April 27, 2020 [Reuters] – Company says oil storage tanks almost at full capacity. Sees growth-focussed investments at high end of range. All terminals operational; limited virus impact so far.

 
Vopak’s oil tanks are almost full as the Dutch company benefits from a drop in demand and prices for crude which has left producers and traders scrambling to find storage.

The oil and chemical storage company said on Tuesday it expected to feel the full benefit of the pick up in its oil tank business in the second quarter, as it reported a small rise in adjusted core earnings for the first three months of the year.

U.S. oil futures collapsed below $0 per barrel on Monday for the first time in history, with traders effectively paying buyers to take crude off them as they struggle to find places to store a huge surplus that has built up during lockdowns across the world to tackle the coronavirus pandemic.

“At end of March we saw the commercial activity pick up significantly and you will see the occupancy on commercially available oil assets pick up in the second quarter,” Gerard Paulides, Vopak’s chief financial officer, told Reuters.

Paulides added the company’s available capacity in oil storage was full, with the exception of a new fuel facility in Panama that was filling up quickly.

The company, which operates tank terminals around the world, said it had seen limited impact on its own operations from the coronavirus outbreak so far, with all its 66 terminals operational, though that could change in the future.

The company said the pandemic posed challenges, such as causing potential delays to projects, and added a long-term recession would also be a risk. Nonetheless, Paulides said Vopak expected to reach the higher end of its 300-500 million euro target range for growth-focused investments this year. Vopak’s shares were last up 0.2% and have gained about 5.8% so far this year, outperforming European stocks by around 25%.

Adjusted for divestments and currency moves, first-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 3 million euros to 200 million.

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