Vopak improves results

ON THE UP

RESULTS • VOPAK HAS ENJOYED A RECOVERY IN ITS FIGURES IN THE FIRST HALF, SIGNALLING THAT ITS REVISED STRATEGIC VISION IS TAKING THE COMPANY IN THE RIGHT DIRECTION

ROYAL VOPAK HAS reported improved results for the second quarter and first half of 2019. The company has this year adopted the IFRS 16 accounting principles but, on a pro-forma basis, revenue for the first half was 2 per cent ahead of last year at €641.4m and group EBITDA, excluding exceptional items, rose by 14 per cent to €398.3m. The main exceptional item booked in the second quarter was a gain of €16.4m from the sale of its 50 per cent shareholding in the Vopak EOS terminal in Estonia in April this year.

Global storage capacity at the end of the second quarter stood at 36.9m m³, up from 36.0m m³ a year earlier after a number of additions and divestments. Average occupancy slipped though, from 86 per cent in first half 2018 to 85 per cent for the same period this year and 84 per cent for the second quarter. Vopak says this drop relates primarily to temporary closures to prepare tanks for the new ‘IMO 2020’ rules on the sulphur content of marine fuels, which take effect on 1 January 2020, as well as continued weakness in some of its oil hub terminals.

“The first half of 2019 was important as we have taken further steps in the delivery of our strategy and the alignment of our portfolio based on long-term market developments,” says CEO Eelco Hoekstra. “We have taken significant new capacity into operations to meet new customer demand. Together with our partners we fully commissioned the industrial terminal PT2SB in Malaysia and celebrated the opening of the LPG export terminal RIPET in Canada. In addition, we expanded our share in the LNG import terminal in Pakistan.”

CAPACITY TO COME As well as selling off its interest in Vopak EOS, Vopak has agreed the sale of three other European sites: Algeciras, Amsterdam and Hamburg. First State Investments is to pay some €723m for the three terminals, which is expected to deliver an exceptional pre-tax gain of around €200m in the second half of 2019. “The divestment of some of our European assets will, after completion, shift our portfolio further towards industrial, chemical and gas terminals,” Hoekstra explains. “We aim to grow our portfolio in line with market developments and expect our growth investment momentum in 2019 to continue in 2020.”

At the start of 2018, Vopak had 3.2m m³ of new capacity lined up for commissioning by the end of 2019. As of mid-2019, 2.1m m³ of that had been delivered, meaning there is more to come in the second half. A new joint-venture terminal in South Africa is due to be commissioned before the end of the year, along with expansions at the new Panama site and at existing terminals in Malaysia, Brazil, Singapore, Indonesia and Mexico.

In addition, the company has announced two further expansions: • The Deer Park chemical terminal in Houston will be expanded by 33,000 m³, with the new tankage expected to be commissioned in second quarter 2021; and • A 105,000-m³ expansion for the storage of clean petroleum products and aviation fuel is