Highlights for HY1 2017:

• EBITDA -excluding exceptional items- decreased (6%) to EUR 394 million, adjusted for the divestments early 2016, the pro forma EBITDA decreased by 4%
• Total capacity of announced new growth projects amounts to 387,000 cbm. In addition, Vopak will expand Pengerang oil terminal in Malaysia with 430,000 cbm and Alemoa terminal in Brazil with 44,900 cbm
• Efficiency program to reduce Vopak’s future cost base with at least EUR 25 million by 2019 is well underway; decisions are taken to further streamline the divisional structure

Exceptional items for HY1 2017:

• There were no material exceptional items in the first half of 2017. The large exceptional profit in the first half of 2016 related mainly to the divestment of the UK assets

Looking ahead:

• For 2017, we expect to realize an average occupancy rate of around 90% (2016: 93%). Taking into account the lower occupancy rates, additional costs related to investments in growth and technology, the missing contributions from the divested terminals early 2016 and the foreign currency exchange developments in 2017, we expect that the 2017 EBITDA will be 5-10% lower than the 2016 EBITDA (EUR 822 million)
• We are on track with the timely completion of the current projects under construction (3.2 million cbm), of which most are backed by commercial storage contracts, and the successful realization of the efficiency program
• Supported by solid operational cash flow generation, a strong balance sheet and sufficient financial flexibility, Vopak will continue its capital disciplined long-term growth journey, while maintaining on average a Cash Flow Return On Gross Assets after tax (CFROGA) between 9-11% for the total portfolio in the period 2017-2019 

Royal Vopak Chief Executive Officer Eelco Hoekstra commented:

“Although our EBITDA is lower compared to last year, I am encouraged with the ongoing transition of our global portfolio. While focusing our business development efforts more on projects related to chemical and industrial terminals, and terminals facilitating the global gas markets, including our ambitions to strengthen our presence as a service provider in the LNG infrastructure market, we are still pursuing oil related opportunities in emerging countries.

HY1 2017 EBITDA -excluding exceptional items- of EUR 394 million reflects a positive market sentiment in the Americas and a stable business environment for our terminals in Asia and EMEA, while the market environment in the Netherlands has weakened compared to 2016.

Although we cannot influence the supply and demand of commodities in a business environment characterized by increasing competition, geopolitical developments and volatility in the energy and financial markets, we can influence the quality of our capital investments, lowering operating costs and improving our service. We continuously seek to improve our safety and sustainability performance, while stepping up the quality of our operations and increasing productivity, supported by the application of new technologies. This will help reduce Vopak’s future cost base with at least EUR 25 million in the 2017-2019 period.

In order to support the successful realization of our 2019 ambitions, we have defined several actions throughout the various levels of the organization, from further streamlining the divisional structure of the company to simplifying processes, thereby improving the ease of doing business with Vopak.

The outcome of these efforts will help deliver better value for money to our customers, thereby strengthening our competitiveness.

The coming years will be another exciting period in which we want to further improve our leadership position and I believe that despite the lower results in 2017 the current profile of the company, taking into account the solid operational cash flow generation, strong balance sheet and sufficient financial flexibility, provides an excellent platform to continue our long-term focused capital disciplined growth journey.”

HY1 2017 events:

● On 17 February 2017, Vopak and its partner Reatile announced that they will expand their activities in South Africa. The expansion comprises two projects; a) a new 100,000 cbm inland terminal in the Gauteng province (Johannesburg) connected to Vopak Terminal Durban via the Transnet Multi Product Pipeline and b) an expansion of Vopak Terminal Durban with 130,000 cbm

● On 19 April 2017, Vopak announced that it will expand its wholly-owned terminal in Alemoa, which is located in Brazil’s Port of Santos, Latin America’s largest port. The expansion will add 16 new tanks with a capacity of 61,000 cbm. In addition, five additional truck loading bays will be constructed that are designed to handle up to 130 additional trucks per day. The expansion is expected to be commissioned in Q2 2019

● On 26 April 2017, after careful consideration, Vopak and Exmar jointly concluded that the closing of the envisaged acquisition by Vopak of Exmar’s participation in FRSU assets would no longer be pursued. The finalization of the deal was subject to consent and cooperation of multiple stakeholders, which was not realized

● On 6 May 2017, Royal Vopak and AltaGas Ltd. (AltaGas) announced that they have entered into a joint venture agreement and will invest together in the development of the Ridley Island Propane Export Terminal (RIPET). RIPET will be the first propane export facility off the west coast of Canada. The project is to be designed to ship 1.2 million tonnes of propane per annum, with approximately 96,000 cubic meters of storage capacity. The facility is expected to be commissioned in Q1 2019. Vopak has a 30 percent interest in RIPE

Subsequent events:

● On 21 July 2017, it was announced that Gasunie LNG Holding B.V., Oiltanking GmbH and Vopak LNG Holding B.V. have acquired the approval under the EU Merger Regulation to establish a joint venture for owning and operating a liquefied natural gas (LNG) terminal in Northern Germany. This decision is a milestone within the feasibility study the companies are currently conducting

● On 18 August 2017, it was announced through a separate press release that Vopak and its joint venture partners have the intention to expand their independent storage terminal (PITSB) in Pengerang, Johor in southern Malaysia. PITSB will be expanded with 430,000 cbm to a total capacity of 1.7 million cubic meters.The expansion is expected to be commissioned Q1 2019

● On 18 August 2017, Vopak announces that it will further expand its wholly-owned terminal in Alemoa which is located in the Port of Santos, Latin America’s largest port. This expansion is in addition to the expansion announced on 19 April 2017. The expansion will add another 44,900 cbm to Vopak’s Alemoa Terminal. The total capacity of the terminal after the expansion will be 279,900 cbm. The investment is underpinned by long-term customer contracts and is expected to be commissioned in Q2 2019

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