Vopak’s 2002 results match expectations

Vopak’s 2002 results match expectations
Net profit for 2002 of EUR 111.3 million (2001 pro forma: EUR 145.8 million)
Proposed dividend of EUR 0.50 per ordinary share (2001: no dividend)
Funding position improves according to plan. Net funding position reduced to EUR 763.5m.
Rotterdam, the Netherlands, March 6th 2003

		Pro forma
In EUR millions	2002	2001 *	D%
Net turnover	796.2	810.5	-1.8
Operating profit before depreciation and amortisation (EBITDA)	308.6	348.9	-11.6
Operating profit (EBIT)	199.7	236.8**	-15.7
Net profit	111.3	145.8	- 23.7
Net profit for ordinary shareholders***	88.3	107.4	-17.8
Net profit per ordinary share***	€ 1.62	€ 2.12	- 23.6
ROCE	12.6%	14.2%
Interest cover ratio (EBITDA : net interest)	5.3	4.5
Net funding position: EBITDA	2.6	3.1

*Excluding the chemical distribution activities, split off in 2002
**Including EUR 26.0m from divested companies (Broström, Theodora tankers, Dry cargo terminals)
***Before extraordinary items

Chairman’s statement

Carel van den Driest, Chairman of the Executive Board of Koninklijke Vopak N.V. (Royal Vopak):

’The year 2002 was a period of radical change for the company. In the first half of the year we decided to split off the chemical distribution activities. Since mid-2002, Vopak has continued as a market-focused logistic services provider, concentrating on tank storage and related logistic services for the oil and chemical industries.

The decline in world economic growth also impacted Vopak’s results for 2002. In particular, it caused a slump in demand for our services by the chemical industry. At the same time, we had to face cost increases, such as insurance and environmental costs, that could not be passed on in our rates. The results of our European chemicals division suffered the most, being below those of 2001.

Fortunately, we were able to improve our results once again in the two growth regions of Asia and Latin America. Further expansion of activities in these regions is one of our priorities.

Turning to the oil markets, we benefited in 2002 from the additional demand in Asia for fuel oil and the surplus of this commodity in Europe. Our facilities also provide intermediate storage points for the transport of gasoline to North America.

Our funding position showed considerable improvement in 2002 as part of our objective to reduce net debt to EUR 700 million or less.

Attention to safety, health and the environment remains as important as ever.

Through increased attention to cost control and by utilising our strong worldwide network of terminals, highly trained personnel, long-term relationships with industrial partners and a strict quality policy, we are in an excellent position to improve results and profitability over the next few years.

The state of the global economy is highly unpredictable and the impact of this on our markets cannot be easily anticipated as yet. For this reason, it is not possible to forecast the expected result for 2003.’

Market conditions

The demand for tank terminal services held up well. The decline in the result of the European chemicals division was offset by growth in Asia and Latin America.

Regarding the other logistics services, the result from warehousing in the Benelux declined strongly.

For the coastal shipping and inland barging of chemicals, the result was virtually the same as in 2001. Although the poor start during the early months of 2002 left its mark, the lower level of costs in the second half of the year enabled the result to recover.

The oil markets showed a high throughput, attributable to the interregional transport of fuel oil to Asia via our terminals in Tallinn and Rotterdam.

Improved funding position

Following the split off, Vopak’s net funding position at 30 June 2002 (excluding guarantees) was EUR 820 million. At year-end 2002, this had been cut to EUR 763.5 million. The objective remains to reduce this further to EUR 700 million or less in 2003. The proceeds of EUR 37 million received in January 2003 on the sale of the participating interest in COSM, in the UK, contribute to this objective.

Exceptional items in operating profit

In 2002, the investment results of Vopak’s pension fund showed a loss. Vopak made an additional contribution to the fund of EUR 10 million and granted it a subordinated loan of another EUR 10 million. Anticipating the implementation of IAS for all financial statements in 2005, the pension liabilities and corresponding assets are being carried as from 1 January 2002 in accordance with IAS 19, corresponding to the Dutch draft guideline 271 RJ for annual reporting (Effect: lower pension charge at EUR 19.5 million)

In addition, capitalised expenses of the ERP system were rationalised in 2002, which produced a non-recurring charge to the operating profit of EUR 9 million.

