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Weak Oil Price, End to Suez Project Hit Boskalis Profit

Posted on May 12, 2016

Dutch marine engineer Boskalis said its first-quarter revenue had declined sharply compared with last year, partly due to the end of the giant Suez Canal enlargement project, and said full-year net profit would be sharply down.

Boskalis, a leading global port services and dredging company, said in a trading update on Tuesday its order book had nonetheless lengthened slightly over the quarter, up from 2.49 billion euros at the end of 2015.

Marine engineers have been hit hard by low oil prices, which have prompted oil companies to cut back on offshore prospecting, and by the conclusion of the Suez project, an earnings bonanza for dredging companies.

When it announced full-year results in March, the company had predicted a tough 2016 amid low oil and commodity prices. Shares nonetheless fell more than 3 percent on the announcement before largely recovering.

The company said it planned capital expenditure, including acquisitions, of around 200 million euros over 2016, all of which would be financed from its own cashflow.

The company promised cuts to its fleet, which would particularly effect dredging equipment. The cuts would also lead to reduced staffing levels, it said.

“Net profit will be substantially lower than the exceptionally strong 2015 result,” the company said in a statement. (Reporting By Thomas Escritt, editing by David Evans)

Source: DailyMail

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