Van Oord Optimistic About Growth Opportunities in Offshore Segment
- Business & Finance
Van Oord had a better year in 2013 than in 2012. The year closed with an almost equal turnover of USD 2,273 million (2012: USD 2,322 million).
At USD 180 million, the net profit was considerably higher than in 2012 (USD 136 million), and the company’s order portfolio was similar to the previous year. The net profit was positively affected by the settlement of a number of outstanding claims in Dubai from 2005-2008. Higher operating revenues considerably decreased the net debt.
Van Oord realigned its strategy in the past year by analysing its activities in dredging, offshore oil & gas, offshore wind. In the present five-year period (2013-2018), it will be pursuing a strategy of growth. “That growth will come mainly from our Offshore (oil & gas) and Offshore Wind Projects business units”, says CEO Pieter van Oord. “We don’t plan to take on any new activities outside our own sector because we believe our existing activities offer enough potential for growth.”
The volume of activity in the dredging market remained stable in 2013. The occupancy rate for Van Oord’s fleet was slightly higher than in 2012. There were major changes in the various markets worldwide, however. The European market improved, although this has not resulted in higher prices. Conditions in the markets of Brazil, Nigeria and India were difficult. “We were successful in Indonesia. We delivered the Gladstone project in Australia and are continuing our work on Ichtys, another major project. At this point, we do not see any large follow-up orders on the horizon in Australia. One significant trend is that we are being asked to assume all-round responsibility for port engineering and construction, as the main contractor. The Moín project in Costa Rica is a good example of this”, says Pieter van Oord.
Offshore oil & gas
Van Oord’s Offshore business unit entered a new market segment this year when it deployed the company’s new shallow-water pipelay barge Stingray, on its first two projects in Korea and Taiwan. “We can now dredge a trench, lay the pipeline and backfill the trench for our clients. By offering them a complete service, we eliminate interface risks,” says Pieter van Oord. The occupancy rate of the company’s three flexible fallpipe vessels was high. The market for landfalls and single point mooring buoys was weak in 2013.
The Offshore Wind division recorded limited turnover in 2013. The year was dominated by preparations for two major projects, Luchterduinen and Gemini. The Luchterduinen wind farm is being constructed 23 km off the Dutch North Sea coast for energy company Eneco.
2013 was a key year for the Gemini project, a 600 MW wind farm that will be constructed 60 km north of the West Frisian island of Schiermonnikoog. New shareholders with responsibility for financing have taken over the project from the developer. Gemini is a socalled non-recourse construction finance. The construction contract is executed by Van Oord and Siemens. “We will own 10% of the project’s equity capital’, says Pieter van Oord. ‘We expect the project to reach financial close in April. Construction will proceed in 2015 and 2016.”
Van Oord is financially solid. There were no changes in its financing in 2013. Shareholdings also remained unchanged in 2013. MerweOord B.V., the holding company owned by the Van Oord family, holds 78.5% of the shares. The two investment companies, ConsOord B.V. and Cobepa (Nederland) N.V., have a joint stake of 21.5%.
“The global economy will make a cautious recovery in 2014”, predicts Peter van Oord. “Growth in ‘emerging economies’ is expected to slow. This will lead to major regional differences in growth and market opportunities. With oil prices remaining high, we are optimistic about growth opportunities for our Offshore (oil & gas) business unit. The Dutch energy transition agreement and plans by other European countries to build offshore wind farms mean we can expect growth in our Offshore Wind Projects business unit. All in all, then, we anticipate considerable growth for the company in 2014. One ongoing point of concern is finding enough technically skilled employees. Our low net debt and healthy cash flow mean that we will have enough financial leeway in 2014 to take a number of investment decisions.”
Press Release, March 12, 2014; Image: Van Oord