Tue 27 Apr 2010, 12:56 GMT

Vopak operating profit up 28 percent


Terminal operator posts growth in operating profit excluding exceptional items in Q1 2010.



Tank storage operator Vopak has announced that group operating profit excluding exceptional items increased by 28 percent during the first quarter of 2010.

Operating profit excluding exceptional items rose to EUR 109.7 million, up from EUR 85.6 million during the corresponding period last year.

Group operating profit before depreciation and amortization (EBITDA) rose by 26 percent to EUR 145.4 million, compared to EUR 115.6 million during the first three months of 2008.

Meanwhile, group operating profit (EBIT) jumped 20 percent from EUR 91.2 million to EUR 109.6 million over the same period.

Vopak said all divisions had contributed to the profit increase, which was the result of a combination of improved market circumstances, storage capacity expansions and efficiency improvement programs.

During a twelve month period, worldwide capacity increased by 1.0 million cubic metres (cbm) from 27.4 million cbm at the end of March 2009 to 28.4 million cbm by the end of March 2010.

The occupancy rate was 93 percent in the first quarter of 2010 - a slight decrease when compared to the 95 percent occupancy achieved during the first quarter of 2009.

In the first quarter of 2010, Vopak had an increased outage of tanks in certain locations as a result of an intensified tank inspection program, as well as lower initial occupancy rates for some of the recently commissioned new tank capacity for the storage of chemical and biofuels products in Asia and Europe.

Commenting on the results, John Paul Broeders, Chairman of the Executive Board of Royal Vopak said: ‘Our tank terminals fulfill a strategic role in the supply chains of our customers. Our strategically located tank terminal infrastructure supports the physical transportation of the required bulk liquid products to the right markets. The healthy demand for tank storage services, our capacity expansions and efficiency improvement programs led to an increased EBITDA of EUR 145 million in the first quarter of 2010. We experience a robust demand for oil storage services, based on the world-wide imbalances between production and consumption and the increasing number of specifications of oil products.

"Our total worldwide storage capacity has increased to 28.4 million cubic meter. The execution of the expansion plans that are currently under construction is progressing well. Furthermore, a capacity expansion of 606,000 cubic meter in Fujairah was recently announced, while our projects pipeline remains encouraging."

Main events: Q1 2010

During the first quarter of 2010, Vopak announced that it had decided to expand its storage terminal for oil products in the Port of Amsterdam, where construction started in 2009. The 620,000 cbm of storage capacity provided by phase 1, which is already under construction, will be increased by a further 570,000 cbm. After the phased completion of the terminal between 2011 and 2012, total storage capacity will be approximately 1.2 million cbm.

Main events after 31 March 2010

On 12 April 2010 the first independent import and distribution terminal for oil products in Jakarta, Indonesia was opened. Vopak Terminal Jakarta has a total storage capacity of 250,800 cbm and is a Joint Venture between Vopak and PT AKR Corporindo Tbk.

Vopak Horizon Fujairah decided to expand its terminal in the United Arab Emirates by 606,000 cbm to meet market demand. The total storage capacity of Vopak Horizon Fujairah will be more than 2.1 million cbm after completion of the expansion in the first quarter of 2012.

Outlook

Vopak said projects currently under construction will add 3.6 million cubic metres of storage capacity in the years 2010, 2011 and 2012.

The total investment for Vopak and partners in these projects involves a capital expenditure of around EUR 1.7 billion, of which Vopak’s total remaining cash spend will be approximately EUR 0.3 billion.

In 2010 Vopak expects group operating profit before depreciation and amortization (EBITDA) to be at least EUR 560 million. Although the expected EBITDA growth will contribute positively to the Earnings Per Share (EPS) development in 2010, the completed long-term financing activities in 2009 will weigh on the EPS development due to the increase in outstanding shares and higher financing costs, Vopak said.

Based on its current growth strategy, Vopak said is well positioned to realize a group operating profit before depreciation and amortization (EBITDA) of between EUR 625-700 million in 2012.


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