Despite the deteriorating market conditions 2015 turned out to be a good year. Another very busy year with many highlights, which also saw a satisfactory close in financial terms with revenue of EUR 3.2 billion and net profit of EUR 440 million. The order book at year-end stood at EUR 2.5 billion. In addition, we worked very hard on the integration and further strengthening of our internal organization, among others through the harmonization of various business processes and support systems.
Developments in core activities
Dredging & Inland Infra
2015 will definitely go down in history as the year that the second Suez Canal was opened. Whereas a year or so ago there were still doubts as to whether this highly ambitious project could be realized in such an extremely short space of time, we now know that it could. In the space of around nine months a volume of no less than 220 million cubic meters was dredged by the biggest combined dredging fleet in history, with around 2,000 people of no fewer than 45 different nationalities having been involved in the project. The ceremonial opening of the canal by Egyptian President al-Sisi on 6 August 2015 was attended by an array of world leaders. 2015 also saw the conclusion of two other important projects that had been ongoing for some time: the construction of Açu Port in Brazil and the A4 Midden-Delfland motorway in the Netherlands. New projects acquired during the year included the construction of the Pluit City artificial island near Jakarta in Indonesia, the artificial island Punta Pacifica 2 in Panama and in the Netherlands the construction of the Marker Wadden and the reinforcement of the Markermeer dikes.
The Offshore Energy division also executed a large number of projects in 2015. One of the most extraordinary was undoubtedly the DolWin2 project, involving the transportation and installation of the world’s largest offshore converter platform, especially because it’s such a great example of what we as a group – deploying our own equipment – are capable of. The project kicked off with the tow-out in Dubai by Smit Lamnalco. This was followed by the transportation of the platform from Dubai to Norway by Dockwise using the Mighty Servant 1. Next, the tow-out to the wind farm site in the German Bight was executed by Fairmount, while the anchor pattern was simultaneously laid by our anchor handling tugs. The ballasting of the platform with 60,000 tons of rock was carried out by the Rockpiper and the scour protection consisting of 10,000 tons of rock around the legs was installed by the Seahorse. Finally, the concrete mattresses to protect the platform’s bellmouths were installed by the Protea. A great example of operational collaboration and commercial cross-pollination.
Dockwise worked hard on the biggest contract in its history, the Wheatstone LNG project in Australia, with nearly 50 transports and more than 100 modules. At its peak 18 vessels and barges were deployed on the project and delivery of the final modules for the first LNG train was completed on time just before the new year. In addition, Dockwise deployed the Dockwise Vanguard to transport the FPSO Goliat from South Korea to Norway. Weighing 65,000 tons, this was the heaviest cargo ever transported by Dockwise. Dockwise also carried out eight transports in support of the mobilization and demobilization of dredging vessels, pipelines and support equipment for the Suez Canal project.
An important and sizable project won in 2015 was the Veja Mate offshore wind park project, which comprises the design, procurement, manufacture, transportation, installation and scour protection of 67 wind turbine foundations. With a diameter of almost 8 meters and a maximum length of 85 meters, the monopiles are the biggest ever made and installed for a wind park.
Towage & Salvage
At Towage further progress was made with the execution of the strategy aimed at the development and expansion of regional partnerships. The Saam Smit joint venture in North and South America has taken on its permanent shape and in December 2015 we took a major next step in the establishment of the Kotug Smit joint venture, which we expect to be able to effectuate in the first half of 2016.
Salvage had a historically busy and successful year. The highlight was the wreck removal of the car carrier Baltic Ace, which sank off the Dutch coast. After the removal of the heavy fuel oil from the wreck, it was cut into eight sections, using an innovative heave-compensation cutting method developed in-house. The sections were lifted using the Taklift 4 floating sheerleg crane, with loose debris being removed by the grab crane. In this way the entire ship, including its cargo of 1,400 cars, was removed from the seabed: neatly, carefully and with control. In addition, Salvage worked on no fewer than three salvage jobs involving oil rigs during the year: the Perro Negro in Angola, the Troll in Mexico and the Rumailah in Qatar.
2015 was also the year in which we celebrated the fifth anniversary of NINA. Five years during which our NINA (No Injuries, No Accidents) safety program has become an inextricable part of our culture, part of our DNA. In 2015 NINA was successfully introduced at the Offshore Energy division and at Salvage, where it has now also become impossible to imagine the business without NINA. Last year also saw the introduction of the first NINA workbox, with practical training methods and tools focused on a specific theme. The workbox Hands was well received both on board of the vessels and on the projects, and was followed early this year by the important workbox Mooring, which will meet a pressing need aboard the vessels.
Despite the prevailing market conditions we still invested considerably in 2015. The hopper Freeway was named and taken into service in Papendrecht in mid-January, followed by the flat-top barge Giant 6, semi-submersible heavy transport vessel White Marlin, the floating sheerleg crane Asian Hercules III and the Giant 7.
In early 2016 we announced the purchase of the activities of STRABAG Wasserbau, based in the German city of Hamburg. The acquisition will allow us to strengthen the fleet with vessels including two young medium-sized hoppers in a segment where we were looking for reinforcement and renewal.
Opportunities in wind energy
In Early March 2016, Boskalis signed a Letter of Intent to acquire offshore activities of VolkerWessels. Boskalis and VolkerWessels have been working together successfully for years in the offshore wind energy market. VBMS, a 50/50 Boskalis - VolkerWessels joint venture, is the European market leader in the field of offshore cable installation with a strong market position and well-filled order book. As a consequence of this transaction, Boskalis will acquire the remaining 50% share in VBMS. Late 2014 and mid-2015, Boskalis and VolkerWessels in joint venture acquired two large offshore wind park projects. With the transaction, Boskalis will execute these two projects on a 100% basis. We have high expectations for new offshore wind park developments in Northwestern Europe and, in view of the much needed transition to more sustainable forms of energy, expect other regions globally to follow.
In 2015 we increased our stake in Fugro from 19.9% to 28.6%. As we have stated previously we consider Fugro to be an interesting company whose activities fit very well with our own activities. As a major shareholder in Fugro during 2015 we engaged in a dialogue at Management Board and Supervisory Board level regarding the company’s strategy and operational performance.
Conclusion of a period
Along with 2015 we conclude a period of exceptional growth and success, and prepare for a period of stagnation and rationalization, governed by low oil prices and a decline in the global demand for commodities. Markets are under pressure and are saturated with assets, in many cases held by companies unable to keep them sufficiently utilized and with weak balance sheets. On the one hand this provides us with opportunities for selective fleet reinforcement. At the same time we, too, are subject to market constraints and will have to adapt to this new market order. This means taking a critical look at the size and composition of the fleet, ensuring we are sufficiently flexible in the deployment of our vessels and people, and keeping an eye on costs, both in terms of overhead and operating costs. Above all we will be alert to respond to all the opportunities the market presents us with – in wind energy, in decommissioning, in port developments, in salvage, numerous. With a large, diversified fleet of vessels, a very sound financial position and, above all, highly committed and passionate employees we are well placed to take advantage of these opportunities.
On behalf of the Board of Management I want to thank all colleagues for the tremendous effort they once again put in in 2015, and thank our clients, partners and shareholders for the trust they place in us.