IHC Merwede: Healthy Profit Margin (The Netherlands)
IHC Merwede has revealed a healthy net profit margin of 4.1% per cent in 2012 and a positive sales forecast for the year ahead.
The company develops and builds innovative vessels, advanced equipment and life-cycle support services for the dredging, mining and offshore industries, which have been performing well – despite the global economic situation and the knock-on effect for the maritime industry.
In 2012, IHC Merwede reached a revenue of € 895 million and a net profit of € 37 million. After the exceptional years of 2010 and 2011, the revenue and profitability were lower last year. The main reason for lower profitability is the increased competition in IHC Merwede’s markets of dredging, mining and offshore. Despite this competition, it is encouraging to see that IHC Merwede has managed to keep a healthy profit margin, with profit figures expected to be on the rise again in 2013.
With sales amounting to € 679 million, IHC Merwede assured itself of an encouraging order book of € 1 billion – the equivalent of approximately one year’s workload, which is the company’s target. A lack of readily available finance for customers delayed many sales agreements. IHC Merwede has now bridged this gap with a definitive list of finance options on offer, thanks to the help of banking consortium and government-driven initiatives.
IHC Merwede continued to invest strongly in product development, its worldwide networks, and marketing and sales capacities in 2012, and intends to pursue these in the years ahead. With regard to the company’s high-end equipment, it is developing technology on an ongoing basis to enhance its position as the technology innovator. However, it also recognises that many customers require more standardised and less expensive products in the current economic climate.
Therefore, IHC Merwede is developing a complete new range of cost effective vessels and equipment for the more substantial medium-specification markets. In the dredging sector, the company introduced the IHC Beagle® and Easydredge, while in offshore, it launched the IHC Packhorse™ platform supply vessel.
The dredging market has been moderate in 2012. The big players in this field were hesitant to invest due to the financial crisis, but there was a healthy level of interest in smaller to mediumsized equipment from dredging companies in Asia, South America, Africa and the Middle East.
For 2013, IHC Merwede expects a much more buoyant dredging market. The mining market is now definitely showing signs of growth, with companies becoming more convinced of wet mining solutions and getting ready to invest in this type of advanced equipment. IHC Merwede’s integrated package of dredge-mining vessels and mineral processing is unique – and therefore an attractive proposition to customers.
The pipelaying vessels ordered by SapuraKencana and Subsea 7 in early 2012 were also a major breakthrough in the offshore market. This is the first time that an advanced, completely integrated pipelaying vessel has been ordered from one supplier – IHC Merwede is not only building the vessel, but also developing, constructing and integrating the advanced mission equipment. With the Brazilian project booming, Petrobras will continue to invest and IHC Merwede is in a strong position to win more business in the near future.
Offshore wind is still a priority in the renewable energy sector thanks to government funding. IHC Merwede is now developing more sophisticated equipment in response to this demand. The company also acquired Wave Rotor technology from Ecofys in 2012, as it believes that tidal energy is a promising market for the future.
IHC Merwede’s four strategic priorities remain as: internationalisation; growth; product and process development; and internal and external cooperation. These subjects have underlined the company’s business development programme during the past year and will continue into 2013. A key part of this successful strategy is the establishment of regional headquarters to rationalise its local presence and secure building capacity in partner shipyards.
“There is certainly room for optimism due to an encouraging list of prospective projects and potential new orders,” says IHC Merwede’s President Govert Hamers. “IHC Merwede will continue to invest in the development of the company as a whole and aim to further increase its portfolio of products and services.
“Examples of future new activities include start-up ventures and the acquisition of technology companies, as well as more sophisticated financial packages and other services. The intention is to continue to strengthen the company’s position by offering an even more integrated package to customers.”
Press Release, April 4, 2013