Royal Boskalis Westminster N.V. Targets Cuts in Lower End of the Transport Fleet

At the Top End – Bokalift 1 – from the home page of Boskalis.com

Date 17 August 2017

The H1 2018 figures for Royal Boskalis Westminster N.V. showed a net loss of €361.4 million, compared to a net profit of EUR 75.1 million in the same period last year. The Offshore Energy division and specifically the low end of heavy lift transport side, is where this market is slipping further into the red, and loosing heavily.

They have identified the drop in this sector as being attributed largely to the decline at offshore services and not with contracting activities which have remained stable, supported by cable laying and seabed intervention projects.

The top end of the transport market remains active with many opportunities still existing, whereas vessels employed in the low end, mainly older vessels, are facing heavy competition predominantly from Asia and not related to the more interesting oil and gas market.

The company stated this part, the low end of the market, “is at the lower end of the S curve and is not strategically interesting for Boskalis. Therefore, Boskalis has decided to exit this market segment and take the closed-stern heavy transport vessels (types IIb and III) out of service. This will result in a structural improvement in the operating result of more than EUR 25 million on an annual basis.”

The vessels identified include the 53,000t class Suezmax vessels built in the early 1990’s that were converted in 2008 by Cosco Shipyards for Sealift which later merged with Dockwise. At the time of conversion, the vessels were considered by the classification authorities to have an economic life of around 10 years, resulting in a remaining economic life of 20 years. The remaining identified vessels, Swan, Swift and Teal, were all purpose built in the early 1980’s.

Peter Berdowski, CEO of Boskalis, said: “We have reviewed our position there and have decided to fully exit this loss-making market segment that offers no prospects for improvement. With the lower end of the transport fleet we are slipping down further in the market and we are unable to add sufficient value. This is in contrast to the upper end of the fleet where we are distinctive, especially in combination with our other vessels and activities – fully in line with our strategy.

“Looking ahead we are moderately optimistic. At Dredging we have a well-filled order book and see interesting and sizable projects across the market. In Offshore Energy we expect to see improved results at the contracting activities as well as at services as a result of the fleet reduction.”

The overall financial condition of the company continues to be strong, with a solvency ratio of 56.2% and a modest net debt position of EUR 239 million. Their order book, excluding their share in the order book of joint ventures and associated companies, increased to EUR 3.89 billion at the end of the first half of the year, up from EUR 3.50 billion at year end, 2017.