Royal IHC expects ‘busy year’ ahead

Royal IHC has stated that the 2024 was a significant ‘turning point’ for the company after years of financial uncertainty.

The positive results of the strategic review and restructuring in 2023 have created the foundation for further growth, IHC said in the release.

Revenue increased with 40% in 2024 to €436.4 million (2023: €312.3 million). Although the year ended with a net loss of €33.4 million, the operating result (EBITDA) turned positive at €1.4 million (2023: €-31.2 million, excluding IQIP). At the end of 2024, the order book stood at approximately €400 million.

“In 2024, we transitioned from restructuring to building the organization,” commented CEO Derk te Bokkel. “Our operational and financial results are improving, the organization is more agile and our customers’ confidence in the future of Royal IHC is returning.”

The improved financial stability is the result of the new direction, restructuring and favorable market conditions.

Te Bokkel continued: “This combination inspires confidence among our stakeholders, despite global geopolitics and macro-economic uncertainty. This is reflected in our order book, with growing flow business and recent orders such as the mega hopper for Boskalis, the medium-class hoppers for USACE and Dutra, the hopper for DCI and the engineering for an electric cutter for QMM.”

The strategy introduced in 2023, with shipbuilding in the Netherlands, shipbuilding abroad, design and equipment and the flow business, has been well received by the market.

In the Netherlands, Royal IHC focuses on complex projects with shorter lead times and orders for the navy. The partner shipyard in Vietnam is taking on projects with a lower risk profile and more flexibility in planning, with the aim of building larger and more complex ships there in the future.

“After completing the two cutter suction dredgers for Kenmare, we will soon start building a Beagle® 8 for Vishwa Samudra in Kinderdijk. In Vietnam, the construction of a 2,300 m³ hopper for Baggerbedrijf De Boer – Dutch Dredging is proceeding according to plan. This will be followed by the cable lay vessel for OMS,” Te Bokkel added.

Another important step towards sustainable profitability is the further growth of the flow business, including smaller (standard) dredgers and mining vessels, IHC services, maintenance, spare parts, automation and modification projects, the sale of design and equipment packages and the development of cost-effective construction propositions for the replacement market.

In addition, the recently completed new financing structure is important for supporting future orders. “Our new financing was not a rescue; Royal IHC currently has sufficient work. The new financing enables establishment of new guarantee facilities, including from Atradius, which are essential for entering into contracts for the construction of larger and more complex vessels,” Te Bokkel concluded.