Vopak reports FY 2023 and Q4 2023 financial results
The Netherlands, 14 February 2024
Vopak reports strong FY 2023 results, announces substantial progress on strategy execution and increases shareholder distribution
Key highlights FY 2023
Improve
EBITDA in FY2023 increased to EUR 964 million, proportional EBITDA to EUR 1,154 million and operating cash return to 14%
Reduced our CO2 footprint by 25% compared to our baseline of 2021 and further improved our safety performance
Actively managed our portfolio with strategic divestments completed and EUR 523 million proceeds received
EPS increased by 40% to EUR 3.29, dividend of EUR 1.50 per share announced, a 15% increase compared to 2022 and up to EUR 300 million to be returned to shareholders via a share buyback program
Grow
Expanded our open access LNG capacity in the Netherlands to support energy security
Strengthened our leading position in India
Solidified our leading industrial terminal position with investments in Singapore, China and the United States
Accelerate
Commissioned repurposed infrastructure in the United States and Singapore for low-carbon transportation fuels
Expanded capacity in the Netherlands and Brazil for feedstock for low-carbon transportation fuels
Entered into the electricity storage sector in the United States, expected to be operational in the course of 2024
Q4 2023 | Q3 2023 | Q4 2022 |
| In EUR millions | 2023 | 2022 |
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352.8 | 352.0 | 355.3 |
| Revenues | 1,425.6 | 1,367.0 |
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| Results -excluding exceptional items- |
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228.8 | 240.5 | 227.8 |
| Group operating profit / (loss) before depreciation and amortization (EBITDA) | 963.5 | 887.2 |
150.2 | 158.2 | 150.3 |
| Group operating profit / (loss) (EBIT) | 640.5 | 547.3 |
109.0 | 97.3 | 88.5 |
| Net profit / (loss) attributable to holders of ordinary shares | 412.9 | 294.4 |
0.87 | 0.77 | 0.71 |
| Earnings per ordinary share (in EUR) | 3.29 | 2.35 |
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| Results -including exceptional items- |
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187.6 | 286.5 | 226.2 |
| Group operating profit / (loss) before depreciation and amortization (EBITDA) | 1,014.5 | 424.0 |
109.0 | 204.2 | 148.7 |
| Group operating profit (loss) (EBIT) | 691.5 | 84.1 |
87.4 | 144.2 | 86.9 |
| Net profit / (loss) attributable to holders of ordinary shares | 455.7 | -168.4 |
0.69 | 1.15 | 0.70 |
| Earnings per ordinary share (in EUR) | 3.63 | -1.34 |
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219.4 | 240.2 | 316.9 |
| Cash flows from operating activities (gross excluding derivatives) | 899.5 | 897.9 |
219.7 | 245.6 | 341.2 |
| Cash flows from operating activities (gross) | 943.1 | 872.1 |
247.4 | - 111.8 | - 100.7 |
| Cash flows from investing activities (including derivatives) | 109.6 | - 489.4 |
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| Additional performance measures |
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282.3 | 285.4 | 269.6 |
| Proportional EBITDA -excluding exceptional items- | 1,154.0 | 1,067.8 |
20.6 | 22.0 | 22.1 |
| Proportional capacity end of period (in million cbm) | 20.6 | 22.1 |
91% | 92% | 90% |
| Proportional occupancy rate | 91% | 88% |
35.2 | 36.4 | 36.6 |
| Storage capacity end of period (in million cbm) | 35.2 | 36.6 |
91% | 91% | 90% |
| Subsidiary occupancy rate | 91% | 87% |
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12.8% | 14.1% | 9.3% |
| Proportional operating cash return | 14.0% | 11.4% |
11.7% | 12.2% | 10.6% |
| Return on Capital Employed (ROCE) | 12.3% | 9.8% |
5,058.8 | 5,068.5 | 5,319.4 |
| Average capital employed | 5,106.3 | 5,408.1 |
2,286.4 | 2,698.8 | 3,050.8 |
| Net interest-bearing debt | 2,286.4 | 3,050.8 |
1.80 | 2.09 | 2.65 |
| Senior net debt : EBITDA | 1.80 | 2.65 |
1.99 | 2.27 | 2.85 |
| Total net debt : EBITDA | 1.99 | 2.85 |
CEO statement
“I am proud to look back on a successful 2023. Our team at Vopak delivered on our strategic priorities and with our well-diversified terminal portfolio, we are supporting the world’s need for energy security and the ongoing energy transition. We made good progress on our strategy to improve our financial and sustainability performance. Organic growth across most of the business units led to a healthy proportional occupancy of 91% and EBITDA of EUR 964 million which is a record result for Vopak leading to a 9% year-on-year increase. We were able to also increase the EBITDA margin by 2 percentage points. On safety, our first priority, we further improved our personal safety and maintained a very good process safety performance.
