Vopak reports FY 2022 and Q4 2022 results and demonstrates good progress towards its strategic goals
Key highlights 2022:
Improve: We reported financial results in line with 2022 expectations. FY 2022 EBITDA of EUR 887 million and operating cash return of 11.4%. Occupancy improved to 90% by the end of Q4 2022. We continued to actively manage our portfolio by divesting our Canadian oil terminals, Agencies business and started a strategic review of Vopak’s three chemical terminals in the Port of Rotterdam.
Grow: We strengthened our leading position in China and India through an expansion in Caojing and the completion of the joint venture in India with Aegis. Gate LNG terminal continues to fulfill an important role in the energy security of Northwest Europe.
Accelerate: We are repurposing oil capacity in Los Angeles to sustainable aviation fuel and renewable diesel and taking a share in the electricity storage company Elestor. In addition, we will redevelop a prime location in the Port of Antwerp for new energies and sustainable feedstocks and we are investing in hydrogen logistics in Europe.
Q4 2022
Q3 2022
Q4 2021
In EUR millions
2022
2021
355.3
349.6
315.2
Revenues
1,367.0
1,227.9
Results -excluding exceptional items-
227.8
226.9
212.5
Group operating profit / (loss) before depreciation and amortization (EBITDA)
887.2
826.6
150.3
140.3
121.9
Group operating profit / (loss) (EBIT)
547.3
494.8
88.5
77.7
69.1
Net profit / (loss) attributable to holders of ordinary shares
294.4
298.3
0.71
0.62
0.55
Earnings per ordinary share (in EUR)
2.35
2.38
Results -including exceptional items-
226.2
229.7
206.5
Group operating profit / (loss) before depreciation and amortization (EBITDA)
424.0
741.5
148.7
143.1
115.9
Group operating profit (loss) (EBIT)
84.1
409.7
86.9
80.5
64.1
Net profit / (loss) attributable to holders of ordinary shares
-168.4
214.2
0.70
0.64
0.51
Earnings per ordinary share (in EUR)
-1.34
1.71
316.9
197.9
313.1
Cash flows from operating activities (gross excluding derivatives)
897.9
786.2
341.2
191.3
312.2
Cash flows from operating activities (gross)
872.1
741.2
- 100.7
- 117.9
- 139.7
Cash flows from investing activities (including derivatives)
- 489.4
- 588.4
Additional performance measures
269.6
277.4
250.6
Proportional EBITDA -excluding exceptional items-
1,067.8
999.6
22.1
22.2
22.5
Proportional capacity end of period (in million cbm)
22.1
22.5
90%
89%
86%
Proportional occupancy rate
88%
88%
36.6
36.6
36.2
Storage capacity end of period (in million cbm)
36.6
36.2
90%
88%
86%
Subsidiary occupancy rate
87%
87%
9.3%
11.2%
8.0%
Proportional operating cash return
11.4%
10.2%
10.6%
10.4%
9.6%
Return on Capital Employed (ROCE)
9.8%
10.2%
5,319.4
5,344.3
5,150.2
Average capital employed
5,408.1
4,755.1
3,050.8
3,278.7
2,925.1
Net interest-bearing debt
3,050.8
2,925.1
2.65
2.82
2.93
Senior net debt : EBITDA
2.65
2.93
2.85
3.02
3.16
Total net debt : EBITDA
2.85
3.16
Note: Proportional operating cash return is defined as proportional operating cash flow over average proportional capital employed and reflects the increased importance of free cash flow and joint ventures in our portfolio. Proportional operating cash flow is defined as proportional EBITDA minus IFRS 16 lessee minus proportional operating capex, which is defined as sustaining and service capex plus IT capex. Proportional operating cash flow is pre-tax, excludes growth capex and derivative and working capital movements. Proportional capital employed is defined as proportional total assets less current liabilities, excluding IFRS 16 lessee. As of Q4 2022, Operating Cash Return includes the cash flow from lessor accounting.
Royal Vopak Chief Executive Officer Dick Richelle, comments on the FY 2022 results
“During 2022, we made good progress in our strategy to improve our financial and sustainability performance, to grow our base in industrial and gas terminals, and to accelerate towards new energies and sustainable feedstocks.
We improved our performance in 2022, captured growth opportunities and accelerated towards the company we want to be in the future. EBITDA and cash flow generation increased during the fourth quarter allowing us to meet the expectations for the full year as we captured market opportunities in many locations despite cost pressures due to surging energy prices and higher personnel expenses. Today we announced that we have started a strategic review of Vopak’s three chemical terminals in the Port of Rotterdam. We also progressed our sustainability performance by reducing our CO2 emissions by 10% during 2022 compared to the baseline of 2021.
The deployment of growth capex towards our strategic priorities is going well with growth in industrial and gas terminals, for example in Caojing, China we are expanding our industrial terminal capacity.
We are accelerating towards new energies. We accessed a prime location in Europe’s leading petrochemical cluster, the Port of Antwerp. This offers a unique opportunity to implement our strategy, forge new partnerships and support the industry in its decarbonization by developing critical infrastructure. In addition, together with Hydrogenious LOHC Technologies we are jointly taking hydrogen logistics to the next level to push LOHC market solutions and large-scale pilot projects forward.
