Koninklijke Vopak NV (VOPKF) (Q2 2024) Earnings Call Highlights: Strong EBITDA Growth Amid ...

GuruFocus News
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In This Article:

  • Proportional EBITDA: EUR599 million, a 10% increase adjusted for divestment impact.

  • Operating Cash Return: Improved from 14.6% last year to 16.7%.

  • Occupancy Rate: Proportional occupancy at 92%.

  • Divestment Impact: EUR43 million.

  • Consolidated EBITDA: Increased by 8% when adjusted for divestments.

  • Proportional EBITDA Margin: Improved to 59% from 57% last year.

  • Cash Flow from Operations: EUR394 million.

  • Net Debt-to-EBITDA: Increased to 2.28 times from 1.99 times at the end of 2023.

  • Proportional Leverage: Increased to 2.67 times from 2.45 times at the end of 2023.

  • Full Year 2024 Proportional EBITDA Outlook: Updated to EUR1,150 million to EUR1,180 million.

  • Full Year 2024 Consolidated EBITDA Outlook: Updated to EUR920 million to EUR950 million.

  • Consolidated Growth CapEx: Increased to around EUR350 million.

Release Date: July 26, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Koninklijke Vopak NV (VOPKF) reported a strong demand for its services, achieving a proportional occupancy rate of 92%.

  • The company saw a 10% increase in proportional EBITDA, reaching EUR599 million, when adjusted for divestment impacts.

  • Operating cash return improved from 14.6% last year to 16.7%, driven by lower average capital employed and positive contributions from growth projects.

  • Significant investments were made, including a large-scale LPG export facility in Canada and expansions in industrial complexes in Saudi Arabia and China.

  • The company recorded a 15% decrease in Scope 1 and 2 emissions year-on-year, mainly by purchasing green electricity and further electrifying operations.

Negative Points

  • Chemical markets continue to be oversupplied, impacting the demand for storage infrastructure.

  • The company's personal safety performance was slightly below the same period last year.

  • Proportional occupancy decreased slightly in the second quarter compared to the first quarter, particularly in China and the Netherlands.

  • Corporate costs increased in Q2 due to higher personnel and insurance costs.

  • The market for low carbon fuels like renewable diesel is in oversupply, affecting short-term economics despite long-term demand being robust.

Q & A Highlights

Q: What are the main risks to the favorable market momentum Vopak is experiencing? A: Dick Richelle, CEO, mentioned that while demand remains strong, there is some variability in the LNG side due to weather dependence in Colombia. Oil markets continue to be strong, with high occupancy and activity levels. Chemical markets are stable, with some uncertainty in Singapore, Belgium, and Deer Park. The main risks include variability in chemical markets and potential pressure from customers on rates and capacity.

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