Vopak holds up well

UNDER CONTROL

RESULTS • VOPAK’S REVENUES AND PROFITS ARE HOLDING UP WELL, WITH LITTLE NEGATIVE IMPACT FROM THE COVID-19 CRISIS OR OIL MARKET VOLATILITY

VOPAK HAS REPORTED third quarter revenues of €297.0m, down 5 per cent compared to the same period 2019, reflecting the sale of some terminals over the course of the past 12 months. Excluding exceptional items, group EBITDA came in at €200.1m, only slightly below last year’s €202.4m. Moreover, overall tank occupancy continued to improve, reaching 91 per cent over the quarter as a whole, compared to 82 per cent in third quarter 2019, reflecting strong demand from oil markets and “robust” demand in other market segments.

Vopak says that, while the Covid-19 pandemic has had a significant impact on its people and it has put global and local measures in place to protects its employees, their families and the company’s operations, it has experienced a limited impact on business. “All our 66 terminals are operational and there have been no significant disruptions to business continuity,” it states.

“Vopak’s strategy is robust and unchanged. An effective control and governance structure to respond to the impact of the global pandemic, with continued decision-making to support business execution and well-being of people, has been put in place. Operational and financial performance, cash flows and our financial position have not been significantly affected. Our financial results reflect our resilient business performance. Timing of growth projects execution is affected by generic local lockdown measures in various countries. Our focus in these circumstances is on the short-term delivery and protection of long-term value.”

GOING FOR GROWTH That long-term focus has continued during the third quarter with further expansions and acquisitions. This past September, in a joint venture with BlackRock, Vopak Industrial Infrastructure Americas, it announced the acquisition of three industrial terminals on the US Gulf Coast from Dow for a price of $620m. That deal is expected to close before the end of 2020. In addition, late in the quarter, it completed a total of 169,000 m³ of new tank capacity at three of its terminals around the world: Durban (South Africa), Merak (Indonesia) and Vlissingen (the Netherlands).

Vopak has also announced that it is to expand its Alemoa terminal in Brazil with 20,000 m³ of new chemical tankage to further strengthen its position in Santos, Latin America’s largest port. The new capacity is due to be commissioned in third quarter 2023, subject to permit approvals.

In total, Vopak expects to spend between €500m and €600m this year in growth projects, including the acquisition of the Dow terminals. For 2021, it is aiming to allocate between €300m and €350m to growth investments, including projects already sanctioned, new business development and feasibility studies in new energies, including hydrogen. “We aim to grow EBITDA over time with new contributions from growth projects and replace the EBITDA from recent 2019 and 2020 divested terminals, subject to market conditions and currency exchange movements,” the company states.

“Although the pandemic brings a lot of uncertainty and the estimates remain subject to future events, we expect to continue to manage our performance in line with our original business plans and unchanged strategy.” That strategy includes a strict focus on cost control and Vopak says that its cost base is currently tracking lower than the target of €600m set for this year. www.vopak.com