Leading terminal operator
Royal Vopak has posted a first quarter group operating profit (excluding exceptional items) of EUR 109.5 million, compared to EUR 109.7 million during the corresponding period in 2010.
The operating profit for the period included a currency translation gain of EUR 5.1 million. The net result of joint ventures rose by 20% to EUR 21.0 million (Q1 2010: EUR 17.5 million).
A total exceptional result of EUR 127.8 million was recognized during the first quarter of 2011, which is mainly due to the sale of Vopak’s 20% equity stake in Vopak Terminal Bahamas (EUR 111.5 million) and the release of a tax provision related to the distribution of the results of our joint venture in Estonia.
The occupancy rate for Vopak was 92% in the first quarter of 2011 - a slight decrease compared to the 93% occupancy in the first quarter of 2010.
Commenting on the results,
Eelco Hoekstra, Chairman of the Executive Board of Royal Vopak, said: "The healthy demand for tank storage services and our capacity expansions led to an EBITDA excluding exceptionals of EUR 148 million in the first quarter of 2011. Amongst others the sale of Vopak Terminal Bahamas in the first quarter contributed to a total exceptional gain of EUR 128 mln. Our strategically located tank terminal infrastructure supports the physical transportation of the required bulk liquid products to the right markets.
"We are experiencing a robust demand for oil storage services and the developments in the demand for storage of chemicals are encouraging. However the regulatory uncertainties in the biofuels segment results amongst others in volatility of demand and shorter duration of contracts reflected by lower occupancy rates at certain terminals, which is adversely affecting the growth of our current results."
Market Outlook
Projects under construction will add 4.5 million cbm of storage capacity in the years 2011 and 2012. The total investment for Vopak and partners in expansion projects involves capital expenditure of some EUR 1.9 billion, of which Vopak’s total remaining cash spend will be some EUR 0.3 billion. The completion of these expansion projects will result in a worldwide storage capacity of 29.8 million cbm as per end of 2012.
For 2011, Vopak expects a group operating profit before depreciation and amortization (EBITDA) of between EUR 600 - 640 million (2010: EUR 598.2 million), assuming no further appreciation of the Euro against applicable other currencies.
Based on its growth strategy Vopak says it is well positioned to realize a group operating profit before depreciation and amortization (EBITDA) of between EUR 725 - 800 million in 2013.
"We expect an EBITDA for 2011 of between EUR 600 mln and EUR 640 mln. With the current outlook for 2011 and 4.5 million cbm of storage capacity under construction we remain well positioned to realize an EBITDA of between EUR 725-800 million in 2013," Hoekstra said.
Review by division for the first quarter of 2011 (excluding exceptional items)
OEMEA (Oil Europe, Middle East & Africa) achieved an operating profit of EUR 35.8 million (Q1 2010: EUR 37.6 million), representing a decrease of 5%. The occupancy rate in the first quarter of 2011 decreased to 93% from 95% in the first quarter of 2010. The decrease in the results was said to be mainly caused by an intensified maintenance and inspection program at Vopak's terminals in the Netherlands (on average a 3% higher level of storage capacity out of service compared to last year) and the demolition of the Waltershof terminal in Hamburg (Germany) last year (94.000 cbm less capacity compared to Q1 2010), which were partly offset by better results for Vopak's joint ventures.
The operating profit of the Asia division rose by 29% to EUR 47.4 million (Q1 2010: EUR 36.7 million), partly supported by the results generated by new storage capacity, which has come on stream in Singapore and China over the last year, and higher occupancy rates. The occupancy rate in the first quarter of 2011 increased to 94% (Q1 2010: 92%).
In the North America division the first quarter operating profit decreased by 26% to EUR 9.8 million (Q1 2010: EUR 13.3 million). The occupancy rate in the first quarter of 2011 decreased to 91% from 96% in the first quarter of 2010. The decrease in the result was mainly caused by restrictions in rail car handling at Vopak's Deer Park facility as a consequence of a dispute with its neighboring competitor, the divestment of Vopak Terminal Bahamas, an intensified maintenance program (on average a 2% higher level of storage capacity out of service compared to last year), and the continued uncertainties in the market for storage and handling of biodiesel.
In the Latin America division operating profit remained stable at EUR 7.3 million, including a currency translation gain of EUR 0.5 million, which was offset by higher business development costs. The occupancy rate in the first quarter of 2011 remained stable at 91% (Q1 2010: 91%).
