Record revenue as profit falls at Boskalis
Although in 2009 the net profit of Dutch dredging giant Royal Boskalis Westminster N.V. fell to €227.9m from €249.1m the year before revenue was up to a record €2.2bn and was widely spread, both geographically and across all market segments.
The net profit figure of €227.9m includes a €35.3m exceptional gain on the stake held in Smit Internationale N.V. and an exceptional impairment charge of €39.7m (after tax) relating to the older part of the fleet.
In 2009 Boskalis was awarded new orders worth €1.8bn. As a result, the company was able to end the year with a strong order book of €2.9bn, even with a record revenue and amid difficult market conditions.
Boskalis CEO Peter Berdowski said, ‘2009 was an excellent year for Boskalis despite the difficult market conditions. We have thereby benefitted from our broadly spread and well filled order book, an adequate execution of the projects and our disciplined contracting policy. In addition, over the past year we were successful in acquiring projects in the high end of our markets in, amongst other regions, Australia and South America.
‘The global recession has also affected our industry and although to date the impact on Boskalis has been limited, we are preparing ourselves for lower volumes of work and lower margins. The implementation of our fleet rationalization program will improve our cost structure and thereby boost our position in the market.
‘Despite the current market conditions we look forward to 2010 with confidence in the light of our well-filled order book and the fleet rationalization programme we have launched.’
The global market for dredging and maritime infrastructure is driven by factors such as growth in world trade, the global population, energy consumption and the effects of climate change. Following a period of robust growth, this growth trend came to an end in late 2008.
While the structural long term growth factors for dredging and maritime infrastructure remain positive, Boskalis reported the short term outlook has become markedly less certain since early 2009, as a consequence of a lower oil price, lower demand for natural resources and stagnating global trade.
This deterioration in market conditions has clearly had a visible impact on Boskalis’ products and services. Customers are taking a critical look at their plans, the award of projects is taking longer and margins in certain of its markets are under pressure.
Boskalis is in the final phase of a longterm capital expenditure program, meaning that the investment level will decline over the next few years. In the next two years the company expects annual capital expenditure of around €150m to €200m.The company anticipates that 2010 earnings will be lower than the level achieved in 2009, disregarding the effects of the potential completion of the merger with Smit.