We successfully completed the divestment of three chemical terminals in Rotterdam, the Netherlands and a chemical distribution terminal in Savannah, United States. We continued to grow our base in industrial and gas terminals with expansion in China, United States, India and the Netherlands. We are progressing well in accelerating towards new energies and sustainable feedstocks, by commissioning repurposed infrastructure as well as expanding the capacity for feedstock for low-carbon transportation fuels. We made our first investment into electricity storage infrastructure in the United States. Due to our robust financial position and strong portfolio cash generation, we are increasing shareholder distribution by a combination of growing dividends by 15% compared to 2022 and a share buyback program of up to EUR 300 million.”
Financial Highlights for FY 2023 -excluding exceptional items-
Revenue increased to EUR 1,426 million (FY 2022: EUR 1,367 million) driven by favorable storage demand in all markets which more than compensated for the divestment impact of EUR 37 million and unfavorable currency translation effects of EUR 26 million. In addition, growth projects further supported revenue.
Proportional revenue increased to EUR 1,942 million (FY 2022: EUR 1,857 million). During 2023 the volatility in the oil market, rebalancing of trade flows and supply security concerns supported overall storage demand in the main hub locations. Chemical markets were characterized by oversupply, suppressed China consumption as well as declining margins and operating rates. However the demand for storage was stable. Throughput levels in our industrial terminals remained firm. Gas markets (LNG) settled in 2023 after the disruption caused by the Russia - Ukraine war.
Subsidiary occupancy rate at FY 2023 was 91% (FY 2022: 87%). Proportional occupancy rate at FY 2023 increased to 91% (FY 2022: 88%) mainly due to improved occupancy in Asia & Middle East, Singapore and the Netherlands business units.
Costs were broadly stable at EUR 717 million (FY 2022: EUR 713 million) as the cost control measures and favorable divestment and currency translation impacts offset increased personnel expenses and higher operating expenses, including the cost of growth projects. Proportional costs increased by EUR 11 million to EUR 905 million (FY 2022: EUR 894 million).
EBITDA increased by EUR 77 million (9% year-on-year) to EUR 964 million (FY 2022: EUR 887 million) as a result of favorable storage demand across the different markets and geographies while keeping costs broadly stable and offsetting the divestment impact (EUR 6 million) as well as negative currency translation effects (EUR 23 million). Compared to Q3 2023 (EUR 241 million), EBITDA (Q4 2023: EUR 229 million) decreased due to the divestment impact of three chemical terminals in Rotterdam (EUR 6 million), higher costs and lower results from joint ventures, partly offset by growth project contributions.
Proportional EBITDA increased by EUR 86 million (8% year-on-year increase) to EUR 1,154 million (FY 2022: EUR 1,068 million). Proportional EBITDA margin in FY 2023 was 56% (FY 2022: 54%) an improvement reflecting good business conditions and our commercial ability to pass on inflationary and exceptional energy costs during the year.
EBIT increased by EUR 94 million (17% year-on-year) to EUR 641 million (FY 2022: EUR 547 million) mainly due to improved EBITDA performance, lower depreciation and higher results from joint ventures.
Growth investments in 2023 were EUR 247 million excluding any net cash received (FY 2022: EUR 313 million). Proportional growth investments in 2023 were EUR 299 million (FY 2022: EUR 349 million).
