Boskalis feeling the effects COVID-19 in Q3

In: Corporate

Royal Boskalis Westminster N.V. (Boskalis) issued a trading update for the third quarter. The Dutch dredging and heavylift company Quarterly revenue was virtually stable compared to the quarterly average of the first half year, also adjusted for currency effects, acquisitions and divestments.

The company stated that the effects of the COVID-19 pandemic continue to be felt. While it was already challenging to keep projects operational outside Europe, it has also become increasingly complicated to do this within Europe.

At the end of September, Boskalis' order book stood at EUR 4.4 billion, slightly lower than at the end of June. Contracts worth over EUR 0.3 billion were acquired in the third quarter. Clients in many cases are still moving ahead with tendering procedures for new projects,  however due to COVID-19 these processes take longer than usual.

The company's position has been strengthened in the course of the third quarter with an increase in the net cash position to more than EUR 250 million.

Within the company's Offshore Energy segment,  the third quarter proceeded well and the revenue increased compared to the preceding two quarters. Within the contracting cluster there was a particularly strong contribution from Seabed Intervention. For Heavy Lifting and the offshore wind activities several projects were delayed due in part to COVID-19, resulting in the deferral of revenue and vessel utilization to later this year and 2021.

Within the services cluster a combination of the low oil price and COVID-19 related delays and disruptions adversely affected Marine Transport & Services.

Subsea Services and Marine Survey in the third quarter revenue increased compared to the first half year. Marine Survey has been particularly busy in recent months with campaigns along the US east coast for the development of offshore wind farms.

The utilisation of the heavy transport vessels and crane vessels was at a lower level compared to the first half of the year, whilst the utilisation of the diving support vessels, survey, cable-laying and fallpipe vessels was stable or higher.

A large number of smaller contracts were acquired during the quarter. In addition to variation orders this involved the contract for the transport and installation of five large floating wind turbines for
the Kincardine wind farm off the coast of Aberdeen in Scotland and the installation of bridge sections for the world’s longest suspension bridge, the Çanakkale 1915 bridge in Turkey. On balance, the Offshore Energy order book decreased to EUR 1.3 billion compared to mid-2020.

Based on the fleet planning and projects in the order book and barring unforeseen circumstances, the Board of Management for Boskalis expects that the 2020 EBITDA, adjusted for the extraordinary charges taken in the first half of 2020, will match the level achieved in 2019 of EUR 376 million.

Capital expenditure in 2020 is expected to amount to approximately EUR 220 million, including dry dockings. This projection does not include any acquisitions, such as the purchase of the remaining interest in Horizon earlier this year.

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