Posted on May 16, 2016
By Andrew Spurrier, IHS.com
Dutch dredging and marine services group Boskalis has begun work on a fleet rationalisation and cost reduction plan after seeing revenue decline strongly during the first quarter.
It said that some dredging plant was likely to be taken out of service and that this would have implications for staffing levels. In addition, it said, it was looking to reduce the cost of its global office network.
The group told IHS Fairplay, however, that it was unable to be more specific at this time.
Investor relations manager Martijn Schuttevaaer said that the group was still studying possible fleet and personnel cost reduction measures and had not so far made any announcement about their scale and timing.
“We expect to be able to provide more details in the coming months,” he said.
In the trading update it released on Tuesday, the group said that its first quarter performance had been in line with the indications it had given when it announced its 2015 results in March. Work volumes and prices had been under pressure, fleet utilisation had dropped, and revenues had declined sharply year on year.
It said that this situation was likely to continue during the year but that it was unable to give an estimate of likely full-year results, given that a significant amount of its work was project-based and that market conditions were uncertain.
“It is, however, clear that net profit will be substantially lower than the exceptionally strong 2015 results,” it said.
Last year, net profits were down 10% at EUR440 million (USD500 million) on the back of revenues up 2% to EUR 2.4 billion. But the group said that from an operational point of view, its results last year had been better than those of 2014, which had been boosted by a number of exceptional items.
In its dredging and inland infrastructure business, Boskalis said that it would be concentrating on maintaining utilisation rates at “responsible margins and levels of project risk” but that it expected a large part of the fleet to remain in service, even if at lower margins than in previous years, thanks to orders in hand.
Prospects for its offshore energy activities were mixed, it said, with part of the fleet benefiting from stability through long-term contracts and work in hand but with vessel utilisation rates and margins remaining under pressure in spot-related transport and subsea service activities.
At the same time, it said, the offshore wind market presented new opportunities, partly through its planned acquisition of the offshore and marine energy activities of Dutch construction group VolkerWessels, which is expected to be completed in the second quarter.
Following the closure of the merger of its European harbour towage activities with those of Kotug last month, all Boskalis’s towage activities are now being carried out via joint ventures. The group said that activity levels in the sector were relatively stable but that it expected competition to increase, particularly in terminal services.
Source: Fairplay
