Boskalis Has Wind at Its Back

Royal Boskalis Westminster today reported that both revenue and operating profit were higher in the third quarter of 2016 than the average seen in the first two quarters of the year, with the increase wholly attributable to the contribution from the offshore activities acquired from VolkerWessels, which are consolidated with effect from the third quarter.

Image: Boskalis

The company said that market conditions remain persistently difficult both for its dredging business and for the capacity-driven service-related activities of its offshore energy unit, putting pressure on volumes and prices.

However, while the sharply contracting market and increased competition is putting increasing pressure on utilization and margins at the capacity-driven marine services activities, new opportunities are opening up in the offshore wind energy market, partly because of the offshore activities recently acquired from VolkerWessels, Boskalis said.

In the third quarter, Boskalis secured the contract for the construction of the Aberdeen Offshore Wind Farm (the European Offshore Wind Deployment Centre) as well as numerous smaller contracts. The company’s order book increased to EUR 2.9 billion, up 8% compared to end-June, with the increase wholly attributable to the addition of the offshore activities of VolkerWessels.

Excluding the contribution from the VolkerWessels activities, revenue and the result of Boskalis’ offshore energy business were slightly lower compared to the average seen in the first two quarters of the year.

Looking beyond the third quarter, it looks like offshore wind will continue to be the one bringing more work for the company, since Boskalis’ daughter company VBMS and NKT Cables won a contract from TenneT a couple of days ago, under which they will supply and install two export cables for Borssele I & II offshore wind farms. The contract value of VBMS’ share is approximately EUR 70 million.

Fleet rationalization program begins, 200 employees already laid off

Nevertheless, good opportunities within the offshore wind sector have no impact on Boskalis’ fleet rationalization program, announced at the beginning of July, which will take 24 vessels out of service and result in 650 employees losing their jobs over the next two years.

The company started with the implementation of the program this month.

Of the announced reduction affecting 650 jobs, the workforce has already been reduced by more than 200 jobs.

The timing of the remaining workforce reduction is partly dependent on factors including the current deployment of vessels and national legislation, the company explained.