Boskalis Q3 Results in Line with Expectations
Royal Boskalis Westminster N.V. has closed the third quarter of 2016 in line with expectations.
Both revenue and operating profit were higher than the average seen in the first two quarters of the year.
The increase was wholly attributable to the contribution from the offshore activities acquired from VolkerWessels, which are consolidated with effect from the third quarter. Adjusted for these activities there was a slight decline in revenue and operating profit compared to the average seen in the first two quarters of the year.
Adjusted for acquisitions there was a substantial decline in revenue and operating profit compared to the third quarter of last year, in line with expectations. 2015 as a whole was an exceptionally good year with high fleet utilization and particularly good project margins.
Market conditions remain persistently difficult both at Dredging and for the capacity-driven service-related activities of Offshore Energy, putting pressure on volumes and prices.
The order book increased to EUR 2.9 billion, up 8% compared to end-June, with the increase wholly attributable to the addition of the offshore activities of VolkerWessels.
The expectations for the remainder of the year remain unchanged.
For 2016 as a whole Boskalis expects the operating net profit in the second half to approach the level achieved in the first half of the year.
Dredging & Inland Infra had a quiet third quarter in line with the first half of the year.
Market weakness resulted in low but stable utilization levels for the hopper fleet and revenue comparable to the average seen in the first two quarters of the year.
Results on dredging projects in progress were reasonable to good and there was also a positive contribution to the result from projects that were technically completed at an earlier stage.
In the third quarter projects were contracted in countries including the Netherlands, Finland, the United Kingdom and Uruguay.
On balance the order book at Dredging & Inland Infra fell by around 5% compared to mid-2016.
Update on fleet rationalization
At the beginning of July, Boskalis announced a fleet rationalization program to be implemented over the next two years.
It involves 24 vessels being taken out of service and the loss of 650 jobs. After obtaining a positive opinion from the Dutch Works Council and approval of the social plan from both trade union CNV Waterbouw and the Works Council, Boskalis started with the implementation of the program.
Of the announced reduction affecting 650 jobs, the workforce has already been reduced by more than 200 jobs.
The timing of the remaining workforce reduction is partly dependent on factors including the current deployment of vessels and national legislation.