In aggregate, the exceptional items made a small positive contribution of EUR 0.5 million to the operating profit.

Extraordinary result

In 2002, extraordinary income of EUR 16.1 million was recognised. The most important item in this concerns extraordinary income of EUR 24.6 realised on the sale of the participating interest in COSM, in the UK. Extraordinary charges comprise reorganisation expenses of EUR 4.5 million, mainly for the head office, and EUR 3.9 million, representing split-off expenses less gains on the settlement of forward exchange transactions. There were also a few minor extraordinary income and expense items.

Number of shares outstanding

Weighted average number of shares outstanding:	54,518,700
Diluted weighted average number of shares outstanding:	54,518,700
At 31 December 2002, including own shares repurchased:	59,927,972
Number of financing preference shares outstanding:	25,400,000

Financial calendar

The Annual General Meeting will be held at the company’s office on Wednesday, 23 April 2003. Dividend will be made payable on 14 May 2003.

Results for the first half of 2003 will be published on 20 August 2003.

Profile

Vopak is the market leader for independent tank storage and related logistics services to the oil and chemical industries. The company operates an international network of 66 tank terminals in 26 countries with a combined capacity of approximately 19.4 million cubic metres. In addition, Vopak has at its disposal some 220 ocean-going tankers, coastal tankers and inland barges, more than 3,000 tank containers and a variety of strategically located logistic warehouses.

For further information:

Koninklijke Vopak N.V. (Royal Vopak)

Corporate Communication & Investor Relations

Bon Ellemeet

Telephone : + 31 (0)10 4002777

E-mail : corporate.communication@vopak.com

Web site : www.vopak.com

Enclosures:

Consolidated profit and loss account

Consolidated balance sheet

Consolidated cash flow statement

Notes to the results broken down by region

Details of participating interests

The slide-presentation to media & analysts will be placed on Vopak’s website at 11 a.m. today.

Annexe 1	Consolidated income statement***
					Before
			Pro forma**		split off
In EUR millions	31-12-2002		31-12-2001		31-12-2001
Net sales	796.2		810.5		5,639.7
Other operating income	1.1		4.2		4.2
Total operating income	797.3		814.7		5,643.9
Cost of sales					-3,877.3
Gross margin	797.3		814.7		1,766.6
Wages, salaries and social security charges	271.2		278.2		742.1
Depreciation	108.9		112.1		186.7
Other operating expenses	265.6		250.7		582.2
Total operating expenses	645.7		641.0		1,511.0
Operating income	151.6		173.7		255.6
Income of equity participations	48.1		63.1		62.8
Group operating income *	199.7		236.8		318.4
Net interest expense	-57.9		-78.0		-113.8
Income from ordinary activities before income taxes	141.8		158.8		204.6
Income taxes	-32.1		-35.0		-72.4
Income from ordinary activities after income taxes	109.7		123.8		132.2
Extraordinary income/(expense) after income taxes	16.1		31.5		-78.4
Consolidated net income	125.8		155.3		53.8
Third-party interests in consolidated income	-14.5		-9.5		-9.5
Net profit	111.3		145.8		44.3
Dividend on cumulative financing preference shares	-6.9		-6.9		-8.7
Net income for ordinary shareholders	104.4		138.9		35.6
*) including the following exceptional items
Additional contribution pension fund	-10.0
Movement pension costs as a result of change in accounting policies	19.5
Rationalisation of capitalised expenses ERP system	- 9.0
Total movements	0.5
Earnings per share (before extraordinary income)	1.62		2.12		2.25
Earnings per share (after amortization of goodwill)	1.91		2.75		0.70
**   unaudited
*** after proposed distribution of net income

