Van Oord has 30% more profit

logo-vanoordVan Oord had a better year in 2013 than in 2012. The year closed with an almost equal turnover of EUR 1,641 million (2012: EUR 1,676 million). At EUR 130 million, the net profit was considerably higher than in 2012 (EUR 98 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.

Strategy

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.’

Dredging

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.

Offshore wind

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 so-called 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.’

Safety and sustainability

The 2013 safety statistics were the best in Van Oord’s history, with the company achieving its targets by a wide margin. Thanks to several years of consistent effort, accidents were reduced by a factor of three. ‘Despite these outstanding results, we think that it is possible to realise a further reduction in the number of accidents on projects and vessels. That’s why we decided to launch a new Safety Leadership Programme in 2014 and 2015.’

As a family-owned business, sustainability is important to Van Oord. In the past year, it recorded good fuel efficiency results, which had a positive impact on its CO2 emissions. ‘The new metering system on our trailing suction hopper dredgers showed that we can save even more on fuel’, says Pieter van Oord. ‘We will be introducing the system more widely in 2014. Also of note were our efforts at rehabilitating coral reefs.’

Investment

Van Oord took delivery of its second self-propelled cutter suction dredger, the Artemis, in 2013. The cutter has already been deployed successfully on a number of projects in Europe and Asia. There were further delays in the construction of offshore installation vessel Aeolus owing to problems at the Sietas yard in Hamburg, which has applied for a suspension of payments. The vessel should be operational by June 2014. ‘In 2013, we decided to act on our strategy of building offshore wind farms as an EPC contractor by investing in a large cable-laying vessel with a 5,000-tonne cable carrousel’, says Pieter van Oord. ‘The Nexus will be operational in early 2015 and we intend to deploy it on the Gemini project.’

Financing and shareholdings

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%.

Prospects for 2014

‘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 (Damen).’

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