Profits up for Boskalis’ towage arm
Royal Boskalis Westminster N.V. have published their 2014 annual report announcing increased overall profits, their towage division dominated by their various joint ventures.
A breakdown of Boskalis’ three core activities for 2014 shows revenue (by segment) headed by Dredging & Inland Infra at €1,665m followed by Offshore Energy at €1,238m and Towage & Salvage €271m. While towage and salvage (along with dredging) showed a slight decrease in revenue it delivered an increase in profit from €67.2m in 2013 to €84m in 2014.
In 2010, Dutch towage provider Smit became part of the Royal Boskalis Westminster family: long before the takeover however Smit had a global presence, often involving joint ventures (JVs) with local towage providers. Five such JVs now exist, Boskalis describing their partnership in December 2014 with Rotterdam based Kotug as: “… the last building block of our towage joint venture strategy.”
The JV strategy has resulted in a prominent presence on all continents with services provided at over 90 major ports in 35 countries employing 450 vessels and around 4,500 crew members. Boskalis states that the position provides them with a strong platform for further growth.
Dominant JVs include Keppel Smit Towage operating in Singapore, Malaysia and Indonesia while a major part of the family is the Smit Lamnalco operation which focuses on the Middle East and West Africa and an area where investment is planned. Smit Lamnalco’s recent acquisition of PB Towage of Australia is a sign of their expansion plans in this region. Last year also saw setting up of the SAAM Smit Towage JV with activities in major ports in Brazil, Mexico, Panama and the west coast of Canada.
Boskalis views the global market for towage services as stable and mature and while they see no requirement for investment in major fleet replacement they recognise the differences between the two activities of harbour towage and oil and gas terminal services provision. The stable cash flow (from towage) enables the JVs to finance themselves efficiently with a relatively high proportion of debt which has a positive impact on the return on invested capital. It also enables the JVs to effectively achieve independent growth and development.
By Peter Barker
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