Papendrecht, 8 May 2019
The market picture and developments at Royal
Boskalis Westminster N.V. (Boskalis) for the first three months of
the year are in line with the expectations outlined at the
publication of the 2018 annual results.
Developments
During
the presentation of the 2018 annual results Boskalis expressed the
expectation that the market picture in 2019 would not be
fundamentally different than last year. The first quarter has
progressed in line with this expectation.
Revenue
was higher compared to the same period last year. Given the market
conditions, utilization of the Dredging fleet was good while
utilization at Offshore Energy showed a mixed picture. The size of
the order book was stable at the end of the quarter compared to the
end of 2018 and since then various new projects were contracted
both at Dredging & Inland Infra and Offshore Energy.
Dredging & Inland Infra
Revenue at the Dredging & Inland Infra
division rose compared to the first quarter of last year. Notable
projects in progress include Duqm (Oman), JNPT (India),
Nordvikkudden (Sweden), Pulau Tekong Polder and Tuas Terminal 2
(both in Singapore) and various medium-sized projects in the
Netherlands.
Given the market conditions, utilization of the
hopper fleet was good. Partly as a result of planned repairs of a
mega hopper the utilization rate was lower than the annual
utilization rate for 2018. Utilization of the cutter fleet was
strong in the first quarter, due in part to the deployment of the
mega cutter Helios on the Duqm project.
The order book of Dredging & Inland Infra was
virtually stable compared to the end of 2018. Notable new
contracted projects include the expansion of the Port of Adelaide
(Australia) and various smaller projects in Europe. After the close
of the quarter two projects were contracted in Indonesia as well as
a large infrastructural project in the Netherlands (Rijnlandroute
sub-project).
Offshore Energy
In line with expectations, the first quarter at
Offshore Energy was difficult due to seasonal effects, on the one
hand, and persistently challenging market conditions, on the other.
Revenue was slightly higher compared to the first quarter of 2018
while the divisional operating result remained at a comparable
negative level. In addition to seasonal effects, the result was
adversely impacted by a strong dependence on a competitive spot
market for the services activities and project-specific issues at
Offshore Wind.
The contracting part of the division comprises
Marine Installation & Intervention (I&I) and the Offshore
Wind activities. The main project in progress at I&I was Nord
Stream 2 while at Offshore Wind a great deal of work was executed
at East Anglia, Borssele Alpha, Hohe See and Horns Rev 3. Revenue
in contracting rose compared to the same period last year.
The services section of the division comprises
Marine Transport & Services, Subsea Services and Marine Survey.
At Marine Transport the volume on the spot market was good, even
though the rates were sharp. At Subsea Services and Marine Survey
(Gardline) the winter period on the North Sea was seasonably quiet
and the level of revenue was comparable to the early part of last
year. In the first quarter Boskalis acquired a stake in Middle East
based Horizon Geosciences. The associated survey activities will
start to contribute to the group result as of the second quarter of
the year.
Average utilization of the various types of
offshore vessels was comparable to the level seen at the start of
2018. The total Offshore Energy order book rose slightly compared
to the end of 2018.
Towage & Salvage
Salvage had a good start to the year with a
successful emergency response project relating to a fire aboard the
Yantian Express, a large container ship on the Atlantic Ocean. As a
result of these activities and ongoing cleanup activities
surrounding the Maersk Honam as well as several smaller emergency
response projects, revenue at Salvage rose compared to the first
quarter of 2018.
The intended sale of the stakes in the Saam Smit
Towage and Kotug Smit Towage joint ventures was announced early in
2019. Since then these joint ventures have been recognized as
assets held for sale, and as such no longer contribute to the
result of the division. The result of the other Towage joint
ventures was stable.
The intended sale of our stake in Saam Smit Towage
to SAAM is proceeding according to plan. The transaction is
expected to close in the third quarter. The proposed sale of Kotug
Smit Towage is progressing steadily and is expected to close in the
second half of this year.
Share buyback
program
Boskalis announced a share buyback program early February with the
intention to repurchase the equivalent of EUR 100 million
of its own shares. The program was launched in mid-March and in the
period up to 7 May 165,676 shares were purchased representing a
total value of EUR 4.0 million.
Outlook
The market picture for 2019 is not expected to be
fundamentally different than that of 2018.
The project-based nature of a significant part of
our activities, along with the uncertain market conditions, makes
it difficult to give a specific quantitative forecast with regard
to the 2019 full-year result early on in the year. However, while
the EBITDA level is expected to remain stable, it will be a
challenge to exceed the 2018 net operating profit.
Capital expenditure in 2019 is expected to exceed
EUR 250 million, including the recently acquired assets of Bohlen
& Doyen offshore but excluding acquisitions, and will be
financed from the company's own cash flow.
Taking into account seasonal patterns, capital
expenditures including the acquisition of Bohlen & Doyen
offshore, the acquisition of the equity stake in Horizon, the share
buyback program and the impact of an all-cash dividend, the net
debt position is expected to increase in the first half of the year
before decreasing substantially in the second half of the year, due
in part to the completion of the sale of the harbour towage joint
ventures. Boskalis continues to have a strong financial position
and comfortably meets its financial covenants.
2019 |
Financial CALENDAR |
8
May |
Annual
General Meeting of Shareholders |
10
May |
Ex-dividend date |
13
May |
Record
date for dividend entitlement (after market closes) |
20
May |
Dividend
payment date |
22
August |
Publication of 2019 half-year results |
8
November |
Trading
update on third quarter of 2019 |
FOR FURTHER INFORMATION
Investor relations:
Martijn L.D. Schuttevâer
ir@boskalis.com
Press:
Arno Schikker
press@boskalis.com
T +31 786969310
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 core activities such as
coastal defense, riverbank protection and land reclamation Boskalis
is able to provide adaptive and mitigating solutions to combat the
effects of climate change, such as extreme weather conditions and
rising sea levels, as well as delivering solutions for the
increasing need for space in coastal and delta regions across the
world. The company facilitates the development of offshore energy
infrastructure, including renewable wind energy. Boskalis is
furthermore active in the construction and maintenance of ports,
waterways, access channels and civil infrastructure, thus helping
to facilitate trade flows and regional socio-economic development.
In addition, Boskalis is a global marine salvage expert and 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 11,300 employees, including associates,
Boskalis is creating new horizons around the world.
This press release can also be found on our
website www.boskalis.com.
pdf version press release
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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