Operating capex, which includes sustaining and IT capex, decreased by EUR 36 million to EUR 255 million (FY 2022: EUR 291 million) due to divestment impact and lower spend compared to last year. Proportional operating capex was EUR 290 million (FY 2022: EUR 315 million).
Cash flow from operating activities increased by EUR 71 million to EUR 943 million compared to FY 2022 EUR 872 million (8% year-on-year). The increase was related mainly to positive business performance (increase of EUR 54 million) and settlement of derivatives (increase of EUR 69 million). This was partially offset by lower dividend receipts from joint ventures and associates (decrease of EUR 34 million).
Proportional operating cash flow in FY 2023 increased by EUR 111 million (16% year-on-year) to EUR 795 million (FY 2022 EUR 684 million) driven mainly by improved proportional EBITDA performance, partly offset by a negative currency translation impact.
Proportional operating cash return in FY 2023 was 14.0% compared to 11.4% in FY 2022. The increase was mainly due to higher EBITDA contribution and lower average capital employed compared to last year.
Total impairment charges in FY 2023 were EUR 31 million offset by the reversal of impairments of EUR 54 million (FY 2022: charge of EUR 449 million).
Net profit attributable to holders of ordinary shares -excluding exceptional items- was EUR 413 million (FY 2022: EUR 294 million). FY 2023 Earnings per share (EPS) -excluding exceptional items- continued to improve, FY 2023 EPS was EUR 3.29 (40% year-on-year) compared to EUR 2.35 in FY 2022.
The total net debt : EBITDA ratio is 1.99x at the end of 2023 compared to 2.85x at the end of 2022 and 2.27x at the end of Q3 2023. Our ambition is to keep total net debt to EBITDA in the range of around 2.50-3.00x.
Shareholder distribution Successful execution of our strategy has led to a robust financial position which allows us to increase the dividend and the start of a share buyback program.
Proposed dividend of EUR 1.50 (2022: EUR 1.30) per ordinary share, payable in cash, will be proposed at the Annual General Meeting on 24 April 2024. This represents an increase of 15% compared to 2022, in line with Vopak’s stable to progressive dividend policy which aims to maintain or grow the annual dividend subject to market conditions.
Share buyback program of up to EUR 300 million. Today we announce the share buyback program that will start on 15 February 2024 and will run until the end of 2024, barring unforeseen circumstances.
Exceptional items in Q4 2023 consist of:
Divestment loss of EUR 5 million following the sale of three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven) in November 2023.
Organizational restructuring charges of EUR 6 million (YTD Q3 2023: EUR 11 million) for changes in management structure in line with Vopak’s strategic goals mainly include employee termination benefits and advisory costs.
Impairment of a partially constructed jetty in China in the amount of EUR 22 million. Vopak has decided not to pursue the completion of the jetty which has started in 2018 due to lack of feasibility of this LNG project.
On 2 February 2024, Vopak signed a sale and purchase agreement to sell its 60% share (42% economic share) in chemical distribution terminal Shandong Lanshan, China which led to an impairment of EUR 9 million upon classification as asset held for sale.
Income tax gain of EUR 16 million related to the net income tax effects on the exceptional items.
For the full financial year 2023 exceptional items overview, reference is made to the Financial Statement section in the Annual Report.
For more information please contact:
Vopak Press: Liesbeth Lans - Manager External Communication, e-mail: global.communication@vopak.com
Vopak Analysts and Investors: Fatjona Topciu - Head of Investor Relations, e-mail: investor.relations@vopak.com
The analysts’ presentation will be given via an on-demand audio webcast on Vopak’s corporate website, starting at 10:00 AM CET on 14 February 2024.
Auditor’s involvement
This press release and enclosure 3 are based on the 2023 financial statements. The financial statements are published in accordance with statutory provisions. The auditor has issued an unqualified auditor’s report on the Financial Statements.
This press release contains inside information as meant in clause 7 of the Market Abuse Regulation.
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