Trading update: Boskalis maintains 2020 EBITDA guidance
Papendrecht, 6 November 2020
THIRD-QUARTER HIGHLIGHTS
- Revenue level stable compared to the first half of the
year
- Dredging: strong utilization of trailing suction hopper
dredgers
- Offshore Energy: good contribution from both contracting and
services
- Salvage: continued high activity level
- Order book: EUR 4.4 billion
- Strong net cash position further improved
OUTLOOK FOR 2020
- Dredging: stable market picture with COVID-19 related
disruptions
- Offshore Energy: good year for Seabed Intervention and growth
in Survey due to addition of Horizon
- Salvage: very good year
- Maintain 2020 EBITDA guidance: match 2019 EBITDA level
Royal Boskalis Westminster N.V. (Boskalis) concluded a good
third quarter. Quarterly revenue was virtually stable compared to
the quarterly average of the first half year, also adjusted for
currency effects, acquisitions and divestments.
The effects of the COVID-19 pandemic continue to be felt. While
it was already challenging to keep projects operational outside
Europe, it has also become increasingly complicated to do this
within Europe. Nonetheless, in the past quarter Boskalis succeeded
reasonably well in the execution of projects and keep the vessels
occupied. This outstanding achievement would not have been possible
without the commitment and flexibility of all employees, whilst
health and safety remained a top priority.
At the end of September the order book stood at EUR 4.4 billion,
slightly lower than at the end of June. Contracts worth over EUR
0.3 billion were acquired in the third quarter. The well-filled
order book offers a solid position for the remainder of this year
as well as a healthy basis for 2021. Clients in many cases are
still moving ahead with tendering procedures for new projects,
however due to COVID-19 these processes take longer than
usual.
Boskalis maintains its earnings outlook for 2020. Barring
unforeseen circumstances the 2020 EBITDA, adjusted for the
extraordinary charges taken in the first half of 2020, is expected
to match the level achieved in 2019.
The already very solid financial position of Boskalis was
further strengthened in the course of the third quarter with an
increase in the net cash position to more than EUR 250 million.
Operational developments
The third quarter at Dredging & Inland
Infra went largely as expected. Compared to the first half
year, the utilization of the hopper fleet increased. However after
a busy first half year, part of the cutter fleet was idle in the
third quarter. Quarterly revenue was at a lower level compared to
the quarterly average of the first half year, mainly due to
COVID-19 related operational disruptions.
A variety of projects was acquired in the third quarter. In
addition to numerous variation orders, this mainly concerned
projects in Europe. In Germany, among others, Boskalis will
strengthen the existing coastal defenses on the island of
Wangerooge, maintain the shipping fairway of the Weser between
Nordenham and Bremerhaven over a distance of 90 kilometers and
maintain the port of Emden at the required depth. On balance, the
Dredging & Inland Infra order book decreased to EUR 3 billion
compared to mid-2020.
On 3 November, a German federal court (Bundesverwaltungsgericht)
ruled in favor of the construction of the Fehmarnbelt tunnel. This
firm go-ahead will allow Boskalis to continue with the construction
of the tunnel between Denmark and Germany after the current early
works have been completed.
At Offshore Energy the third quarter proceeded
well and the revenue increased compared to the preceding two
quarters.Within the contracting cluster there was a particularly
strong contribution from Seabed Intervention. For Heavy Lifting and
the offshore wind activities several projects were delayed due in
part to COVID-19, resulting in the deferral of revenue and vessel
utilization to later this year and 2021.Within the services cluster
a combination of the low oil price and COVID-19 related delays and
disruptions adversely affected Marine Transport & Services. At
Subsea Services and Marine Survey the third quarter revenue
increased compared to the first half year. Marine Survey has been
particularly busy in recent months with campaigns along the US east
coast for the development of offshore wind farms.The utilization of
the heavy transport vessels and crane vessels was at a lower level
compared to the first half of the year, whilst the utilization of
the diving support vessels, survey, cable-laying and fallpipe
vessels was stable or higher.
A large number of smaller contacts were acquired during the
quarter. In addition to variation orders this involved the contract
for the transport and installation of five large floating wind
turbines for the Kincardine wind farm off the coast of Aberdeen in
Scotland and the installation of bridge sections for the world’s
longest suspension bridge, the Çanakkale 1915 bridge in Turkey. On
balance, the Offshore Energy order book decreased to EUR 1.3
billion compared to mid-2020.
