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Boskalis jaarverslagen 2012

Strenghten & Rationalize

The Strengthen & Rationalize pillar relates to all the divisions.

Dredging & Inland Infra

The Dredging & Inland Infra segment is focused on market segments with structural growth. Boskalis has a very strong presence in the global dredging market with a modern and versatile fleet. Due to current market conditions, expectations for the next few years are moderate. In addition, Boskalis’ scope for growth in dredging is limited due to its already large market share of this heavily consolidated market. With relatively limited replacement and other investments, Boskalis can maintain its market position.

Results:
A trailing suction hopper dredger with a capacity of 4,500 m³ was taken into service in early 2015 and during the year work continued apace on the construction of a mega cutter and a new jumbo backhoe dredger. In addition, the road maintenance activities of De Jong were sold in early 2015 and at the start of 2016 we announced the acquisition of German competitor STRABAG Wasserbau. The STRABAG Wasserbau acquisition is typical of the sort of equipment-driven acquisition that Boskalis is looking at in the current market. The STRABAG Wasserbau acquisition will allow us to strengthen our position in the German market and simultaneously allows us to rejuvenate the fleet by acquiring existing quality assets from the market.In light of the market outlook and the acquisition of STRABAG Wasserbau a rationalization study will be carried out in 2016. It is expected that this program will result in the scrapping of a number of dredging vessels, including older trailing suction hopper dredgers, cutter suction dredgers and backhoe dredgers.

Offshore Energy

Boskalis is very well equipped to provide services to clients in the global offshore energy sector and under increasingly complex conditions. In a challenging market Boskalis is developing specifically in the areas of transport, logistics & installation and decommissioning.

Transport

Boskalis has a strong market position in heavy marine transport, including for extremely heavy offshore platforms and FPSOs. It is our ambition to maintain this market position and where possible take selective steps to reinforce it.

Results:
In early 2015 the White Marlin, a semi-submersible heavy transport vessel with a load capacity of 72,000 tons, was taken into service. In 2015 we took a step towards fleet rationalization with the sale of six work vessels (B boats). These vessels along with their crews were transferred to a local market player.

Logistical Management

Boskalis is able to play a leading role in realizing large-scale facilities at remote onshore locations. Logistics services are required in connection with the shipping and installation of for example prefab modules for LNG plants. Boskalis leverages the opportunities in this sector by combining its broad knowledge of project management with its own specialist transport equipment.

Results:
In 2015 we strengthened our Logistical Management track record and achieved good results. Modular construction is very attractive for projects in remote locations and Boskalis is well positioned in this segment for the future. In Australia we once again put in a great deal of work into delivering LNG modules for both the Ichthys project and the sizable Wheatstone project. Both projects will continue well into 2016.

Transport & Installation

The T&I market still presents Boskalis with interesting opportunities for employing its engineering knowledge, risk management experience and its versatile fleet.

Results:
We successfully expanded our T&I track record in 2015, with Boskalis employing a very broad range of services for the transport and installation of the DolWin Beta platform, the largest offshore convertor platform in the world (see the case DolWin2) for details about this project). In addition, some important offshore wind farm projects were acquired in the past year including the project responsibility for the procurement, manufacture, transportation, installation and scour protection of the wind turbine foundations. In order to strengthen our position in T&I in 2015 we invested in the Giant 7. In 2016 this construction vessel with accommodation facilities and a crane with a lifting capacity of 600 tons will be deployed on the Wikinger offshore wind farm project. The floating sheerleg crane Asian Hercules III, with lifting capacity of 5,000 tons, was delivered in early 2015.In addition, we will continue to look selectively at opportunities to strengthen our installation proposition. We anticipate that the current market turbulence will present not only threats but also opportunities for the acquisition of both interesting assets and companies. We will weigh such opportunities with the necessary care. In light of the market prospects we will take a critical look at the composition of the fleet and the associated staffing levels. On the basis of current information it is expected that several older, generally less competitive ships at the bottom of the S curve will be taken out of service.

Towage & Salvage

For the past few years the emphasis at Harbour Towage has been on the further development and expansion of regional partnerships, with the focus also set on an efficient cost and capital structure. Boskalis invests in these partnerships as and when opportunities arise. At Salvage the group’s global network is brought into play for the emergency response activities while Boskalis’ engineering and contract and risk management expertise is applied on wreck removal projects.

Results:
In the past year once again major steps were taken in the further execution of the strategy for Harbour Towage. The Saam Smit Towage joint venture for the North and South America region established in 2014 took further shape, and at the end of 2015 it was announced that virtually everything is in place for the proposed joint venture between KOTUG and SMIT for the joint continuation of their European harbour towage operations.

Organization

Streamlining the organization is a key priority of our strategy, with the aim of increasing the focus on the business opportunities and the clients. In order to facilitate this a new organizational structure has been put in place with three divisions, each with its own operational support functions, such as tendering, engineering, fleet management and crewing.

Results:
The implementation of the new divisional model progressed well in 2015. The Dredging and Offshore Energy divisions were physically brought together and each now has its own offices on the head office campus in Papendrecht, the Netherlands. Various systems were harmonized and new systems implemented, including a central staff information system and a cross-divisional CRM system. Good progress was also made with the introduction of a new ERP system. The introduction of the divisional model and systems harmonization has laid an important foundation for the future.

In the course of 2016 the organizational consequences of the aforementioned fleet rationalization will take further shape. In anticipation of a lower volume of work we will take a critical look at the composition of the fleet. It is expected that equipment will be taken out of service at both Dredging and Offshore Energy with the associated implications for staffing levels. In addition, we will take a critical look at reducing the cost of the global office network. Our objective is to stay a step ahead of market developments and ensure that Boskalis continues to be well positioned for the future.

Fugro

At the end of 2014 Boskalis acquired a strategic interest in Fugro. Boskalis’ strategy is aimed at the offshore and (maritime) infra-structure markets, leveraging the combination of advanced knowledge and maritime assets. Fugro’s core activities are an excellent fit with this and we consider Fugro to be an interesting company. The two companies have much in common in terms of assets, knowledge, capital intensity, global spread and customer base, and both are global leaders in niche markets. We support the Fugro strategy as realigned in November 2014 and in 2015 we increased our strategic stake in Fugro from 19.9% to 28.6%.

In conclusion

A healthy balance sheet is very important to Boskalis, and under normal circumstances we aim for a net debt : EBITDA ratio in a range of 1 to 1.5. However, in light of the uncertain market prospects we consider it desirable to maintain a more conservative balance sheet ratio. The extra solid balance sheet is considered desirable from the perspective of a prudent financial policy, but also in order to be able to take advantage of potential opportunities in the market such as the recently announced intended acquisition of STRABAG Wasserbau and the offshore activities of VolkerWessels. In line with this vision it has also been decided to suspend the share buy-back program until further notice.

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