Solid result SMIT in turbulent year

• Harbour Towage: slow-down mainly compensated by repositioning of vessels.
• Terminals achieves sharp profit growth caused by new contracts.
• Salvage result at a high level due to settlement prior year cases.
• Transport activities contribute well.
• Heavy Lift fleet utilisation lower than previous year.
• Process of merger with Boskalis on schedule (EGM on 16 March 2010).

Results in 2009
• Net profit EUR 102.4 million (2008: EUR 107.8 million).
• Net profit includes non recurring items from settlement “Thunderhorse” (EUR 10 million net) and taxes (EUR 4 million net).
• EBITDA (including associated companies) EUR 199.7 million (2008: EUR 201.0 million).
• Operating result EUR 104.6 million (2008: EUR 112.5 million).
• Result from associated companies EUR 20.8 million (2008: EUR 25.4 million) mainly due to lower result Asian Lift.
• Net earnings per share EUR 5.57 (2008: EUR 6.11).
• Dividend 2009 per share amounts to EUR 2.75 in cash, as announced in press release of 25 January 2010.

Ben Vree, CEO, commented as follows: “Despite the world wide recession, which off course also impacted our business, we continued to realise good financial results. This result, however, has been influenced by the settlement of the “Thunderhorse” project and a non-recurring tax benefit. During 2009 we noticed that the decline of the Harbour Towage market stabilised and at certain locations even improved slightly towards the end of the year. The Terminal activities continued to grow substantially and provided stable income. Salvage remains unpredictable! The result was heavily influenced by the settlement of prior-year salvage jobs; as a result the Division performed well. The Transport & Heavy Lift activities initially showed good utilisation rates for the fleet. However, in the second half of the year the recession had a greater impact on the spot business of this division. Our strategy of realising stability and gradual growth has proved to be successful also in times of recession.”

Harbour Towage Division
Harbour towage services and related maritime services.

• Revenue: EUR 155.6 million (2008: EUR 185.7 million).
• Operating result: EUR 18.4 million (2008: EUR 33.2 million).
• ROACE: 7% (2008: 21%). Target is a ROACE of 15%.
• Result of associated companies: EUR 8.4 million (2008: EUR 5.3 million).

The recession had a significant impact on revenues for the Division Harbour Towage. Particularly in Europe and Canada the number of ship movements decreased compared with last year. In order to keep profit margins on an acceptable level a number of harbour tugs were immediately repositioned from existing operations to new ports. Mainly from European ports harbour tugs have been mobilised to joint venture companies that started new harbour towage services. In Taiwan the joint venture with Kueen Yang started harbour towage activities with 5 tugs in the port of Taipei at the beginning of 2009. In the Baltic region the joint venture Towmar SMIT Baltic was incorporated in May 2009 providing services in Lithuania and Latvia. SMIT contributed 3 new harbour tugs into this joint venture. Furthermore the synergies with the Division Terminals were optimised by transferring 6 harbour tugs to new terminal contracts in locations such as India and Indonesia.

The result from associated companies grew sharply compared with last year. The joint venture Rebras completed its new building programme of 18 tugs during 2009 and currently 21 tugs are operational at 5 different locations in Brazil. The impact of the recession on the joint ventures in Asia was less than in other regions due to the focus on oil-related activities. Therefore these companies continued to realise a good profit.

During the 4th quarter of 2009 SMIT was awarded a 5 year concession for the provision of harbour towage services in the Port of Gladstone, Australia. The operations will start on 1 January 2011 with 6 new tugs.

Just before the end of the year the acquisition of 100% of the shares of Minette Bay Ship Docking was finalised. This company operates three harbour tugs in Prince Rupert, Canada and will be integrated into the existing SMIT activities on Canada’s West Coast.

Despite the current recession the Harbour Towage market is considered as being stable. SMIT set itself the target of increasing the net result in this Division by 50% over the coming five years (starting 2007) by means of acquisitions, expansion of activities and fleet expansions.

Terminals Division
Towage services and related maritime – and management services to offshore and onshore terminals.

• Revenue: EUR 97.5 million (2008: EUR 70.6 million).
• Operating result: EUR 18.1 million (2008: EUR 10.9 million).
• ROACE: 14% (2008: 12%). Target is a ROACE of 15%.
• Result of associated companies: EUR 2.8 million (2008: EUR 1.8 million).

During 2009 Terminals realised a sharp profit growth. On the one hand this growth is a result of the new contracts that started in the second half of 2008 and contributed for a full year in 2009 such as the operations in Kuwait and Pakistan. On the other hand the profit increase is caused by the contracts which started in 2009. In the 3rd quarter of 2009 the 25 year contract for the LNG terminal in Italy commenced with 4 tugs through a joint venture company. Two smaller contracts commenced in India and Gabon during the second half of the year and the existing contract in the Bahamas was extended with an additional tug. Furthermore during 2009 a so called “frontrunner” contract in Indonesia contributed to the result, using 4 tugs from the Division Harbour Towage. The current terminal contract in Novorossiysk (Russia) will not be renewed and will be terminated mid-2010.

