Vopak makes around a quarter of its operating profit from the storage and throughput of chemical products. Its clients include big chemical producers, whose business has been hit by depressed orders due to cutbacks in overall spending.As a result, Vopak’s chemical business has in the past year been lagging its oil storage unit, which has proved resilient in the current economic downturn.
“The slump in demand has led to a cut in capacity resulting in less volumes for transport”, De Kreij said. “Chemical manufacturers are now increasing capacity again, but they’re still operating at low levels. The market remains fragile.”
De Kreij’s comments echo recent statements from chemical manufacturers like Germany’s BASF SE (BAS.XE) and Netherlands-based Royal DSM NV (DSM.AE), who have said that a market recovery will be slow and shaky.
Still, Vopak Thursday raised its full-year outlook for the second time this year as it continues to benefit from strong demand for oil storage, the firm’s key business.
Vopak is a prime beneficiary from global imbalances between production and consumption of oil, which boosts demand for transport and storage facilities. Global oil inventories have risen over the last year as the economic slowdown trimmed demand for oil and refined products.
The Rotterdam-based company now expects earnings before interest, tax, depreciation and amortization, or Ebitda, to be at least EUR510 million for the year, up from the previous EUR495 million.
Vopak hasn’t been too conservative in its earlier forecasts, De Kreij emphasized. “I don’t believe we have been too cautious as there was a lot of insecurity at the beginning of this year”, he said. “But we’re encouraged by a number of contract renewals and we managed to keep our occupancy rates at high levels despite all the insecurities.”
De Kreij refrained from giving guidance for 2010, however. “We have a good starting position for next year, although it’s too early to give an outlook at this stage. But we have an undiminished optimistic view on the long term”, he said.
Vopak makes around a quarter of its operating profit from the storage and throughput of chemical products. Its clients include big chemical producers, whose business has been hit by depressed orders due to cutbacks in overall spending.As a result, Vopak’s chemical business has in the past year been lagging its oil storage unit, which has proved resilient in the current economic downturn.
“The slump in demand has led to a cut in capacity resulting in less volumes for transport”, De Kreij said. “Chemical manufacturers are now increasing capacity again, but they’re still operating at low levels. The market remains fragile.”
De Kreij’s comments echo recent statements from chemical manufacturers like Germany’s BASF SE (BAS.XE) and Netherlands-based Royal DSM NV (DSM.AE), who have said that a market recovery will be slow and shaky.
Still, Vopak Thursday raised its full-year outlook for the second time this year as it continues to benefit from strong demand for oil storage, the firm’s key business.
Vopak is a prime beneficiary from global imbalances between production and consumption of oil, which boosts demand for transport and storage facilities. Global oil inventories have risen over the last year as the economic slowdown trimmed demand for oil and refined products.
The Rotterdam-based company now expects earnings before interest, tax, depreciation and amortization, or Ebitda, to be at least EUR510 million for the year, up from the previous EUR495 million.
Vopak hasn’t been too conservative in its earlier forecasts, De Kreij emphasized. “I don’t believe we have been too cautious as there was a lot of insecurity at the beginning of this year”, he said. “But we’re encouraged by a number of contract renewals and we managed to keep our occupancy rates at high levels despite all the insecurities.”
De Kreij refrained from giving guidance for 2010, however. “We have a good starting position for next year, although it’s too early to give an outlook at this stage. But we have an undiminished optimistic view on the long term”, he said.