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Vopak: Modest improvement group operating profit of core activitiesRotterdam, the Netherlands, May 13, 2004
Group operating profit (EBIT) for the first quarter of 2004 of Koninklijke Vopak N.V. (Royal Vopak) amounted to EUR 35.8 million (first quarter 2003: EUR 38.2 million). Group operating profit from core business excluding extraordinary income and expense amounted to EUR 34.1 million for the first quarter of 2004, an increase of 4% on the comparable figure for 2003 of EUR 32.9 million. The fall in the US dollar and the Singapore dollar against the euro was more than offset by the recovery in the result of the Oil Europe, Middle East & Africa division, the improved results for Latin America and the increase in profit arising from investments in expansion. Thanks in part to these disposals, net debt at 31 March 2004 reduced further to EUR 495.6 million (31 December 2003: EUR 608.5 million). In Singapore construction will start this year on a fourth Vopak terminal at the Banyan sector on Jurong Island for completion at the end of 2005. This terminal will handle both oil products and chemicals and in the first phase an amount of EUR 60 million will be invested. Together with other projects the overall level of investments of Vopak for 2004 will amount to around EUR 200 million. Operating review by division The operating results of the Chemicals EMEA division produced a disappointing performance for the first quarter, especially by the Rotterdam terminals, resulting in EBIT of EUR 8.1 million for the first quarter of 2004 (EBIT for first quarter of 2003: EUR 8.9 million). As yet, there are no signs of a recovery in the storage market for chemicals in Western Europe. The reconstruction of the tank pit at the TTR terminal in Botlek, necessitated by the accident in January 2003, was completed in the second quarter of 2004. It is expected that the work will pay off in the second half of 2004 by contributing positively to the division’s results. The Oil EMEA division increased its EBIT to EUR 10.4 million (2003: EUR 8.2 million) partly through higher volumes at Rotterdam and at the participating interest in Tallinn, Estonia. Operating profit of the Asia division fell from EUR 14.1 million for the first quarter of 2003 to EUR 12.0 for the same period in 2004. The main cause was the fall in the US dollar and the Singapore dollar, as well as in the local currencies tied to them, against the euro by an average of around 15% for the year. The EBIT of the North America division for the first quarter of 2004 at EUR 3.8 million was also down on the EBIT of EUR 5.3 million for the same period in 2003 when measured in US dollars. The drop was mainly attributable to the terminals in Houston, where demand by the chemical industry showed no sign of increasing. The operating profit of the Latin America division at EUR 4.4 million for the first quarter of 2004 (first quarter of 2003: EUR 3.3 million) was significantly greater thanks to high capacity utilisation and throughput, and despite adverse exchange effects. The assumptions put forward at the time the 2003 results were announced on 8 March 2004 continue to apply. Although there is still no strong recovery in demand for Vopak’s services from the chemical industries of Western Europe and North America, expectations regarding developments in Latin America and for the storage and throughput of oil products in both Europe and Asia remain positive. Accordingly, Vopak is repeating its earlier forecast that, barring unforeseen circumstances, group operating profit from core activities will amount to at least EUR 150 million for 2004. Annexe: 1. Breakdown of group operating income Profile Vopak is organized by market regions and operates more than 70 tank terminals in 29 countries. 1. Breakdown of group operating income
2. Exchange rates in Euros
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