Mon 3 Mar 2014, 09:08 GMT

Vopak net profit falls 10% in 2013


Chairman says he is 'convinced' Vopak is a stronger company than a year ago despite first earnings decrease in ten years.



Terminal operator Royal Vopak has announced that net profit attributable to ordinary shareholders decreased by 10% to EUR 312 million in 2013 from EUR 347 million the previous year. Earnings per ordinary share (EPS) also decreased by 10% to EUR 2.45, down from EUR 2.73 in 2012.

Group operating profit before depreciation and amortization (EBITDA) decreased by 2% to EUR 753 million (EUR 768 million in 2012), in line with the earlier indicated outlook of around EUR 750 million. Adjusted for adverse currency translation effects (EUR 20 million), EBITDA increased by 1%.

Group operating profit (EBIT) decreased by 5% to EUR 536 million, down from EUR 566 million in 2012. Adjusted for adverse currency translation effects (EUR 15 million) the decrease was 3%.

A dividend of EUR 0.90 (2012: EUR 0.88) per ordinary share, payable in cash, will be proposed to the Annual General Meeting (AGM) on 23 April 2014.

As a result of growth projects (1.0 million cbm), partly offset by divestments (0.4 million cbm), Vopak’s worldwide storage capacity increased during 2013 by 0.6 million cbm to 30.5 million cbm.

Commenting on the results, Eelco Hoekstra, Chairman of the Executive Board of Royal Vopak, said: "I am convinced that Vopak is a stronger company than a year ago. But for the first time in ten years, Vopak did not grow its earnings. In the storage sector, we saw continued increased competition due to capacity expansions in certain markets. Additionally, some major construction projects will take longer than anticipated to finalize. We were also adversely affected by changing regulations on biofuels, by the appreciation of the euro against the US dollar and Asian currencies, and by higher pension charges. As a result, we did not realize our ambition to exceed our record 2012 financial results. In line with our revised outlook, the EBITDA for 2013 of EUR 753 million, ended up slightly lower compared to EUR 768 million in 2012.

"Yet, all in all, we maintained a very solid earnings profile and continued to make significant progress in essential areas such as safety, service delivery and market knowledge. This enabled us to support our leading position in the global market. The strength of our operating model was reaffirmed in many of our product-market combinations. Our performance in biofuels was mixed. But we saw a steady performance in chemicals across all regions. We had a solid performance in industrial terminals and LNG. And our performance in oil storage business was robust, except for the Netherlands and Los Angeles (US), where we experienced a more volatile demand.

"Our strategy over 2013 focused on two priorities. First, we continued to align Vopak’s terminal network with long-term developments in the energy and chemicals markets. Accordingly, over the past year we divested a number of terminals, including in Xiamen (China), in Chile and in Ecuador. We also added new capacity in Banyan (Singapore), in Algeciras (Spain) and in Tianjin (China), among other locations. Second, we kept focusing on improving our competitive position in order to provide our clients with the safest, most sustainable and most cost efficient services. This contributed to the healthy EBITDA margins. To further improve service, we upgraded our terminals in several locations, by adding additional jetties and removing bottlenecks in our infrastructure. On safety, the strong improvement of Vopak’s 2013 overall results was, to our deep regret, tarnished by a contractor fatality in China.

"Looking ahead, we will stick to our main priorities within our strategy. We will continue aligning our global terminal network with market dynamics and we will further strengthen our competitive position by improving the service at the terminals. We expect that the current business climate will remain largely unchanged in 2014, with continuing regional divergences. Therefore, exceeding the record EBITDA of 2012 will also remain a challenge in 2014. But we remain confident in the long-term outlook for our business. In addition to our 30 million cubic metres of storage capacity, we are developing another 6.5 million cbm. And, while we keep looking at value-added divestments, we see plenty of opportunities for further profitable expansions."


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