Papendrecht, 7 March 2019
HIGHLIGHTS 2018
-
Revenue: EUR 2.6 billion
-
EBITDA: EUR 354 million
-
Operating result: EUR 119 million
-
Extraordinary charges: EUR 519 million
-
Net operating profit: EUR 83 million
-
Order book: EUR 4.3 billion
-
Dividend proposal: EUR 0.50 per share fully in
cash
OUTLOOK
-
Dredging: reasonable market volume with stable
margins
-
Offshore Energy contracting: good projects in
the order book with interesting opportunities
-
Offshore Energy services: continued dependence
on spot market for transport and diving with growth opportunities
for survey
-
Towage: intended divestment of equity stake in
Saam Smit Towage and Kotug Smit Towage; other activities
stable
Royal Boskalis Westminster N.V. (Boskalis) closed
2018 with a lower result, in line with expectations. Net operating
profit was EUR 83 million (2017: EUR 150 million).
Including an almost entirely non-cash extraordinary charge of EUR
519 million there was a net loss of EUR 436 million.
Revenue rose 10% compared to the previous year to
EUR 2.57 billion (2017: EUR 2.34 billion).
EBITDA equaled EUR 354 million and the operating
result was EUR 119 million, both adjusted for
extraordinary charges (2017: EBITDA EUR 437 million and EBIT
EUR 185 million).
The lower result is mainly attributable to a sharp
decline in the result at the Offshore Energy division, which posted
an operating loss for the first half of 2018. In light of the poor
prospects the decision was taken in the first half of the year to
terminate the low-end transport activities within this division.
Market conditions have also deteriorated for the harbor towage
activities, mainly as a result of the consolidation among the large
container shipping companies. Together these developments resulted
in an extraordinary charge of EUR 519 million, almost entirely
non-cash and consisting primarily of impairments of goodwill and
vessels.
Dredging & Inland Infra had a relatively
stable year. With a number of large works in progress in countries
including India and Oman, supplemented by a large number of
medium-sized projects, both revenue and the result rose by over
10%. Utilization of both the hopper fleet and the cutter fleet was
slightly higher than in the previous year. The margin was stable
compared to 2017 with the usual combination of results from ongoing
works and from the financial settlement of projects completed
earlier.
At Offshore Energy revenue rose 7% due to a strong
contribution from the contracting activities and the addition of
survey (Gardline). The strong decline in the division's results was
largely due to the deterioration at services. The winding-up of the
loss-making transport activities at the low end of the market is
proceeding according to plan. The transport and subsea activities
had a difficult year and were loss-making on balance.
At Towage & Salvage the combined result,
adjusted for extraordinary charges, was virtually stable. The
contribution from Towage declined, mainly due to lower margins as a
result of the consolidation among the large container shipping
companies. The changed market situation prompted a strategic
reorientation of the harbor towage joint ventures, which resulted
in the proposed sale of the stakes in the Saam Smit Towage and
Kotug Smit Towage joint ventures. Salvage had a busy year with two
large contracts, including the successful salvage of the
ultra-large container vessel Maersk Honam. Together with numerous
smaller contracts this resulted in higher revenue and an increased
result.
Boskalis' financial position continues to be
strong, with a solvency ratio of 56% and a modest net debt position
of EUR 131 million.
The order book, excluding our share in the order
book of joint ventures and associated companies, increased by 23%
to EUR 4.29 billion (end-2017: EUR 3.50 billion).
Peter Berdowski, CEO of Boskalis:
"In the past year we once again executed a large
number of impressive projects at home and abroad. In doing so we
once again pushed back boundaries, for example with the dry
transport of an FPSO weighing a record 90,000 tons and with the
largely dry excavation of a new port in Duqm, Oman.
At Dredging the performance was
in line with expectations with a slightly higher fleet utilization
rate and an increase in both revenue and the result. In addition we
managed to achieve a substantial increase in contracted work,
boosting the order book at Dredging by more than 20% to over EUR 3
billion.
At Offshore Energy there was a
positive contribution primarily from the contracting activities and
Gardline's survey services. Heavy Marine Transport experienced
difficulties, particularly at the lower end of the market, which is
why we are terminating the low-end transport activities.
Given the changed market dynamics
in recent months we undertook a reorientation of the strategic
position we hold with our harbor towage activities. The conclusion
was that further consolidation is needed and that there is no
active role for us in this. Consequently the decision was taken to
sell our stakes in both Saam Smit Towage and Kotug Smit
Towage.
Looking ahead, we see cautious
signs of recovery in the markets relevant to us in due course,
although we are still a long way away from the exuberant market
climate of three to five years ago. In the short term we will
continue to maintain a disciplined and selective focus on
opportunities to strengthen our position, in anticipation of
recovery further down the line."
Market developments and strategy
update
The long-term macro trends that underpin the Boskalis business
model are structural economic growth and increasing prosperity of
the global population, along with the associated growth in global
trade and growing demand for raw materials and energy. The effects
of global warming, especially extreme weather conditions, also
create business opportunities for Boskalis due to the growing need
for coastal defense and riverbank protection. Furthermore the
growing demand for sustainable energy in the form of offshore wind
farms offers ample opportunities for our transport and installation
services. While the long-term trends remain positive, the
opportunities and projects are not manifesting themselves across
the board in the short term. Boskalis is dynamic in adapting its
activities in response to the various developments, with both
growth opportunities and the need to phase out being considered in
conjunction.
Boskalis will continue to focus on market segments
that show structural growth in the longer term and also provide
short-term opportunities: Ports, Land reclamation, Energy (oil, gas
and wind) and Climate.
