Boskalis Q1 Results: Downturn in Key Segments
Royal Boskalis Westminster N.V. (Boskalis) has just announced results for the first-quarter of fiscal 2016.
According to the release, developments at Boskalis in 2016 have so far been in line with the company’s expectations.
The decreased revenues are primarily due to lower fleet utilization compared to the same period in 2015. The EBITDA margins were slightly down compared to the same period in 2015 and the order book increased slightly during the first quarter.
Revenue in the Dredging & Inland Infra segment declined compared to the first quarter of last year. The decline is partly attributable to the completion of the Suez Canal project, which made a substantial contribution to last year’s revenue.
Notable projects in the first quarter of 2016 were port maintenance works in countries including Germany, Australia and Mexico, and land reclamation projects in Indonesia and Panama.
The order book of the Dredging & Inland Infra segment increased slightly during the quarter compared to the end of 2015. The new projects contracted include the construction of artificial islands off the coast of Makassar (Indonesia), construction of the Offshore Terminal Bremerhaven (Germany) and reinforcement of the Wadden Sea dike on the island of Texel (the Netherlands).
In early March, a consortium including Boskalis was designated the preferred bidder for the dredging work for the Fehmarnbelt tunnel connecting Germany and Denmark. The contract negotiations are progressing well and Boskalis expects the contract, which is valued at EUR 600 million (Boskalis’ share 50%), to be signed in the near term.
At the end of the first quarter, Boskalis concluded the acquisition of the dredging assets of STRABAG Wasserbau GmbH, thereby strengthening its home market position in Germany and fulfilling an important part of the foreseen requirement to replace part of the hopper fleet.
The market in general has seen no material change since the release of the 2015 full-year results and will be characterized in the coming period by lower volumes of work and pressure on utilization rates and margins.
At Dredging & Inland Infra the emphasis will be on maintaining utilization rates at responsible margins and levels of project risk. With the current orders in hand a good part of the fleet will be utilized for 2016, albeit at lower margins than in previous years.
Capital expenditure in 2016 is expected to be around EUR 200 million, excluding acquisitions, and will be financed from the company’s own cash flow.