In the Towage & Salvage segment, after an
exceptionally busy first half year, Salvage also completed a good
third quarter. Revenue was comparable to the first half year
quarterly average. The execution of two salvage assignments in the
Indian Ocean and the salvage of a vessel in the Arctic near
Spitsbergen contributed to the quarterly revenue.
At Towage the contribution by the towage joint ventures (Smit
Lamnalco and Keppel Smit Towage) was slightly above the quarterly
contribution of the first half year.
Financial position
Boskalis further sharpened its strong focus on cash management
since the COVID-19 outbreak. In order to safeguard its financially
strong position, various initiatives have been taken aimed at
limiting non-project related expenditures, optimizing working
capital and phasing investments. After the publication of the
half-year figures, the share buy-back program was resumed and 70%
of the program has now been completed.
Mid-October, Boskalis secured financing for the new mega cutter
suction dredger Krios by means of an Export Credit Agency covered
loan. With this facility of EUR 121 million, of which EUR 106
million has already been drawn, Boskalis has refinanced a
substantial part of the new-build costs of the Krios. The tenor of
the facility is twelve years, includes linear redemption and
carries an all-in financing cost of approximately one percent.
The financial position was further strengthened during the
quarter with an increase in the net cash position to over EUR 250
million, excluding IFRS16 related lease liabilities. With the
available cash and cash equivalents and bank facilities Boskalis
now has a direct financing capacity in excess of
EUR 1 billion.
Outlook for 2020The COVID-19 pandemic and its
effects are expected to continue to be felt – both in society and
economically – in the coming months. Although it is impossible to
predict the extent and duration of the impact, Boskalis has a
strong basis with its well-filled order book and extremely sound
balance sheet.
Based on the fleet planning and projects in the order book and
barring unforeseen circumstances, the Board of Management expects
that the 2020 EBITDA, adjusted for the extraordinary charges taken
in the first half of 2020, will match the level achieved in 2019 of
EUR 376 million.
Capital expenditure in 2020 is expected to amount to
approximately EUR 220 million, including dry dockings. This
projection does not include any acquisitions, such as the purchase
of the remaining interest in Horizon earlier this year.
FINANCIAL CALENDAR |
4 March 2021 |
Publication of
2020 annual results |
12 May 2021 |
Trading update on
first quarter of 2021 |
12 May 2021 |
Annual General
Meeting of Shareholders |
19 August
2021 |
Publication of
2021 half-year results |
12 November
2021 |
Trading update on
third quarter of 2021 |
Consensus earnings
estimates
Boskalis collects earnings estimates from those sell-side
analysts that follow Boskalis prior to the publication of the
(semi-)annual figures and planned trading updates. The average of
these estimates (consensus estimates) can be consulted on the
Boskalis website boskalis.com/IR/estimates.
FOR FURTHER INFORMATION
Investor relations:Martijn L.D.
Schuttevâerir@boskalis.com
Press:Arno Schikkerpress@boskalis.com
T +31 786969310
This is a Boskalis press release on the grounds of
article 17 paragraph 1 of the European Market Abuse Regulation
(596/2014).
This is an English translation of the Dutch press
release. In the event of any disparity between the Dutch original
and this translation, the Dutch text will prevail.
Royal Boskalis Westminster N.V. is a leading global
services provider operating in the dredging, maritime
infrastructure and maritime services sectors. The company provides
creative and innovative all-round solutions to infrastructural
challenges in the maritime, coastal and delta regions of the world.
With core activities such as coastal defense, riverbank protection
and land reclamation Boskalis is able to provide adaptive and
mitigating solutions to combat the effects of climate change, such
as extreme weather conditions and rising sea levels, as well as
delivering solutions for the increasing need for space in coastal
and delta regions across the world. The company facilitates the
development of offshore energy infrastructure, including renewable
wind energy. Boskalis is furthermore active in the construction and
maintenance of ports, waterways, access channels and civil
infrastructure, thus helping to facilitate trade flows and regional
socio-economic development. In addition, Boskalis is a global
marine salvage expert and has a number of strategic partnerships in
harbor towage and terminal services (Keppel Smit Towage and Smit
Lamnalco). With a versatile fleet of more than 700 vessels and
floating equipment and 9,600 employees, including associates,
Boskalis is creating new horizons around the world.
This press release can also be found on our website
www.boskalis.com.
- Boskalis Q320 Trading update ENG