Dredging and Towage Stable as Port Expansion Trend Continues
The growth of global trade flows and the need to maintain and expand ports are expected to continue at a moderate rate. As a result, Royal Boskalis Westminster expects a reasonably stable market environment for dredging and towage in the next couple of years.
“The markets in which Boskalis operates are driven by growing prosperity and the world’s increasing population. This increases global trade and energy consumption, as the irreversible impact of climate change becomes visible.”
“The extent to which these develop positively in the coming years depends largely on geopolitical stability and macro-economic growth. Positive investment decisions for large maritime infrastructure projects, which generate work for Boskalis, are closely linked to this,” according to Boskalis.
The financial position of Boskalis is very solid and the solvency ratio has increased to 50%, Boskalis said in its half year results.
After a very strong first half of the year for dredging the absence of comparable substantial settlement results accompanied by absence of comparable compensation for cancellations and delays in offshore market will result in a lower operating margin in the second half of the year.
Boskalis added that the outlook for towage & salvage is stable compared to the first half of the year.
Current insights suggest that the market picture is not expected to change significantly in the second half of the year compared to the first half of the year.
The growth opportunities for Boskalis are mainly in the offshore sector in the field of transport, logistics and installation. Despite growing reluctance in the offshore sector to make investment decisions when it comes to large projects, Boskalis said it remains cautiously positive about its own prospects in this part of the market by using and combining equipment and expertise throughout the group.
Peter Berdowski, CEO Boskalis said: “We have posted a historically high result in the first half of 2014 and the performance across the board of the company has been very good. This result is partly thanks to the strategic choice we made to broaden our focus on offshore. The offshore activities are becoming increasingly important and the contribution of Dockwise forms a key part of this. But the traditional core dredging activities also made an excellent contribution to the results.
In the first half of the year we achieved a high fleet utilization rate and good project results. In addition, a number of exceptional gains made a substantial contribution to the results, including settlement results on old projects in Dredging and Salvage as well as compensation for Dockwise transport contracts that were cancelled. The extremely good results may however not be viewed as a fair reflection of current market conditions which remain very challenging, both in terms of margin and volume.”
Press Release, August 14, 2014; Image: Boskalis