Boskalis Sees Profit Fall, Fleet Cuts on Weak Oil Industry

Photo credit: Boskalis

By Toby Sterling

AMSTERDAM, March 9 (Reuters) – Marine construction company Boskalis expects a drop in net profit this year as depressed commodity prices hit demand for oil-related infrastructure, it said on Wednesday.

Its shares fell 10 percent to 32.42 euros in early trading.

“Volumes and prices are under pressure, which is also translating into our order book,” Chief Executive Peter Berdowski said in a statement. “We are tightening up the fleet and the organization, and are alert to respond to the opportunities the market continues to present.”

Boskalis’s order book fell to 2.49 billion euros ($2.7 billion) at the end of 2015 from 3.29 billion in December 2014.

The company said it would respond by taking equipment out of service in its dredging and offshore energy divisions “with the associated implications for staffing levels.”

“In addition, we are taking a critical look at reducing the cost of the global office network,” it said.

Berdowski told reporters jobs lost would be in the “dozens, not hundreds.”

He said projects such as decommissioning ageing platforms and building infrastructure for offshore windmills continued to be bright spots for Boskalis, which he described as a “survivor” of the current downturn, given its low debt and profitability.

“We will see opportunities along the way, when companies are distressed, to profit from that,” he said.

Also on Wednesday, Boskalis revealed it had raised its stake in marine surveying firm Fugro, built gradually over two years, to 28.6 percent from 25.1 percent. That’s close to the 30 percent threshold that would force it to launch a takeover bid for all shares.

Fugro has repeatedly spurned any strategic cooperation with Boskalis: it says its customers demand clear separation between Fugro’s surveying work and companies such as Boskalis that will likely bid on resulting construction projects.

Berdowski said Boskalis “thinks Fugro is a very interesting company with activities that complement our portfolio brilliantly, and we will continue to seek a further and better cooperation.”

Boskalis posted 2015 earnings before interest, taxes, depreciation and amortization (EBITDA) of 885 million euros, ahead of expectations of 844 million among analysts polled for Reuters.

The outperformance was mainly driven by high utilisation rates at its dredging and salvage businesses.

($1 = 0.9113 euros) (Editing by Anand Basu and Mark Potter)

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