Feed-back analysts meeting
Yesterday, Boskalis released its FY13 results hosting an analysts meeting at 11:30 CET in Amsterdam. Next to FY13 results, management presented its business plan for 2014-16.
Over 2014-16, Boskalis intends to invest approximately € 800m, of which € 300m in FY14. Boskalis especially sees expansion potential in Offshore Energy, while at the same time it will defend its market position in Dredging and Towage.
For the next couple of years, Boskalis has identified € 56bn of potential new dredging projects. The bulk (€30bn) is related to port developments worldwide. Land reclamation and coastal protection projects are estimated at potentially € 10bn, oil & gas at € 9bn, the balance being other dredging projects. The global picture is little changed from previous publication and as always timing of these potential projects remain difficult to forecast. With regards to the market balance, Boskalis estimates current excess hoper capacity (in cbm) at about 20%, however mainly affecting the mega trailer segment. With most players having completed their fleet expansion programs, further capacity growth is expected to remain limited.
With regards to Singapore, DEME recently acquired the Jurong extension project. Next is the mega port development at Tuas. Tenders for the first two phases have been launched with Boskalis tendering in joint venture with Penta Ocean, Huyndai and Samsung. The first phase is estimated at about $ 1bn with the bulk non-dredging work (85%), the second phase is estimated to be significantly larger ($ 3bn) with a slightly higher dredging component (20%). On the analysts meeting, management indicated that its consortium was the lowest on price for the first phase.
With regards to Offshore Energy, Boskalis identified potential projects at approximately € 60bn with significant potential in the North sea region. Outlook for Dockwise markets is said to have improved recently.
With regards to future investments in Offshore Energy, Boskalis is both considering ordering newbuilds to acquiring existing tonnage (recent acquisition of 5 Faimount AHTs). Special mentioning was made of Multifunctional Construction Support Vessels (CSVs) as well as lifting capabilities (1 – 2 kMT). While not yet decided, Boskalis did not exclude ordering a second Type 0 semi-submersible vessel (in that case, probably larger than the Vanguard).
Conclusion:
Boskalis positively surprised with a lower-than-expected net financial debt also announcing capital returns via share buy-backs. The new business plan 2014-16 does build upon the previous plan, hence no revolution. Focus is mainly on Offshore Energy while defending its market position in Dredging and Towage. Accumulate rating and € 42 price target maintained.
