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Vopak reports on HY1 2017
Highlights for HY1 2017:
- Results in the Netherlands are below expectations, the results for EMEA, Asia and LNG are in line with outlook, while the Americas results are above expectations
- Average occupancy rate for the period is 91% (HY1 2016: 94%)
- EBITDA -excluding exceptional items- decreased (6%) to EUR 394 million, adjusted for the divestments early 2016, the pro forma EBITDA decreased by 4%
- Total capacity of announced new growth projects amounts to 387,000 cbm. In addition, Vopak will expand Pengerang oil terminal in Malaysia with 430,000 cbm and Alemoa terminal in Brazil with 44,900 cbm
- Efficiency program to reduce Vopak's future cost base with at least EUR 25 million by 2019 is well underway; decisions are taken to further streamline the divisional structure
Exceptional items for HY1 2017:
- There were no material exceptional items in the first half of 2017. The large exceptional profit in the first half of 2016 related mainly to the divestment of the UK assets
- For 2017, we expect to realize an average occupancy rate of around 90% (2016: 93%). Taking into account the lower occupancy rates, additional costs related to investments in growth and technology, the missing contributions from the divested terminals early 2016 and the foreign currency exchange developments in 2017, we expect that the 2017 EBITDA will be 5-10% lower than the 2016 EBITDA (EUR 822 million)
- We are on track with the timely completion of the current projects under construction (3.2 million cbm), of which most are backed by commercial storage contracts, and the successful realization of the efficiency program
- Supported by solid operational cash flow generation, a strong balance sheet and sufficient financial flexibility, Vopak will continue its capital disciplined long-term growth journey, while maintaining on average a Cash Flow Return On Gross Assets after tax (CFROGA) between 9-11% for the total portfolio in the period 2017-2019
"Although our EBITDA is lower compared to last year, I am encouraged with the ongoing transition of our global portfolio. While focusing our business development efforts more on projects related to chemical and industrial terminals, and terminals facilitating the global gas markets, including our ambitions to strengthen our presence as a service provider in the LNG infrastructure market, we are still pursuing oil related opportunities in emerging countries.
HY1 2017 EBITDA -excluding exceptional items- of EUR 394 million reflects a positive market sentiment in the Americas and a stable business environment for our terminals in Asia and EMEA, while the market environment in the Netherlands has weakened compared to 2016.
Although we cannot influence the supply and demand of commodities in a business environment characterized by increasing competition, geopolitical developments and volatility in the energy and financial markets, we can influence the quality of our capital investments, lowering operating costs and improving our service. We continuously seek to improve our safety and sustainability performance, while stepping up the quality of our operations and increasing productivity, supported by the application of new technologies. This will help reduce Vopak's future cost base with at least EUR 25 million in the 2017-2019 period.
In order to support the successful realization of our 2019 ambitions, we have defined several actions throughout the various levels of the organization, from further streamlining the divisional structure of the company to simplifying processes, thereby improving the ease of doing business with Vopak.
The outcome of these efforts will help deliver better value for money to our customers, thereby strengthening our competitiveness.
The coming years will be another exciting period in which we want to further improve our leadership position and I believe that despite the lower results in 2017 the current profile of the company, taking into account the solid operational cash flow generation, strong balance sheet and sufficient financial flexibility, provides an excellent platform to continue our long-term focused capital disciplined growth journey."
We invite you to watch the full CEO video comment.
There will be an analyst presentation given via an on-demand audio webcast provided on Vopak's website www.vopak.com starting at 11.00 AM CET on 18 August 2017.
For more information, please contact:
Liesbeth Lans, Manager External Communication,
Telephone: +31 (0)10 4002777, e-mail: firstname.lastname@example.org
Vopak Analysts and investors
Anil Acardag, Manager Investor Relations,
Telephone: +31 (0)10 4002776, e-mail: email@example.com
This press release contains inside information as meant in clause 7 of the Market Abuse Regulation.
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