The Corporate Business Plan for 2017-2019 and the
strategy section in the 2018 Annual Report take a detailed look at
the development of our business. In the past year we took further
steps in the selective expansion of the company. Our position in
Offshore Wind was considerably strengthened with the commissioning
of the crane vessel Bokalift 1. After a busy year installing
foundations for offshore wind turbines in 2019 the vessel will also
be deployed for the decommissioning of offshore platforms. Our
market position in Offshore Installation & Intervention was
recently reinforced with the addition of a modern construction
support vessel, the Boka Falcon. In terms of further growth
opportunities the Saudi Aramco Long Term Agreement, a framework
agreement with a duration of six years, offers great
perspectives.
In early 2019 we took an important step in
expanding our survey activities with the acquisition of a majority
stake in Horizon, the leading survey company in the Middle East.
The survey activities (Gardline) acquired in mid-2017 will be
further strengthened with the purchase of a new vessel which will
be converted into a geophysical survey vessel. In 2019 we will
reinforce our cable-laying activities with the planned acquisition
of Bohlen & Doyen offshore. In addition at Dredging the
mega-cutter Helios that was taken into service in mid-2017 was
further optimized on the project in Duqm, resulting in record
production levels. The construction of the new sister vessel Krios
is on schedule with delivery expected in mid-2020.
Driven by our strategy, which is focused on
value-adding assets, last year we decided to terminate the low-end
transport activities and phase them out over a period of 18 months.
Such commodity activities are not consistent with Boskalis'
strategy, which is aimed at a position high in the value chain.
Also, 2018 saw a reorientation of the long-term strategy for the
harbor towage activities. In the case of the Saam Smit Towage joint
venture this resulted in the intention to sell our stake to our
partner SAAM and at Kotug Smit Towage in the planned sale of the
entire joint venture to Boluda.
Outlook
The market picture for 2019 is not fundamentally
different from 2018. With a limited recovery in the prospective
volume of work, prices and margins will remain under
pressure.
At Dredging & Inland Infra we see a reasonable volume of work
in the market in the short term. The emphasis for Boskalis is 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 utilized in 2019.
The picture for the Offshore Energy market has not changed. In the
short term transport and diving will be largely dependent on the
competitive spot market. Survey is expected to have another good
year with further growth, partly thanks to the addition of Horizon.
For the contracting activities we expect the projects in the order
book to result in a reasonable year.
The planned sale of our stakes in the Towage activities of Saam
Smit Towage and Kotug Smit Towage will lead to a lower contribution
to the result. Market volumes at the other towage joint ventures
are stable.
The project-based nature of a significant part of
our activities, in addition to the uncertain market conditions,
makes it difficult to provide a specific quantitative forecast with
regard to the 2019 full-year result early on in the year. However,
expectations are that while EBITDA levels will be stable, exceeding
the 2018 net operating profit will be a challenge.
Capital expenditure in 2019 is expected to be
around EUR 265 million, including the intended Bohlen & Doyen
offshore asset transaction, however excluding acquisitions, and
will be financed from the company's own cash flow. Boskalis has a
very sound financial position and comfortably meets its financial
covenants.
Share repurchase program
Early February 2019 Boskalis announced its
intention to launch a share buyback program, under which the
company intends to invest EUR 100 million in repurchasing its own
shares. A press release announcing the actual start date and
details of the program will be issued in the near future.
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, while pursuing a stable long-term
development of dividend. 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.
Given the robust balance sheet in setting the
amount of the dividend for 2018 it was decided to adjust the net
result for the extraordinary charges. At current share price levels
the distribution of (part of) the dividend in shares and the
resulting dilution is considered undesirable. Boskalis will
therefore propose to the Annual General Meeting of Shareholders on
8 May 2019 that a dividend of EUR 0.50 per share be distributed
fully in cash, equal to nearly 80% of the net operating profit. The
dividend will be made payable from 20 May 2019.
>>> click
here for the full version of the 2018 financial review
including all the
financial details <<<
KEY FIGURES |
2018 |
2017 |
(in EUR million) |
|
|
Revenue |
2,570 |
2,343 |
EBITDA |
353.6 |
436.6 |
Net
result from JVs and associates |
28.4 |
31.0 |
Operating
result |
119.0 |
185.0 |
Extraordinary charges pre tax |
519.5 |
- |
EBIT |
-400.5 |
185.0 |
Net
operating profit (net profit adjusted for extraordinary charges
after tax) |
82.8 |
150.5 |
Net
profit (loss) |
-435.9 |
150.5 |
Dividend
(proposal) per share (in EUR) |
0.50 |
1.00 |
|
|
|
|
End 2018 |
End 2017 |
Order book |
4,292 |
3,495 |
Our share in the net result of
joint ventures and associates is included in
EBIT(DA).
2018 EBITDA and the Net result from joint ventures
and associates are presented excluding impairments and
extraordinary charges.
Live webcast
The Board of Management of Royal Boskalis
Westminster N.V. will comment on the 2018 full-year results at the
analysts' meeting (11.30 am - 12.30 pm CET) on 7 March 2019. This
meeting can be followed by means of a live audio webcast, 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 2018 and its Corporate Social Responsibility
(CSR) Report 2018 today, 7 March. The reports, which are only
published in English, will be made available in the course of the
day on www.boskalis.com.
2019 |
FINANCIAL AGENDA |
7
March |
Publication of 2018 annual results |
8
May |
Trading
update on first quarter of 2019 |
8
May |
Annual
General Meeting of Shareholders |
10
May |
Ex-dividend date |
13
May |
Record
date for dividend entitlement (after market close) |
20
May |
Date of
dividend payment |
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 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 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.
Annual Review
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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