Tank storage operator
Vopak has announced that net profit -excluding exceptional items- rose by 20 percent to EUR 242.7 million, up from EUR 202.1 million the previous year. The Dutch group said that net profit rose as a result of the higher group operating profit, partly offset by higher financing costs in the period.
Group operating profit excluding exceptional items rose by 20% to EUR 385.3 million, compared to EUR 320.4 million in 2008. This improvement was said to be the result of the continued strategic focus of all divisions on growth in storage capacity at existing terminals, the development of new terminals, the additional demand of customers and improvements in operational efficiency.
Group operating profit, before depreciation and amortization (EBITDA) including the net result of joint ventures and associates and excluding exceptional items, rose by 20 percent to EUR 513.4 million (2008: EUR 429.3 million).
Commenting on the Group's results,
John Paul Broeders, Chairman of the Executive Board of Royal Vopak, said: ‘In the economic turbulence of 2009 we experienced a healthy demand for tank storage services. We achieved encouraging results and continue to realize our growth ambitions. A significant part of our tank storage network facilitates the transportation of refined oil products, which is characterized by robust demand for tank storage services and to a large extent independent from the more speculative trading environment. The demand for storage of chemical products is however more volatile. Especially in Europe, where demand for chemicals storage decreased, we have focused on storing alternative products such as biofuels and oil products at some of our chemicals terminals.
"The structural geographical imbalance between the production and consumption of oil and chemical products, the increasing variety of specifications, the demand for environmentally friendlier fuels and the liberalization of previously closed economies continue to lead to increasing demand for tank storage. This encourages us to look for further expansion opportunities to facilitate the worldwide and regional logistic flows of oil and chemical products. Therefore we have extended our financial capabilities and flexibility through new financing programs."
"Based on our growth strategy Vopak is well positioned to realize a Group operating profit before depreciation and amortization (EBITDA) between EUR 625-700 million in 2012," Broeders predicted.
Storage capacity developments
Vopak’s expansion program led to growth in worldwide storage capacity by 1.2 million cubic meters (cbm), to reach a total of 28.3 million cbm as per year-end 2009. During 2009, new storage capacity was commissioned in, among others, Singapore, the Bahamas, Rotterdam Botlek (the Netherlands), Tallinn (Estonia), Antwerp (Belgium), Teesside (UK) and Vlaardingen (the Netherlands). Furthermore, a terminal of 345,600 cbm of storage capacity in Basle (Switzerland) has been divested. This river-based inland terminal had a limited strategic fit with Vopak’s global network strategy.
A total of 3.0 million cbm of storage capacity under construction will be added in the years 2010, 2011 and 2012. Major projects include expansion at existing terminals like Maasvlakte Oil Terminal (MOT) in Rotterdam (the Netherlands) of 360,000 cbm, Zhangjiagang (China) 177,000 cbm, Barcelona (Spain) 155,000 cbm and Europoort (the Netherlands) 160,000 cbm. New terminals are under construction in Amsterdam Westpoort (the Netherlands) 1,190,000 cbm, Gate (LNG, Rotterdam, the Netherlands) 540,000 cbm and Jakarta (Indonesia) 250,000 cbm.
In 2009 Vopak’s estimated market share in global independent tank storage decreased from 12.0% in 2008 to 11.6%. A large part of the capacity growth is in China, where the oil market is not easily accessible for non-Chinese independent tank storage companies. Vopak’s focus is on growing in selected strategic locations.
Future outlook
Projects under construction will add 3.0 million cbm of storage capacity in the years 2010, 2011 and 2012. The total investment for Vopak and partners in these projects involves capital expenditure of some EUR 1.6 billion, of which Vopak’s total remaining cash spend will be some EUR 0.4 billion.
For 2010 Vopak expects Group operating profit before depreciation and amortization (EBITDA) to grow between 5-10 percent. Although the expected EBITDA growth will contribute positively to the EPS development in 2010, the completed long-term financing activitities in 2009 will weigh on the earnings per ordinary share (EPS) development due to the increase in outstanding shares and higher financing costs.
Based on its growth strategy Vopak says it is well positioned to realize a Group operating profit before depreciation and amortization (EBITDA) between EUR 625-700 million in 2012.
