February 15, 2024 [Nasdaq]- Tank storage firm Vopak VOPA.AS on Wednesday forecast full-year core profit of between 880 and 920 million euros, excluding exceptional items, after posting 2023 earnings roughly in line with its target, helped by sustained demand for storage including oil, chemicals and green energy.

The Dutch company, which operates terminals and storage facilities worldwide, said the new forecast factors in the impact of divestments last year in the Netherlands and the United States, as well as “uncertainty and volatility in storage demand indicators across the business”.

The group also announced a share buyback program of up to 300 million euros ($321 million) and plans a cash dividend of 1.50 euro per share, a 15% increase on the previous year.

The targets and shareholder returns were welcomed by the market, with Vopak shares jumping more than 8% by 0830 GMT.

Vopak is focusing on expanding its gas and industrial terminals to boost cash returns and shed less profitable assets in an oversupplied chemicals market.

“We divested for over half a billion (euros) in terminals and obviously, that will have an impact on the EBITDA result for 2024 versus 2023,” said CFO Michiel Gilsing.

However, including investments in its joint ventures, Vopak expects what it calls proportional EBITDA, which includes all its economic interests, to be stable compared to last year, in a range of 1.12 billion euros to 1.17 billion.

For 2023, it reported a 9% rise in earnings before interest, tax, depreciation and amortisation (EBITDA) of 964 million euros, close to a company forecast of around 970 million euros.

Asked about possible benefits from the instability in the Middle East, which stretched energy supply routes, finance chief Gilsing said that the group sees “quite an active bunker market”.

Vopak’s oil terminals are running close to full capacity, but it’s easier to renew contracts going forward, Gilsing added.

In the U.S., where the group invests in renewable energy storage but still has small exposure, Vopak still sees green energy gaining ground despite uncertainty surrounding the outcome of the presidential election.

“I think all companies have to prepare for potentially quite a rocky ride on what is going to happen. Is it easy to prepare for it? No,” Gilsing concluded. ($1 = 0.9348 euros)

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