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Vopak: Net profit down 56%, ‘uncertain’ outlook for fuel oil

19 Feb 2018

Independent tank storage company Royal Vopak posted a decline in profile for its 2017 financial results.

The firm recorded net profit of EUR 235.4 million in 2017, 56% lower than profit of EUR 534.0 million seen in 2016, according to company records.

Revenue in 2017 was EUR 1.31 billion, 3% lower than EUR 1.35 billion in 2016.

“Despite challenging market conditions, particularly in the oil markets, and following a strong performance in 2016, we had a satisfactory performance in 2017,” said Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak.

“We aim to identify and seize growth opportunities swiftly, ensure timely completion of projects under development and step up the global roll-out of our new digital systems. These steps will improve our financial performance by 2019.”

Regarding developments on the bunker front, Vopak noted the outlook for the fuel oil market to be “uncertain” in the short term however forecast new opportunities in the future.

“The energy transition changes overall mix in demand for oil products and IMO 2020 will impact global fuel oil and bunker markets causing transition challenges in the short-term, but is expected to provide new opportunities in the mid- to long-term.”

Dick Meurs, Division President EMEA at Vopak further noted of the fuel oil and bunker markets negatively affected by certain trends in 2017.

“The continuing refinery upgrade trend in Russia combined with the IMO 2020 implementation was the cause of uncertainty in the bunker and fuel oil market in 2017,” he said.

“This had some impact on occupancy rates and pricing levels at our terminals in Spain and the UAE.

“The reduction in fuel oil supply from Russia, combined with the current geopolitical situation, continued to negatively affect the volumes at our terminal in Estonia.”

Vopak, in the meantime, has made plans to expand its Sebarok terminal in Singapore with 67,000 cubic metres in preparation for the upcoming marine fuel sulphur limit.

“The expansion mainly caters for storage and handling of MGO to strengthen the position of our Sebarok terminal as the bunker hub of choice with flexibilities of handling multiple fuels following the implementation of IMO regulations in 2020.”

Vopak in 2017 introduced new bunkering services at its Sebarok terminal in Singapore allowing vessels to receive bunkers from bunker barges simultaneously while loading or discharging at the terminal.

The introduction of the new bunkering service was a collaboration between BW Pacific, Sinanju Marine Services, and Unicore Fuel; the new service will be progressively expanded to Vopak’s other terminals in Singapore.

Photo credit: Royal Vopak
Published: 19 February 2018

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