Boskalis so far beats Covid-19
Despite the inevitable negative impacts of the pandemic and oil crisis combined, Boskalis is “cautiously confident” about the rest of the year now Covid-19 restrictions are stabilizing. The company ended the first quarter above expectations and counts on its record order book to keep the momentum going.
The Dutch contractor recorded a modest increase in revenue and operating profit and doubled its net cash position to EUR 57 million.
At the end of the quarter, Boskalis’ order book had decreased slightly compared to the record levels at the end of 2019 but still amounts to EUR 4.6 billion. There have been no project cancellations of substance, the company states.
The greatest operational challenge cause by Covid-19 is to relieve the crews on the vessels and project personnel due to global travel restrictions. “On a case-by-case basis tailored solutions are applied to ensure the continuity of business operations and the health of colleagues. A test procedure for Covid-19 has been developed in collaboration with the Travel Clinic of the Erasmus Medical Center in Rotterdam. This procedure is being applied successfully since a couple of weeks for the relief of crews”, Boskalis says.
The company’s Offshore Energy division recorded higher revenue and reduced its loss to a “slightly negative operating result’. Bosklais emphasizes that the first quarter is traditionally weak due to seasonal effects.
Several pipeline-related and decommissioning projects contributed to the division’s revenue while in the Offshore Wind business, the Subsea Cables department had a relatively busy quarter with the projects Ostwind 2, Triton Knoll and Borssele Beta in progress.
At Marine Transport, a part of the large vessels was well-occupied but the vessels in the spot market are dealing with challenging conditions. Boskalis is currently executing a large transport contract, delivering a gigantic fish farm from China to Norway for salmon producer Nordlaks.
In light of Covid-19, Boskalis has taken various measures to preserve its financially strong position. In early April the company announced that the capital expenditure for 2020 would be halved to EUR 200 million, that there will be no dividend payout for the financial year 2019 and that the share buyback program was suspended. The combined effect of these measures results in a positive cash flow effect of approximately EUR 320 million in 2020.
The company has also secured a new credit facility of EUR 500 million and combined with the available cash in hand, Boskalis has EUR 850 million available for unforeseen circumstances.