Vopak Keeps FY Outlook As Biofuels Demand Improves
10.11.2011 -
Vopak, the world's largest independent storage tank operator, reiterated its 2011 outlook and said it expected improved demand for biofuels after uncertainty in that market had moved it to issue a profit warning earlier this year.
Vopak, which offers oil, chemical and biofuel storage in major ports including Fujairah, Rotterdam, Singapore and Tallinn said it expected robust demand for oil products and healthy demand for chemicals.
"With good demand for storage of oil and chemicals and improving market conditions for biofuels the prospects for Vopak remain positive," SNS Securities said in a note.
Vopak Chief Financial Officer Jack de Kreij told ANP-Reuters that the current economic downturn could affect certain projects, but added that the core growth strategy will remain the same.
"If the demand for biofuels, for ethanol, will start to increase again in 2012, 2013, certain storage capacity in the U..S and Europe may benefit from that," De Kreij said.
With increased demand for biofuels and unchanged demand for chemicals and oil storage, up to 95% of the current capacity could be put to use, he said.
In April Vopak lowered its 2011 core profit outlook, citing uncertainty in the biofuels market that marred robust demand for its oil storage services.
Vopak's oil storage business benefits from imbalances between producing and consuming regions while its chemical storage business relies on a strong output in the chemical industry.
Vopak said its occupancy rate in the third quarter was 93% compared to 92% one year ago.
It said it still expected 2011 operating profit before depreciation and amortization (EBITDA) - excluding exceptional items - of between €600 million-640 million.
It reported third-quarter EBIT of €121.3 million, up 7% from a year ago. Analysts in a Reuters poll had expected €114 million.
The company said the increase was due to new capacities in third quarter which included the first Dutch LNG terminal in Rotterdam.
Vopak which currently operates 27.2 million m3 of storage capacity in 31 countries said projects under construction would add 6.2 million m3 of capacity by 2014.