Annexe 2	Consolidated financial statements
							Before
				Pro forma**			Split off
In EUR millions	31-12-2002			31-12-2001			31-12-2001
Intangible fixed assets	6.3			5.7			370.1
Property, plant and equipment	1,107.2			1,219.1			1,740.1
- Financial fixed assets	394.7			476.3			478.1
Total fixed assets		1,508.2			1,701.1			2,588.3
Inventories	4.5			3.8			479.3
Accounts receivable	272.5			296.0			1,047.5
Prepaid expenses and accrued income	24.5			33.5			57.6
Securities	11.6			12.7			12.7
Cash and cash equivalents	172.2			247.7			152.3
Total current assets		485.3			593.7			1,749.4
Amounts owed to banks	39.7			90.2			193.3
Current portion of long-term debt	71.1			94.5			106.4
Trade accounts and other accounts payable	250.0			347.6			1,176.6
Dividends	36.9			8.7			8.7
Total current liabilities		397.7			541.0			1,485.0
Current assets less current liabilities		87.6			52.7			264.4
Total assets less current liabilities		1,595.8			1,753.8			2,852.7
Long-term debt		824.9			1,090.1			1,400.0
Total provisions		240.2			266.8			389.0
Third-party interests	64.3			57.9			58.2
Stockholders’ equity	466.4			339.0			1,005.5
Group equity		530.7			396.9			1,063.7
Total		1,595.8			1,753.8			2,852.7

**UnauditedFinancial ratios

ROCE		12.6%			14.2%			10.8%
Current assets current liabilities		1.2			1.1			1.2
Net financing position : EBITDA		2.6			3.1			3.1
Interest cover ratio
(EBITDA : Net interest)		5.3			4.5			4.4

*Pro forma 2001 is incl. 170.8 m Univar N.V. related financing** unaudited

Annexe 3	Consolidated statement of cash flows
				Pro forma**			Before split-off
In EUR millions	31-12-2002			31-12-2001			31-12-2001
Net income	111.3			145.8			44.3
Adjustments for:
- Depreciation	108.9			112.1			186.7
- Write-down and value decrease	-			8.0			83.0
- Movements in provisions	-5.5			29.4			-2.4
- Movements in third-party interests	13.7			8.9			9.0
- Distributed income of equity participations	36.9			94.2			94.2
- Retained income of equity participations	-46.1			-59.3			-59.0
- Gain on sale of property, plant and equipment	-1.1			-4.4			-4.4
-Gain on sale of group companies
and unconsolidated participating interests	-30.7			-52.1			-52.1
Gross cash flow from operating activities	187.4			282.7			299.3
Movement in working capital (excluding cash and cash equivalents,
Short term credit and dividend)	-66.2			-35.9			94.0
Effect of changes in exchange rates	-10.7			-13.7			4.8
Net cash flow from/(used in) operating activities		110.5			233.1			398.1
Investments:
- Tangible fixed assets	-88.0			-95.0			-214.1
Acquisitions (including goodwill):
- Financial fixed assets	-26.2			-57.3			-58.1
- Group companies	-18.5			-72.2			-467.4
Total investments		-132.7			-224.5			-739.6
Disposals:
- Property, plant and equipment	19.8			23.6			50.5
- Financial fixed assets	95.7			43.1			43.1
- Group companies	16.1			126.0			126.0
Total disposals		131.6			192.7			219.6
Cash flow from investing activities		-1.1			-31.8			-520.0
Financing:
- Repayment of long-term debt	-416.6			-596.3			-1,211.5
- New long-term debt	308.2			857.8			1,396.7
- Net proceeds from share issues	73.8			-			-
- Declaration of options	-			5.7			9.3
- Effect split-off Univar N.V.	-			-387.3			-
- Net movements in short-term financing	-140.0			27.2			-6.5
- Dividend distributions	-6.9			-57.5			-74.2
Net cash flow from financing activities		-181.5			-150.4			113.8
Net cash flow		-72.1			50.9			-8.1
Exchange and translation differences		-3.2			20.0			2.5
Movements in cash and cash equivalents owing to consolidations and deconsolidations		-0.2			-3.2			42.0
(Decrease)/increase in cash and cash equivalents		-75.5			67.7			36.4

