Vopak sees little market impact

IN GOOD HEALTH

RESULTS • VOPAK SAYS IT HAS SEEN LITTLE OPERATIONAL IMPACT FROM THE COVID-19 PANDEMIC AND IS STILL PLANNING TO INVEST TO GROW ITS GLOBAL TERMINAL PORTFOLIO

ROYAL VOPAK HAS reported stable results for the first quarter of 2020, with group EBITDA of €200.2m representing an increase of €3m compared to the same period 2019 once the divestments of the Algeciras, Amsterdam and Hamburg terminals and the effects of currency movements are taken into account. The company says this reflects “resilient business performance”, including the effects of the work to convert tankage to handle IMO 2020-compliant bunker fuels.

Indeed, net profit was hardly changed over the year, slipping slightly from €83.3m to €82.7m. Vopak reports that it has not seen

THE PENGERANG TERMINAL COMPLEX IN MALAYSIA

(ABOVE) IS ONE OF MANY MAJOR PROJECTS THAT any operational impacts from the Covid-19 pandemic, with all its 66 terminals around the world working normally, although it has had an impact on its employees. “Our main focus is on the health of the people working for our company around the world and to limit the spread of the Coronavirus, to manage the impact on our business and to assess the impact on the economy and society,” Vopak says.

On the other hand, Vopak also acknowledges that it is too early to assess the extent and nature of the full impact of the pandemic on future developments, including potential delays to projects under construction and general operating and market conditions, as well as currency movements. “Our focus in these circumstances is on the short-term delivery [of services] and protection of long-term value,” it says. BRIGHT SPOTS Consistent with performance over the past two years, Vopak’s Europe and Africa division witnessed weaker results, with revenues down from €153.8m a year ago to €126.6m, although this partly reflects the disposal of a number of terminal assets that did not fit into the company’s strategy. EBITDA was also down, falling from €78.4m to €60.7m, with operating profit in the Netherlands also off by 18.5 per cent at €48.0m.

Results from the Asia & Middle East division were also down, with revenues falling from €84.5m to €74.9m and EBITDA down by €3.9m at €78.0m. Much of this decline was concentrated in Singapore following high levels of planned inspection and maintenance. Revenues and profits also slipped slightly in the China & North Asia division.

The Americas division, conversely, reported improved figures, with revenues up 11.1 per cent at €84.0m and EBITDA up 25 per cent at €47.6m, following the opening of new tank capacity in Brazil, Mexico and Panama over the course of 2019.

During the first quarter, 235,000 m³ of new capacity came onstream in Malaysia and Vietnam, while Vopak also announced a 65,000 m³ expansion of the Caojing terminal in Shanghai to serve the nearby Shanghai Chemicals Industry Park.

Vopak is committed to continuing to invest to develop its network and, despite the market uncertainty, says it will be making capital investments of between €300m and €500m this year. Part of that will be going to the Vopak Moda Houston (VMH) terminal in Deer Park, a joint venture with Moda Midstream. Initial development work will include 46,000 m³ of gas tanks and a new jetty for the storage and handling of chemical gases. All this capacity has already been fully rented out under long-term contracts. The new terminal is expected to be commissioned in phases, starting late this year with completion scheduled for second half 2021. www.vopak.com