30% higher profit for Van Oord

Rotterdam, (PresseBox) - .

- Turnover steady (EUR 1,641 million) 
- Net profit 30% higher (EUR 130 million) 
- Order portfolio (excl. Gemini) remains at level (EUR 1.9 billion) 
- Strategy based on three core activities: dredging, offshore oil & gas, and offshore wind 
- Volume of activity stable in dredging market 
- Financial close of Gemini offshore wind farm project expected in April 
- Sufficient financial leeway for new investments 
- KNPC awarded large dredging project (appr. EUR 500 million) in Kuwait (separate press release)

Turnover and results

Van 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.'

Activities

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 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.'

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.'

Appendices:
- Van Oord in operation
- Facts and figures 2013 Film clip showing 2013 highlights available at www.vanoord.com.

Appendix: Van Oord in operation

Dredging

Projects

Netherlands

Van Oord is involved in a number of interesting projects as part of the Netherlands’ Room for the River flood protection programme. The Munnikenland project is meant to protect the area south of the river Waal from flooding. The project commenced in 2013 and will run until late 2015. Van Oord is removing soil from the Meinerswijk floodplain near Arnhem to allow excess river water to be distributed and discharged more efficiently. The project will be completed in 2015. Van Oord is also active along the Dutch coast. In late 2013, the company and its consortium partners were contracted to construct shoreline defences and carry out 20-year maintenance on the Hondsbossche Seawall. The project involves creating nature conservation and recreational areas.

Europe

Van Oord commenced work on extending a jetty in Constanta, Romania’s main port city. In addition to dry earth-moving equipment, it will deploy backhoes and a side-stone dumping vessel, produce its own concrete blocks and install them as jetty protection. Van Oord has also been contracted to protect and replenish four beaches in Constanta. It will design and construct various groynes and then replenish the beaches with sea sand.

Americas

The Port Authority of Barranquilla, Colombia, awarded Van Oord a contract to dredge its mooring facilities. The company will continue work on this project in 2014. After careful preparation, APMT awarded Van Oord and its consortium partners the contract to construct a new container terminal in Moín, Costa Rica. In addition to the dredging work for the port facilities, the consortium will be reclaiming 40 hectares of land and constructing a 1.5 kilometre-long breakwater. Van Oord will deploy a cutter suction dredger, a trailing suction hopper dredger and various types of rock installation equipment. The project will be carried out over a three-year period.

Asia

Van Oord has been very active in Indonesia. The Tanjung Priok port expansion project commenced in 2013; this is part of a larger plan. Within the context of the Kapuk Naga Indah development plan for Jakarta, Van Oord was involved in constructing a polder island. Construction was put on hold owing to a delay in the licensing procedure. Van Oord is maintaining the access channel to Bengkulu port on the island of Sumatra. It has also taken on a land reclamation project in Surabaya for its port expansion programme.

Middle East

Van Oord began constructing two artificial islands, Bluewaters and Island 2, for Meraas in Dubai, UAE. Both islands will be linked to the mainland by a road. Island 2 will accommodate private housing and leisure properties, and Bluewaters will be the site of a futuristic amusement park. Van Oord also extended and maintained a number of beaches on Palm Jumeirah in 2013.

Offshore oil & gas
Projects

Van Oord’s new shallow-water pipelay barge, the Stingray, was active in Ulsan, Korea. Under contract to Daewoo, it pulled a 42-inch pipeline over a length of more than 3 km. The Stingray’s next project was in Taiwan, where it pulled a pipeline over a length of almost 5 km. Van Oord was also responsible for dredging the trenches and for landfall on both projects. The company took on a project in Cabiúnas, Brazil in late 2013 in which the Stingray will install a 24-inch gas pipeline over a length of 18 km for Saipem; the work will commence in spring 2014.
Van Oord’s flexible fallpipe vessels were active mainly on numerous North Sea projects in early 2013. In Taiwan, Van Oord stabilised a key gas pipeline and installed scour protection. It carried out rock-installation work with a flexible fallpipe vessel on the Gorgon project in West Australia for Chevron. Norwegian oil company Statoil awarded Van Oord various contracts going into 2014. These projects will involve installing rock at depths ranging from -400 m to -600 m.

It was once again active in the Bay of Baydaratskaya near Jamal, Russia, where it dredged and backfilled pipeline trenches. In late 2013, ExxonMobil contracted Van Oord to construct an Excavated Drilling Centre in the Hebron oil field off the coast of Newfoundland, Canada. The work will be carried out in 2015 at a depth of more than -100 m.

Offshore wind
Projects

Van Oord successfully fulfilled its contract to construct 27 foundations and the electrical infrastructure for the 62 MW Teesside wind farm in the United Kingdom.
In consultation with its client, Van Oord decided to deliver part of the DanTysk wind farm project in the German Bight.
The construction of an offshore wind farm is a lengthy process. In 2013, Van Oord worked on the engineering and procurement for the Luchterduinen and Gemini projects. Work will commence on the Luchterduinen project – a wind farm located 23 km off the Dutch coast – in mid-2014. The project should be completed in the second half of 2015.

Important decisions were taken in 2013 concerning the Gemini wind farm, which will be located north of the West Frisian island of Schiermonnikoog. The majority investor is Canada’s Northland Power Inc. Van Oord will have a 10% stake in the project. The EPC contract has been awarded to Van Oord and Siemens will supply the turbines. The shareholders are working to reach financial closure, including the project financing by the banks. The project is expected to reach financial close in the spring of 2014.

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