Van Oord reported a decline in its 2016 revenue and net profit amid challenging dredging and offshore oil & gas markets. However, same as other similar companies, Van Oord said it sees opportunities for growth in the offshore wind sector.
Overall, Dutch dredging and marine contractor’s revenue was at EUR 1.71 billion last year, down from EUR 2.58 billion in 2015, with net profit decreasing to EUR 90 million from EUR 169 million in the year earlier. On the other hand, the company informed its order portfolio has grown and stood at approx. EUR 3.3 billion at year-end, up from EUR 2.3 billion in 2015.
Last year, offshore wind projects generated EUR 394 million in Van Oord’s revenue, compared with EUR 715 million in 2015. This decline is mainly attributed to the Gemini offshore wind farm, which was completed in 2016. In dredging, revenue was at approx. EUR 1.2 billion in 2016, down from EUR 1.6 billion in 2015, and the offshore oil & gas division’s revenue of EUR 130 million is considerably lower than the EUR 242 million reported for 2015, due to deteriorated market conditions.
“Worsening conditions in the dredging and offshore oil and gas markets put revenue and margins under pressure. The downward trend has many different causes: the completion of major projects, the low oil price, slower growth in world trade and overcapacity of dredging and offshore equipment. Market conditions in the maritime sector were extremely difficult in 2016,” said Pieter van Oord, CEO of Van Oord.
As for the robust order book, the company said its growth is largely due to offshore wind projects, including Borssele III & IV in the Netherlands and Norther in Belgium, along with major dredging projects. Van Oord acquired new projects valued at approx. EUR 2.6 billion in 2016, compared to EUR 1.7 billion in 2015.
Since many of these new projects will be executed in 2018 or later, they will not contribute to its revenue in the short term, the company said, adding that it expects 2017 to be a challenging year, with the harsh market circumstances in dredging and offshore oil & gas markets continuing to affect its business.