Boskalis realized a slightly higher revenue in the first quarter of 2012 compared to the same period last year. In recent months, market circumstances remained challenging with continued pressure on revenue and margins.
For the combined Dredging and Dry Infrastructure segment revenue for the first quarter was comparable to the same period in 2011. Average utilization of the large vessels improved slightly. Utilization of the hopper fleet remained unchanged whereas utilization of the cutter fleet was higher than the average utilization in 2011.
With effect from the 2012 half-year results the dry earthmoving activities and activities of MNO Vervat which were acquired at the end of last year will be reported in a new segment, Dry Infrastructure.
The Harbour Towage activities showed a stable revenue development. The level of activities was particularly high in Brazil. In 2011, Boskalis increased its interest in Brazilian SMIT Rebras to 100% as a result of which it is able to optimally respond to positive economic developments in this country and the corresponding increase in the number of shipping movements in the Brazilian harbors.
The Salvage, Transport & Heavy Lift segment showed on balance a positive picture in the first quarter. Salvage experienced high demand for wreck removal services and the Transport and Subsea activities also developed well. Demand for Heavy Lift services showed, however, a mixed picture. Whereas demand for floating sheerlegs in Asia picked up, it lagged behind in Europe.
Activity levels at both the Terminal Services and Maritime Infrastructure segments developed in line with expectations. In the area of Maritime Infrastructure (through a 40% stake in Archirodon) a few large new contracts were acquired in Morocco and Saudi Arabia.
At the end of March, the order book amounted to EUR 3.55 billion, excluding the recently acquired contracts in Australia (Ichthys offshore) and Northwest Europe (West of Duddon Sands wind park, Meerwind wind park and subsea maintenance work for Maersk Oil) with a combined value of EUR 310 million. On balance the order book increased slightly compared to the 2011 year-end level (EUR 3.49 billion).
The financial position of Boskalis continues to be strong and showed no material change compared to the end of 2011.
MARKET DEVELOPMENTS
The markets in which Boskalis operates are driven in the long term by growth in global trade, growing energy consumption, growth in world population and the consequences of climate change. In the short term there is a stagnation of demand and pressure on margins in a number of the markets. However, what Boskalis sees in various regions around the world and in different market segments is clients who are developing all kinds of initiatives for new and in many cases sizeable maritime infrastructure projects. This applies in particular to energy and minerals-related projects in South America, West Africa and Australasia.
The market developments in the offshore market are relevant to a substantial part of company’s business. Following on from the demand for and construction of new oil and LNG import and export terminals, the company expects to see growth for the terminal activities (Smit Lamnalco). Furthermore the developments at Transport, Heavy Lift and Subsea are largely dependent on a recovery in demand from the energy markets, in particular those of the offshore markets of North-West Europe, Brazil and Southeast Asia.
OUTLOOK
Given the current market conditions, Boskalis expects that 2012 will be affected by a slow down on the positive drivers that underpin the company’s strategy. This situation, combined with the project-based nature of a significant part of company activities, means that Boskalis is currently unable to provide quantitative guidance for the 2012 annual result. Based on current insights, the company do not foresee a materially different market environment in 2012 relative to 2011, but prospects for the medium term are more positive.
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Dredging Today Staff, May 10, 2012; Image: Boskalis