Net profit * |
276.4 |
440.2 |
Net profit (loss) |
-563.7 |
440.2 |
Dividend (proposal) per share in euro |
1.00 |
1.60 |
|
|
|
|
31-12-2016 |
31-12-2015 |
Order book |
2,923.9 |
2,490.0 |
*2016 figures adjusted for impairment charges
>>> click here for the
full version of the press release including all the financial
details <<<
Live webcast
The Board of Management of Royal Boskalis Westminster N.V. will
comment on the 2016 full-year results and present the strategy for
2017-2019 (the Corporate Business Plan 2017-2019) at the analysts'
meeting (11.30 am - 1.30 pm CET) on 8 March 2017. This meeting can
be followed by means of a live webcast (Dutch spoken with
simultaneous translation into English), details of which can be
found on the corporate website (www.boskalis.com).
Publication of Annual
Report
Royal Boskalis Westminster N.V. will publish both its Annual Report
2016 and its Corporate Social Responsibility (CSR) Report 2016
today, 8 March. The reports, which are only published in English,
will be made available in the course of the day on
www.boskalis.com.
2017 |
Financial agenda |
8
March |
Publication of 2016 annual results |
10
May |
Q1 2017
trading update |
10
May |
Annual
General Meeting of Shareholders |
12
May |
Ex-dividend date |
15
May |
Record
date for dividend entitlement (after market close) |
29
May |
Final
date for stating preference for dividend in cash or shares |
1
June |
Determination and publication of conversion rate for stock dividend
based on the volume-weighted average share price on 30 and 31 May
and 1 June (after market close) |
6
June |
Dividend
payment and delivery of shares |
17
August |
Publication of 2017 half-year results |
10
November |
Q3 2017
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 (SMIT Salvage). 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 11,700 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.
Financial Review 2016
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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