**Unaudited

Annexe 4 Notes to the balance sheet

Operating income by region

Chemicals Logistics Europe & Africa

In EUR millions	2002	2001	D%
Net sales	393.9	401.1	-1.8
Operating income before depreciation and amortisation (EBITDA)	107.9	135.5	-20.4
Operating income (EBIT)	51.8	74.6	-30.6
Average gross capital employed	672.7	699.1	-3.8
Return on Capital Employed	7.7%	10.7%

As a result of the decline in spot business in chemicals in Rotterdam and lower throughputs in warehousing activities, the net sales of this division decreased.

Higher costs in tank terminalling (amongst others due to higher insurance and environmental costs) could not be fully charged in the rates.

Results in shipping hardly changed compared to 2001 due to a recovery in the second half of last year.

Oil Logistics Europe & Middle East

In EUR millions	2002	2001	D%
Net sales	132.1	139.2	-5.1
Operating income before depreciation and amortisation (EBITDA)	70.5	75.1	-6.1
Operating income (EBIT)	57.8	62.6	-7.7
Average gross Capital Employed	138.7	132.7	+4.5
Return on Capital Employed	41.7%	47.2%

The decline in net sales is mainly the result of the divestment of part of the company-owned barging fleet.

In tank terminalling, high throughput and occupancy rate were realised in intermediate storage for export flows to Asia (fuel oil) and North America (gasoline). On the cost side, pension rates were up, as well as insurance and maintenance costs.

Logistics Asia

In EUR millions	2002	2001	D%
Net sales	104.1	89.4	+16.4
Operating income before depreciation and amortisation (EBITDA)	84.0	65.4	+28.4
Operating income (EBIT)	63.1	48.7	+29.6
Average gross Capital Employed	322.8	277.7	+16.2
Return on Capital Employed	19.5%	17.5%

The increase in net sales is the result of autonomous growth of the Singapore terminals, including the contribution of the terminal, which was acquired from GATX in 2001.

In addition, the financial position and results are mainly determined by the financial position and results of the company’s participations.

Logistics North America

In EUR millions	2002	2001	D%
Net sales	118.0	114.9	+2.7
Operating income before depreciation and amortisation (EBITDA)	39.8	40.5	-1.7
Operating income (EBIT)	27.1	28.0	-3.2
Average gross Capital Employed	206.6	226.2	-8.7
Return on Capital Employed	13.1%	12.4%

Despite the lingering economic situation, sales levels remain stable due to a strong contract position.

Logistics Latin America

In EUR millions	2002	2001	D%
Net sales	40.5	39.6	+2.3
Operating income before depreciation and amortisation (EBITDA)	20.6	20.0	+3.0
Operating income (EBIT)	15.6	15.2	+2.6
Average gross Capital Employed	97.0	104.3	-7.0
Return on Capital Employed	16.1%	14.6%

The termination of a contract with a producer’s terminal in Altamira, Mexico, could be counterbalanced by the simultaneous acquisition of a terminal in the same area. The negative currency effects were balanced by contracts based on USD dollar related rates.

Annexe 5 Details of participating interests:

Results participations in tankterminals (pro forma on 100% basis)

In EUR millions	2002	2001	D%
Net sales	294.3	252.4	+16.6
EBITDA	179.1	157.3	+13.9
EBIT	140.4	121.8	+15.3
Net income	100.6	79.1	+27.2
Interest cover ratio	11.8	9.6
Net financing position : EBITDA	1.2	1.8

Vopak share in net income of participations

Tank terminals	43.3	36.8	+17.7
Other activities	2.8	25.2*	-88.9
Total	46.1	62.0	-25.6
Interest	0.8	0.5
Other income	1.2	0.6
Income from equity participations	48.1	63.1	-23.8

Vopak share in net equity value participations

Tank terminals	158.3	165.8
Other activities	35.8	123.3
Total	194.1	289.1

* The contribution from Broström in 2001 was EUR 20.4 mln.

[END OF PRESS RELEASE]