Vopak reports drop in first half earnings, announces expansion projects
Royal Vopak has reported its first half revenue and profits fell as a result of a less favourable oil market structure.
The company reported an EBITDA of €371m in the first half, down from €394m in the same period last year.
It also reported a dip in occupancy rate to 86% (91% in 1H last year) explained by a lower rented capacity mainly at the oil hub terminals caused by a less favourable oil market structure. Other product-market segments showed continued stable demand for storage services.
Net profit attributable to holders of ordinary shares was reported at €140m, down from €150m in the first half of 2017.
Vopak’s worldwide storage capacity on a 100% basis was 36 million cbm as of the end of the first half year of 2018. Projects currently under development will add 3.2 million cbm of storage capacity to its global network in 2019. It is also planning to conduct a strategic review and test the market value of its terminals in Algeciras, Amsterdam, Hamburg and Tallinn.
On 20 July, Vopak and Engro Corporation announced the signing of a Share Purchase Agreement in which Vopak will acquire a 29% share in Engro Elengy Terminal Pakistan Ltd. (EETPL). This LNG import facility, located in Port Qasim, consists of an LNG jetty and high pressure gas pipeline. EETPL holds a 15 year Floating Storage and Regasification Unit (FSRU) time charter (capacity of 151,000 cbm). The acquisition is subject to certain conditions, including customary regulatory and shareholder approvals, and closing is anticipated to take place in Q4 2018.
Expansion
Today, Vopak has announced that it will expand its chemical terminal in Merak, Indonesia, with 50,000 cbm to 131,000 cbm. Merak is the main chemical import port of Indonesia and Merak has the highest concentration of petrochemical facilities. The expansion is expected to be commissioned in Q1 2020.
Vopak has also announced plans to invest in its Europoort terminal in Rotterdam, the Netherlands, to support 0.5% low sulphur fuel oil bunkering. This investment is supported by customer commitments and will be completed in the second half year of 2019.
Vopak will also further strengthen its global chemical storage positions. A new jetty will be constructed at Vopak Terminal Linkeroever in Antwerp, Belgium, enabling planned future growth. Furthermore, a major service improvement project will commence at Vopak Terminal Penjuru in Singapore, to service the chemical market in Singapore.
Royal Vopak Chief Executive Officer Eelco Hoekstra, commented: “In total, we currently have more than 3 million cbm under construction. We find this the natural moment for a strategic review and test the market value of our terminals in Algeciras, Amsterdam, Hamburg and Tallinn. This review is fully in line with the focus on growing our portfolio with the four strategic terminal types (major hubs, gas & LNG, industrial terminals, distribution in major markets).
“In the second half of the year, we will maintain our focus on both short-term performance and long-term value creation for all stakeholders and seize opportunities that are being created in today’s market. This enables us to continue storing vital products with care.”
Given the current 3.2 million cbm expansion program for 2019 with high commercial coverage, in conjunction with the cost efficiency delivery, Vopak has the potential to significantly improve the 2019 EBITDA, subject to market conditions and currency exchange movements.
For more information, visit: www.vopak.com
17th August 2018