The growth target for net profit is 100% over a five-year period (starting 2007).

Salvage Division
Salvage, wreck removal, environmental care and consultancy.

• Revenue: EUR 93.5 million (2008: EUR 116.7 million).
• Operating result: EUR 27.6 million (2008: EUR 16.7 million).
• Net production ratio: 42% (2008: 24%). Target is a net production ratio of at least 10%.
• Result of associated companies: EUR -0.1 million (2008: EUR 0.5 million).
• Historic average operating result for the full year 2009 amounts to EUR 18.8 million (2008: EUR 16.0 million).

The work load for the Division Salvage was below the historical average due to less casualties during 2009. The profit for the year 2009, however, is at a very high level due to the settlement of prior year salvage cases which generated additional salvage income. The main settlement relates to the “Thunderhorse” project (Gulf of Mexico, 2005) with an impact of EUR 10 million on net profit.

SMIT’s market share remained at a high level. Major projects in 2009 were:

• “Full City”, Norway;
• “Maria M”, Sweden;
• “Xin Dong Guan”, Malaysia;
• “Kiran”, South Africa
• “Pride Wyoming”, Gulf of Mexico;
• “Ice Prince”, UK.

Due to the settlement of prior year salvage cases working capital has been reduced substantially.

The level of activity in this division is unpredictable. SMIT targets complex projects in this market, projects in which SMIT can use its expertise to offer a great deal of added value, particularly in environmental care activities. The target is to maintain a market share of
25–35%.

Transport & Heavy Lift Division

Transport
Chartering, barge rental, heavy transport, (ocean) towage.

• Revenue: EUR 158.3 million (2008: EUR 215.3 million).
• Operating result: EUR 35.8 million (2008: EUR 39.6 million).
• ROACE: 21% (2008: ROACE 35%). Target is an ROACE of 15%.
• Result of associated companies: EUR 2.0 million (2008: EUR 4.1 million).

The Transport activities realised a good return which is well above the 15% target. The long term contracts provide a steady cash flow and profit. The spot business was influenced by the economic crisis which caused some pressure on day rates during the second half of the year. The transport activities in Asia, in particular, contributed well to the result.

The growth target for the transport activities is organic growth of 10% per year.

Heavy Lift
Heavy lift activities, implementation of maritime projects, marine support and subsea
activities.

• Revenue: EUR 119.0 million (2008: EUR 156.1 million).
• Operating result: EUR 11.1 million (2008: EUR 19.5 million).
• Profit margin (operating result/revenue) 9% (2008: 13%). Target is a profit margin of 15%.
• Result of associated companies: EUR 7.3 million (2008: EUR 13.7 million).

The utilisation of the sheerlegs was at a lower level than previous years due to less projects during the second half of the year. During that period the “Taklift 4” has been out of service in order to execute a life time extension programme. Also the lifting capacity of this sheerlegs has been increased in response to market demand. A number of sizeable projects in Brazil have been contracted already and will be executed during 2010.

The subsea – and the marine project activities realised better results in the second half of 2009. The jack-up barge “Lisa A” completed its contracted projects and was redelivered to its owner at the end of the year.

Due to lower utilisation rates of the sheerlegs in Asia the results from associated companies decreased, but returns remain above target.

The growth target for the heavy lift activities is consolidation at the current level.

Taxes
The tax burden decreased from 18.4% in 2008 to 14.8% in 2009. The lower tax burden is a consequence of the valuation of unused tax losses relating to former activities in the United Kingdom. On the other hand tax provisions have been made to cover foreign tax exposures. On balance the net impact of these non-recurring items is approximately EUR 4 million.

Earnings per share
During 2009 stock dividend was issued, bringing the total number of outstanding shares as at 31 December 2009 to 18,366,591. Combined with the slight decrease in net profit the earnings per share amount to EUR 5.57 (2008: EUR 6.11 per share).

Investments
During 2009 34 vessels were delivered from the shipyards of which 17 tugs at associated companies. The group companies invested EUR 142 million in tangible fixed assets (including vessel surveys). The divestments amounted to EUR 22 million, which includes the transfer of vessels to joint ventures. On balance the net investment arrived at EUR 120 million.

On 31 December 2009, the outstanding investment commitment of the Group companies amounted to approximately EUR 81 million.

Dividend
An (interim) dividend of EUR 2.75 will be paid on 25 March 2010. The remainder of the profits over 2009 shall be added to the retained earnings. The ex-dividend date will be 15 March 2010 and the dividend record date will be 17 March 2010. The dividend of EUR 2.75 is in line with SMIT’s dividend policy to pay out approximately 50% of net profit.