Vopak’s third quarter financial results reflect a ‘healthly demand’ for storage despite slow growth in advanced economies and weakening dynamics in emerging markets.
The world’s largest independent storage operator saw its EBITDA increase by 6% to €602 million as a result of higher occupancy rates and positive currency translation effects.
Overall, Vopak’s worldwide storage capacity increased by 300,000 m3 to 3.41 million m3 compared to the end of 2014.
Chairman of the executive board and CEO Eelco Hoekstra says: ‘Quarter three was charactised by continued slow growth in advanced economies while dynamics in emerging-markets further weakened and contango in the oil markets persisted.
‘In this business environment, Vopak succeeded to improve its commercial occupancy to 93% for the quarter. This reflects a healthy demand for storage in the majority of our terminals in all divisions even though we faced continued challenging economic and business developments at specific terminals in China and Singapore.
‘The financial effects of the realised divestments in the first half of 2015 and the initial negative financial contribution from the start up of new terminals mainly explains the lower results in this quarter compared to the previous two quarters.’
In a breakdown of business events, the company reports that on October 8 an accident at the Kawasaki site of its joint venture Nippon Vopak in Japan resulted in the death of an operator during tank operations.
The company adds: ‘We are deeply saddened by this tragic accident. Local authorities were informed and investigations on the root cause started.’
Overall revenues amounted to €1.035.6 million, which reflects a 5% increase compared to the first nine months of 2014.
This increase was predominantly driven by a higher average occupancy rate due to the positive sentiment in the market for oil products, primarily in the Netherlands. This was, to a large extent, offset by a decrease in revenues in China and Singapore due to lower occupancy rates, mainly due to a competitive and dynamic spot market and changes in the product mix.
For the 12 month period ending on September 30, 2015, Vopak’s worldwide storage capacity increased with 1.1 million m3 additional capacity.
The company’s Netherlands division saw a surge in profit of €9.7 million due to the positive sentiment in the storage market for oil products combined with the contribution fo the newly commissioned capacity at Vlissingen and Europoort.
In Europe, Middle East and Africa group operating profit increased by €9.5 million caused by improved results of the Swedish terminals, which were divested to Inter Terminals at the end of the first half of 2015.
In Asia operating profit was down by 3% due to lower revenues as a result of lower occupancy rates in China and Singapore.
The Americas saw the largest increase in profit of €9.8 million (22%) thanks to higher revenues as a result of improved performance at their terminals in the US.
Current development projects that are underway are expected to add 4.6 million m3 of storage capacity in the period up to and including 2019.
Hoekstra adds: ‘Looking forward, we remain cautious on the supply and demand scenarios for specific terminals supporting the Chinese distribution market.’