Boskalis has a record amount of work in the pipeline despite the impact of Covid-19. The value of the company’s order book stands at EUR 5.3 billion euros at the end of last year, reflecting an increase of more than 12% compared to last year. 

A big contribution was made at the end of the year when Boskalis was awarded a mega-project in the Philippines, developing the land for the all-new Manila airport. The project has an estimated value of EUR 1.5 billion, which makes it the largest contract ever for the offshore contractor. “This contract provides visibility for the utilisation of the large hoppers for the coming years”, says CEO Peter Berdowski.

Dredging takes a beating

Nevertheless, the Covid-19 pandemic has had far-reaching consequences for Boskalis. The prolonged disruptions for international air travel and stringent quarantine measures affected projects outside Europe, particularly in the Dredging division. In the Offshore Energy division mainly the services activities suffered from the unexpected sharp fall in the oil price, resulting in a drop in demand in parts of the offshore market.

In the Dredging & Inland Infra segment, revenue decreased by 13% at a lower profit margin.  The pandemic caused delays in some major projects and, in addition, global travel restrictions and quarantine measures led to operational inefficiencies. The largest revenue contribution came from projects in Southeast Asia, the Indian subcontinent, the Middle East, Canada and the Dutch market.

Revenue from Offshore Energy increased by more than 4%. Contracting revenue was virtually stable with a busy year at Seabed Intervention. Over the past year, Services was impacted most by the strong decline in the oil price. The divisional operating result improved significantly, with good project results at Seabed Intervention and Subsea Cables, a positive contribution from Marine Transport Services and the consolidation of Horizon, a marine survey company acquired at the end of 2019.

In the Towage & Salvage segment, Salvage had an excellent year with substantially higher revenues and good results on projects in the Indian and Atlantic Ocean and in the Arctic near Spitsbergen. The contribution from the Towage joint ventures was lower, but this was more than offset by Salvage’s good result.

In total, Boskalis’ turnover fell by 4.5% in 2020 to EUR 2.5 billion as a result of the pandemic and the lower oil price. Net profit amounted to  Last year’s profit amounted to EUR 90 million.

Covid crisis plan

“Exactly twelve months ago, we confidently presented our new three-year business plan. A couple of days later, we sailed into the thick corona fog and many certainties fell away”, says Berdowski. “We immediately drew up a crisis plan in which the safety of our colleagues was paramount.”

He adds: “Besides the health of our colleagues, business continuity was a key priority. Projects had to continue as much as possible, vessels had to keep running and cash flows had to be maximised. We managed to provide relief to the projects and vessels through various creative solutions. We set up our own test facilities and, where necessary, organised our own chartered flights allowing us to move thousands of colleagues around the world. We have provided support to homeworkers and are doing all we can to make mandatory quarantine periods bearable. Looking back on all these challenges, it is all the more impressive what we achieved together in 2020.”

Outlook

The company states it is in good shape with its very well-filled order book and strong financial starting position. Nevertheless, in view of the project-based nature of a significant part of its activities and the uncertainties related to Covid-19, it is difficult at this early stage of the year to make a specific quantitative statement about the projected annual result for 2021. The well-filled order book however offers a solid basis to match the EBITDA level of 2020.

This article was first published on SWZ|Maritime, a sister publication of PCJ.