Vopak has released its highlights for the third quarter of 2014, reporting an increased EBITDA and commenting on its recent project acquisitions and expansions since conducting a business review in July of this year:
‘EBITDA – excluding exceptional items – increased by 9% to €202 million
(Q3 2013: €186 million).
EBIT – excluding exceptional items- increased by 7% to €142 million
(Q3 2013: €132 million).
Earnings per share – excluding exceptional items – increased by 16% to €0.65 (Q3 2013: €0.56). Earnings per share – excluding exceptional items – year to date decreased by 6%.
Year to date EBITDA – excluding exceptional items – amounts to €568 million and is in line with 2013 results (YTD 2013: €570 million).
Year to date net cash flow from operating activities increased by 13% to €467 million (YTD 2013: €415 million).
During Q3 2014, exceptional losses of €33 million (Q3 2013: nil) were recognised due to impairments (€29 million) and organisational alignments (€4 million), following the actions taken after the business review publication on 2 July 2014.
Outlook – excluding exceptional items:
Whilst we expect our Q4 result to be lower than our Q3 result we raise our outlook and expect EBITDA – excluding exceptional items – for the year 2014 to exceed €740 million.
New projects could initially weigh on the results due to the impact of full operating expenses and a possible phased build-up of revenues. Projects under development add 5.0 million m3 of storage capacity in the period up to and including 2017.
The total investment for Vopak and partners in expansion projects under construction is approximately €1.7 billion, of which Vopak’s total remaining cash spend is around €0.2 billion.
Eelco Hoekstra, chairman of the executive board and CEO of Vopak, says:
“Although the increase of the Q3 Group Operating Profit and EBITDA – excluding exceptional items – is encouraging, our business climate remains challenging and competitive. Most of our terminals operated in robust product market environments and continued to generate steady results. The higher Q3 result was amongst others caused by new projects such as the acquisition of Canterm and expansions at Penjuru and Lanshan. We also note cyclical developments like the softening of the Euro and a contango situation in the oil price, which supported the demand for crude storage in Rotterdam. We experienced better performance of our hub terminals in Singapore and Houston. Geopolitical uncertainties continue to make it difficult to predict economic developments and the impact on our future results.
The outcome of our business review as announced on 2 July 2014 provides a clear guidance for the execution of our strategy. The alignment of our organisation is diligently executed around the world. We focus on enhancing the risk return profile of our global network through maximum attention to safety and customer service while lowering our overall cost base and increasing our free cash flow generation. The announced divestment programme of around 15 primarily smaller terminals has started and with respect to the sustaining and improvement capital expenditure reduction plans, we notice encouraging progress. We sharpened the focus in our business development activities and allocate capital only to the defined strategic terminal portfolio criteria.
We are well positioned to strengthen our global terminal network to long-term market trends along the major trade routes, facilitating trade flows within regions and across continents. Yet, we are realistic about the challenges of the current business climate. We will maintain our strategic focus on generating increased net results and free cash flow, while creating long-term value for our stakeholders.”‘