As a result of our improve, grow and accelerate strategy, Vopak will be a different company in 2030. Society will need new, sustainable products that we will handle. We will forge new partnerships and transform our company gradually but decisively, leveraging our strengths and capabilities. We will contribute to a low-carbon future by providing infrastructure solutions for new energies and sustainable feedstocks, by helping leading customers decarbonize, and by reducing our own environmental and carbon footprint.”
Financial highlights for FY 2022 - excluding exceptional items
Revenue increased to EUR 1.4 billion, driven by favorable storage demand indicators in chemical markets, contribution from growth projects and a steady recovery during the year in oil markets as well as positive currency translation effects.
Proportional occupancy rate FY 2022 was 88% (FY 2021: 88%). Proportional occupancy improved to 90% in Q4 2022 from 89% in Q3 2022 driven mainly by higher occupancy in Europe.
Costs increased by EUR 85 million to EUR 713 million (FY 2021: EUR 628 million) mainly due to surging energy prices (EUR 35 million), currency translation effects (EUR 29 million), personnel expenses (EUR 7 million) and cost of growth projects and business development. During 4Q 2022, EUR 12 million of non-recurring costs were recorded in the Europe & Africa division related to soil provision.
EBITDA increased to EUR 887 million (FY 2021: EUR 827 million) supported by business conditions, currency translation effects (EUR 58 million) and growth projects’ contribution (EUR 23 million). The positive trend was offset by the divestment impact of EUR 12 million, higher costs and non-recurring provision of EUR 12 million in Europe & Africa division.
EBIT was EUR 547 million (FY 2021: EUR 495 million), an increase of EUR 52 million including EUR 43 million of positive currency translation effects. The divestments during 2022 had an impact of EUR 2 million on EBIT. Depreciation charges were broadly in line with prior year as the increase in commissioned growth assets was offset by the impact of impairment charges on depreciation of EUR 18 million.
Growth investments in FY 2022 were EUR 313 million (FY 2021: EUR 269 million), reflecting the completion of our joint venture in India with Aegis in Q2 2022 and higher growth capex in Europe & Africa and America divisions. Proportional growth investments in FY 2022 were EUR 349 million (FY 2021: EUR 316 million).
Operating capex, which includes sustaining and IT capex, in FY 2022 was EUR 291 million (FY 2021: EUR 316 million) while proportional operating capex was EUR 315 million (FY 2021: EUR 355 million) due to lower operating capex spend in Europe and Africa division and lower IT spend.
Cash flow from operating activities increased by EUR 112 million to EUR 898 million, driven by strong EBITDA performance and dividend receipts from joint ventures and associates which increased to EUR 208 million (FY 2021: EUR 133 million).
Proportional operating cash flow in FY 2022 was EUR 684 million (FY 2021 EUR 553 million) driven mainly by strong proportional EBITDA performance and currency exchange impact (EUR 68 million) and lower operating capex (EUR 40 million). Proportional operating cash return in FY 2022 was 11.4% compared to 10.2% in FY 2021. The impairments in HY1 2022 led to an increase of the FY operating cash return by 0.4 percentage points. Proportional operating cash return in FY 2022 includes lessor accounting, excluding the impact of lessor accounting (0.6 percentage points), the increase in operating cash return was 0.2 percentage points. The change in the methodology of calculating proportional operating cash return provides better insight into the cash generation of the business.
Total impairment charges in FY 2022were EUR 481 million (FY 2021: EUR 71 million), including the impairments of Europoort, Botlek and SPEC LNG as announced in the first half 2022 report. An asset impairment charge of EUR 17 million was recorded in the fourth quarter of 2022 for the cash-generating unit Vopak Colombia, primarily related to weakening of the business environment in which the terminal currently operates and forecasted competition.
Net profit attributable to holders of ordinary shares was EUR 294 million (FY 2021: EUR 298 million). Tax charges increased as a result of the derecognition of the deferred tax assets in the Netherlands in Q2 2022.
The senior net debt : EBITDA ratio is 2.65x at the end of year 2022 (FY 2021: 2.93x), within our previously communicated ambition to keep senior net debt to EBITDA ratio in the range of around 2.5-3.0x. Average interest rate on total debt at the end of FY 2022 was 3.9% (FY 2021: 3.8%). Interest coverage ratio at the end of FY 2022 stood at 8.4x (FY 2021: 8.4x), well above the financial covenant of 3.5x.
Proposed dividend of EUR 1.30 (2021: EUR 1.25) per ordinary share, payable in cash, will be proposed during the Annual General Meeting on 26 April 2023. This represents an increase of 4% year on year, in line with Vopak’s progressive dividend policy which aims to maintain or grow the annual dividend subject to market conditions.
The analysts’ presentation will be given via an on-demand video webcast on Vopak’s corporate website, starting at 10:00 AM CET on 15 February 2023.
Auditor’s involvement This press release and enclosure 3 are based on the 2022 financial statements. The financial statements are published in accordance with statutory provisions. The auditor has issued an unqualified auditor’s report on the Financial Statements.
This press release contains inside information as meant in clause 7 of the Market Abuse Regulation.
For Vopak's full press release refer to the attached document
