Boskalis H1 results down, will exit heavy lift business
Staff Writer |
The operating results of Royal Boskalis Westminster decreased in the first half of the year compared to the first half 2017.
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This decline was mainly due to a sharp drop in the result of the Offshore Energy division where the transport activities at the low end of the market in particular worsened further and are now heavily loss-making.
This segment is rapidly becoming a commodity transport market, often not oil and gas-related, that is structurally confronted with (Asian) overcapacity.
In addition, the commodity activities do not fit within Boskalis' strategy aimed at a position higher up in the Transport & Installation market.
These developments have prompted Boskalis deciding to terminate these activities. Due in part to this decision an extraordinary charge of EUR 397.0 million was recognized in the first half of the year, consisting mainly of a goodwill impairment and a write-off of vessels.
A net operating profit of EUR 34.5 million was realized in the first half of the year (H1 2017: EUR 75.1 million). Including extraordinary charges the company reported a net loss of EUR 361.4 million.
Revenue in the first half of the year amounted to EUR 1.17 billion, a 6.6% increase compared to the first half of last year (H1 2017: EUR 1.09 billion).
EBITDA totaled EUR 167.2 million in the first half of the year and the operating result was EUR 47.4 million, both adjusted for extraordinary charges (H1 2017 EBITDA: EUR 225.1 million, operating result: EUR 101.7 million).
At Offshore Energy the contracting activities revenue was virtually unchanged, with important contributions from the cable-laying activities and seabed intervention projects such as TurkStream and Nord Stream 2. The sharp drop in the result of the division is largely attributable to the decline at services.
Boskalis is able to set itself apart at the top end of the transport market where many opportunities still exist whereas the smaller, predominantly older transport vessels at the low end of the market are now loss-making.
This part of the market is at the lower end of the S curve and is not strategically interesting for Boskalis.
Therefore Boskalis has decided to exit this market segment and take the closed-stern heavy transport vessels (types IIb and III) out of service. This will result in a structural improvement in the operating result of