UPDATE 1-Oil Storage Firm Vopak Misses Expectations for Quarterly Core Profit
04.22.2021 - NEWS

April 22, 2021 [Reuters] – Vopak on Wednesday posted a first-quarter core profit that fell short of market expectations, hurt by a weaker dollar and tight chemical markets, but the Dutch oil and chemical storage company stuck to its investment outlook.

 

The group now expects EBITDA contributions from 2020 and 2021 growth projects to be at the higher end of the 30 million euros ($36.08 million) to 50 million euros ($60.14 million) range.

Vopak had a proportional occupancy rate of 89% at the end of March, up from 86% a year ago, reflecting improved demand.

The group, which operates tank terminals around the world, reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of 200.4 million euros ($240.98 million) in the three months to March, missing analysts’ average estimate of 211 million euros.

Vopak, which made about 35% of its 2020 revenue from oil terminals, has benefitted from soaring demand for oil storage as buyers struggle to find space for surplus crude during a global economic slump triggered by the COVID-19 pandemic.

The pandemic-induced restrictions, however, have caused project delays, while travel curbs have disrupted the group’s expansion plans.

The Rotterdam-based company confirmed its investments in new capacity should amount up to 300-350 million euros in 2021, with the group returning to more normal levels of investment following a record high 525 million euros in 2020.

The company, which has been reducing the share of oil storage in its portfolio in favour of chemicals, industrial terminals and gas, expects its greenfield industrial terminal in Qinzhou in China, with an initial capacity of 290,000 cbm, to start operations in the second quarter.

Vopak, which made its first investment in solar and hydrogen energy in 2019, reiterated in March that the majority of growth investments would be allocated towards industrial, gas and new energies infrastructure. ($1 = 0.8314 euros).

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