Royal Vopak: Interim Update Q1 2020
Highlights for Q1 2020 -excluding exceptional items-:
- EBITDA of EUR 200 million (Q1 2019: EUR 215 million pre-divestments). Adjusted for minor currency translation effects and the effect of the divestments of the terminals in Algeciras, Amsterdam and Hamburg (EUR 17 million decrease), EBITDA increased by EUR 3 million to EUR 200 million, reflecting resilient business performance including IMO 2020 converted capacity.
- Occupancy rate for subsidiaries of 84% (Q1 2019: 86%) reflected high levels of planned inspection and maintenance out-of-service capacity (1.6 million cbm), mainly in Rotterdam (Europoort and Botlek chemicals) and Singapore, whereas the recent contango developments in the oil markets are supportive for occupancy rate developments for the following quarters.
- Proportional occupancy rate of 86% (Q1 2019: 84%) included good performance of joint venture oil terminals and continued strong performance of our joint venture gas and industrial terminals.
- EBIT of EUR 127 million (Q1 2019: EUR 137 million pre-divestments).
- Return on capital employed (ROCE) of 11.5% (Q1 2019: 12.6%).
- Net profit attributable to holders of ordinary shares of EUR 83 million (Q1 2019: EUR 83 million) resulting in earnings per ordinary share (EPS) of EUR 0.65 (Q1 2019: EUR 0.65).
- Vopak’s balance sheet is robust and our liquidity position remained strong with EUR 175 million cash and cash equivalents and EUR 770 million remaining flexibility under the committed EUR 1 billion revolving credit facility with maturity date in 2023. The senior net debt to EBITDA ratio was 2.65 at the end of Q1 2020.
- Share buyback program to return EUR 100 million to shareholders is progressing with 20% completed at the end of Q1 2020.
- First quarter portfolio developments were the delivery of 235,000 cbm of new capacity from growth projects in Malaysia and Vietnam and the completion of the divestment of the terminal in Algeciras, Spain.
Impact of COVID-19 pandemic:
The pandemic spread of COVID-19 (Coronavirus) has a significant impact on all people and organizations around the world. Our main focus is on the health of the people working for our company around the world and to limit the spread of the Coronavirus, to manage the impact on our business and to assess the impact on the economy and society. Therefore we have put global and local measures into place to protect our employees, their families and our operations based on information provided by the World Health Organization, national and local health authorities. To date, we have observed a limited impact on our operations. Currently all our 66 terminals are operational. This may change going forward, as it is currently too early to assess the extent and nature of the full impact and future developments including the delays of projects under construction, general operating and market conditions as well as currency movements. Our focus in these circumstances is on the short term delivery and protection of long term value. Vopak plays an important role within society by storing vital products with care. We are doing our utmost during the COVID-19 pandemic to continue to fulfill this role in all our locations around the world.
Exceptional items Q1 2020:
- On 31 January 2020, Vopak completed the earlier announced divestment of its 100% shareholding in the terminal in Algeciras, Spain, generating a cash inflow of EUR 135 million. The recognized exceptional loss before taxation was EUR 1.7 million. This completed the divestment program of the terminals in Algeciras, Amsterdam and Hamburg with a total exceptional gain of EUR 200 million recognised in the periods 2019 and Q1 2020.
Subsequent events:
- On 20 April 2020, Vopak and Keppel Data Centres Holding Pte Ltd announced to have signed an MoU to conduct a feasibility study to investigate the commercial viability of establishing LNG and possibly hydrogen infrastructure for LNG-to-power infrastructure in Singapore, which will form part of the possible Floating Data Centre Park (FDCP) development.
- On 21 April 2020, Vopak announced its initial investment in the 50/50 joint venture Vopak Moda Houston terminal located in the Houston Ship Channel. The investment includes 46,000 cbm of various gas tanks and a new jetty for the storage and handling of chemical gases. The storage capacity has been fully rented out under long-term contracts and the new terminal is expected to be commissioned in phases beginning at the end of 2020 and to be completed in the second half of 2021.
Looking ahead:
- We reiterate our aim to grow EBITDA over time with new contributions from growth projects and IMO 2020 converted capacity and replace the EBITDA from divested terminals, subject to general market conditions and currency exchange movements. The effect of contango oil markets and the effect of COVID-19 on general economic and operating conditions will influence the performance.
- We will continue to invest in growth of our global terminal portfolio with growth investment for 2020 that could amount to EUR 300 million to EUR 500 million.
- Cost management continues in 2020 to compensate at least for annual inflation and will take into account current and developing market conditions.
- We are prepared to respond to different economic scenarios focused on revenues, cost and cash flows to deliver performance and protect long-term value.
For 2020 and beyond, we will keep storing vital products with care to make a meaningful contribution to a more sustainable society, enabled by our financial performance.
The analysts’ presentation will be given via an on-demand audio webcast on Vopak’s corporate website www.vopak.com, starting at 8:45 AM CEST on 21 April 2020.
For more information please contact:
Vopak Press: Liesbeth Lans - Manager External Communication,
Telephone: +31 (0)10 400 2777 | e-mail: global.communication@vopak.com
Vopak Analysts and Investors: Laurens de Graaf - Head of Investor Relations,
Telephone: +31 (0)10 400 2776 | e-mail: investor.relations@vopak.com
About Royal Vopak
Royal Vopak is the world’s leading independent tank storage company. We store vital products with care. With over 400 years of history and a focus on sustainability, we ensure safe, clean and efficient storage and handling of bulk liquid products and gases for our customers. By doing so, we enable the delivery of products that are vital to our economy and daily lives, ranging from chemicals, oils, gases and LNG to biofuels and vegoils. We are determined to develop key infrastructure solutions for the world’s changing energy systems, while simultaneously investing in digitalization and innovation. Vopak is listed on the Euronext Amsterdam and is headquartered in Rotterdam, the Netherlands. Including our joint ventures and associates, we employ an international workforce of over 5,500 people. As of 21 April 2020, Vopak operates 66 terminals in 23 countries with a combined storage capacity of 34.3 million cbm. For more information, please visit vopak.com.
This press release contains inside information as meant in clause 7 of the Market Abuse Regulation. The content of this report has not been audited or reviewed by an external auditor