Boskalis: record year 2008
March 18, 2009
Highlights 2008
Net profit rises to 249.1 million
Net profit excluding exceptional items up 15% at 235.7 million
Record revenue 2.1 billion: +12%
Order book steady at high level: 3.4 billion
Earnings per share 2.90; dividend per share 1.19
Outlook 2009
Well-filled and broadly spread order book provides solid basis
2009 earnings expected to be lower than 2008 record level
Royal Boskalis Westminster N.V. achieved a net profit of 249.1 million in 2008 (2007: 204.4 million). Net profit excluding exceptional items rose 15% to 235.7 million in 2008. Revenue was 2.1 billion, up 12% from 2007 ( 1.9 billion), and was widely spread, both geographically and across all market segments.
Net profit was affected by three exceptional items which, on balance, had a 13.4 million positive effect after tax:
a 92.1 million one-off gain resulting from the settlement of the insurance claim for the W.D. Fairway;
a 35.3 million impairment charge recognized on the stake in Smit Internationale N.V.; and
a negative hedge result of 43.5 million.
In 2008 Boskalis won new orders worth 2.3 billion. In addition, the order book was cleared of projects that are no longer expected to be executed or are expected to suffer significant delay. This resulted in the removal of around 450 million worth of revenue from the order book, including all projects in Dubai. Despite this adjustment, high revenue levels in 2008 and the economic stagnation, the order book remained at the high level of 3.4 billion.
Peter Berdowski, CEO:
2008 has been the best year in our history, with record revenue and profit. We were able to reap the fruits of the strategy we pursued in previous years. However, 2008 was also a year with two faces. A year in which the first half was characterized by boisterous market growth, while the final quarter saw the global economic stage - and with it the landscape of the dredging industry - change drastically. On a positive note, amidst all these developments our order book is well-filled and broadly spread, resulting in sound fleet utilization levels for 2009 and even part of 2010."
Market developments
The global dredging and maritime infrastructure market is driven by factors such as growth in world trade, the global population, energy consumption and the effects of climate change. All these factors have undergone a period of unbridled growth in the past few years.
This growth trend continued in the first half of 2008. The price of oil rose to an unprecedented level and the prices of iron ore and other natural resources also continued to rise strongly. Growing demand for energy and natural resources propelled the need for dredging projects for the oil and gas industry and the development of new ports.
These positive market conditions changed radically in the final quarter of 2008. Even though long-term structural growth factors for dredging and maritime infrastructure remain strong, a great deal has changed for the short term. The price of oil has dropped sharply, demand for natural resources has plummeted and global trade is stagnating. All these factors are affecting demand for our products and services.
Outlook
After years of boisterous growth we are set for a period of stagnation. Boskalis is entering this period with a well-filled and broadly spread order book, resulting in sound fleet utilization levels for 2009 and even part of 2010. This gives Boskalis the time and flexibility to proactively streamline the organization for these changed market conditions. Measures under consideration in this context include the decommissioning of older ships and tightening the overall cost structure.
Boskalis financial position is extremely sound, meaning that the company will be able to finance planned investments - amounting to around 200-250 million per year mostly from its own cash resources in the coming years.
As in previous years, we are unable to provide a specific forecast for the coming year due to the project-based nature of our work. We do, however, anticipate that 2009 earnings will be lower than the record levels achieved in 2008.
Dividend policy
The main principle underlying Boskalis dividend policy is to distribute 40% to 50% of net profit from ordinary operations as dividend, while achieving a stable development of the dividend. In choosing the form in which the dividend is to be distributed, Boskalis considers both the desired balance-sheet structure and the interests of shareholders.
In light of the current economic conditions, Boskalis has a preference for distributing dividends entirely or partly in shares for the next few years. It will therefore be proposed to the Annual General Meeting on May 14, 2009 that a dividend of 1.19 per share will be paid in ordinary shares, unless the shareholder opts for a cash dividend. The dividend will be payable from June 10, 2009.
Royal Boskalis Westminster nv, press release
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