Papendrecht, 10 May 2017
Developments at Royal Boskalis
Westminster N.V. (Boskalis) in 2017 have so far proceeded in line
with the company's expectations.
· Lower revenue as a result of continued challenging
market conditions in the offshore
sector
· Further
pressure on profitability
· Reasonable fleet utilization at both Dredging and Offshore
Energy
· Increased order book
developments
At the release of the 2016 annual results Boskalis
announced that the market picture for the coming period would be
characterized by continued lower volumes of work and pressure on
both utilization levels and margins. The situation in the first
quarter of 2017 was in line with this expectation and the results
also met the company's own financial expectations. Compared to the
same period last year revenue declined at virtually stable fleet
utilization rates. Weak market conditions resulted in a
considerably lower result, particularly at Offshore Energy. The
order book rose in the course of the first quarter, due in part to
a number of sizable Dredging contracts.
Dredging & Inland Infra
Revenue at the Dredging & Inland Infra
division declined slightly compared to the quarterly average
achieved last year against a lower average margin. Notable projects
in the first quarter included port activities in the UK, Sweden,
South Korea and Brazil as well as the construction of an island off
the coast of Panama City. Given the circumstances, the utilization
rate of the hopper fleet was good and slightly higher than the
average utilization rate in 2016. The Queen of the Netherlands, the
largest trailing suction hopper dredger in the fleet, came back
into service in April after extensive repairs. The utilization rate
of the cutter fleet was good in the first quarter following an
extremely quiet 2016.
The order book of the Dredging & Inland Infra division
increased compared to the end of 2016. Notable new projects
contracted include the development of the port of Duqm (Oman), the
deepening and widening of the access channel to Jawaharlal Nehru
Port in Mumbai (India), port activities in Brazil and Australia and
an extension of the Fox River cleanup project in the United
States.
Offshore Energy
At Offshore Energy there was a decline in both revenue and the
result in the first quarter, in line with expectations.
The contracting part of the division including Installation &
Intervention and the offshore wind activities contributed well with
projects in progress and positive financial settlements from
previously completed projects. The offshore activities acquired
from VolkerWessels in mid-2016 made a significant contribution with
cable-laying projects in progress such as Galloper and
Wallney.
At Transport & Marine Services the Aasta Hansteen and Mariner
projects made a significant contribution to revenue. The
utilization rate of the Dockwise vessels was comparable to the
level seen in 2016. At Subsea Services the winter season on the
North Sea is traditionally quieter. The utilization rate of the
vessels was therefore low and this could only partly be offset by
the deployment of vessels at offshore wind farm projects and
unexploded ordnance disposal projects in Europe.
The Offshore Energy order book was stable compared to the end of
2016.
Towage & Salvage
Salvage had a quiet start to the year compared to
the same period last year which featured a number of larger
emergency response contracts. In the absence of sizable wreck
removal projects revenue therefore declined.
All Towage activities were transferred into
regional joint ventures with effect from the second quarter of
2016. The results of these activities are only recognized as
results from joint ventures and associates. As a result Towage did
not contribute to revenue in 2017, contrary to the first quarter of
2016 when the harbor towage operations in northwestern Europe still
contributed. The contribution from Towage to the result declined
due to lower volumes and fewer 'specials' that in the past were
carried out with a certain degree of regularity for clients in the
oil and gas sector.
outlook
The market in general has not changed
substantially since the release of the 2016 annual results and will
be characterized by lower volumes of work and pressure on
utilization rates and margins in the coming period.
In view of the favorable development of the order
book at Dredging & Inland Infra a large part of the fleet will
be utilized in 2017, albeit at lower margins than in previous
years. When taking on new work the emphasis remains on maintaining
utilization rates while assuming responsible project risks.
At Offshore Energy the outlook remains unchanged.
The completion of long-term contracts from previous years means
increased dependence on the spot market (services), where the
pressure on margins in the services part of the market continues to
be considerable.
All Towage operations were transferred to joint
ventures at the start of 2016. Market volumes have been relatively
stable although here too profitability has been lower compared to
previous years.
To respond to these market developments Boskalis
launched a fleet rationalization and cost reduction program last
year. A large part of the fleet rationalization program was already
carried out in 2016 in addition to impairment charges related to
part of the offshore fleet and associated goodwill. The final part
of the cost reduction program is aimed at lowering costs at head
office. The conclusions of the study will be announced soon.
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 result
for 2016 adjusted for impairment charges.
Boskalis' financial position remains strong; the
balance sheet is now net debt-free and the financial covenants
agreed with the debt providers are comfortably met. Capital
expenditure is expected to total around EUR 250 million in 2017,
excluding possible acquisitions. This amount will be financed from
the company's own cash flow.
2017 |
Financial AGENDA |
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 |
Trading
update on third quarter of 2017 |
This Boskalis press release has been disseminated
in accordance with article 17 paragraph 1 of the European Market
Abuse Regulation (596/2014).
for further information
Investor relations:
Martijn L.D. Schuttevâer
ir@boskalis.com
Press:
Arno Schikker
press@boskalis.com
T +31 78 6969310
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 harbour 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 over 90 countries across six
continents.
This press release can also be found on our
website www.boskalis.com.
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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