Vopak reports on 2017 financial results

Highlights for full year and Q4 2017 -excluding exceptional items-:

• Full year EBITDA of EUR 763 million (2016: EUR 822 million). Adjusted for currency translation effects and divestments in 2016, EBITDA decreased by 4%
• Occupancy rate of 90%, whereby the difference with the high 2016 occupancy rate of 93% is primarily caused by a less favorable oil market structure
• Full year EBIT of EUR 490 million (2016: EUR 558 million)
• Full year net profit attributable to holders of ordinary shares of EUR 287 million (2016: EUR 326 million) resulting in earnings per ordinary share (EPS) of EUR 2.25 (2016: EUR 2.56)
• Full year Cash Flow Return On Gross Assets (CFROGA) after tax of 9.5% (2016: 10.5%)
• Q4 EBITDA of EUR 193 million (Q4 2016: EUR 198 million)
• Q4 net profit attributable to holders of ordinary shares of EUR 76 million (Q4 2016: 72 million)
• Our worldwide storage capacity on a 100% basis increased by 1.2 million cbm to 35.9 million cbm compared to year-end 2016, primarily in operatorships. Upon completion, our projects currently under development will add 3.1 million cbm of storage capacity to our global network by 2019.

Exceptional items:

• EBIT(DA): total exceptional losses before finance costs and taxation amounted to EUR 68 million (2016: gain of EUR 201 million). This mainly comprises the gain on the partial divestment of Vopak Terminal Eemshaven and the impairments recognized on two joint venture terminals in Estonia and China
• Net profit: total exceptional losses included in the net profit amounted to EUR 52 million (2016: gain of EUR 208 million). In addition to the items included in the EBIT(DA), this includes a make-whole payment of EUR 17 million in relation to the repayment of the 2007 USPPs and an exceptional tax gain of EUR 35 million. The latter was recognized in relation to the changes in corporate income tax rates in the United States and Belgium.

Subsequent events:

• Early 2018, Vopak reached an agreement regarding a new pension plan in the Netherlands effective per 1 January 2018. The new pension plan, aimed to qualify as a defined contribution plan under IAS19, will be formally implemented during the first half of 2018. The settlement of the pension liability is expected to result in a material exceptional gain during 2018
• Today, it is announced that Vopak and its partner PT AKR Corporindo will expand their strategically located import-distribution terminal in the Port of Jakarta, Indonesia. The expansion will add 100,000 cbm of storage capacity for clean petroleum products and biofuels supporting customers to comply with Indonesia's biofuel blending mandate regulations
• Today, Vopak announces that it will expand its Sebarok terminal in Singapore with 67,000 cbm. The expansion mainly caters for storage and handling of marine gasoil to strengthen the position of our Sebarok terminal as the bunker hub of choice with flexibility of handling multiple fuels following the implementation of the International Marine Organization's global sulphur cap as of 1 January 2020.

Looking ahead:

• Financial performance in 2018 is expected to be influenced by currency exchange movements of primarily the USD and SGD, and the currently less favorable oil market structure, impacting occupancy rates and price levels in the hub locations
• Given the current 3.1 million cbm expansion program with high commercial coverage, in conjunction with the ongoing cost efficiency program, Vopak has the potential to significantly improve the 2019 EBITDA, subject to market conditions and currency exchange movements.

Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak commented:

"Despite challenging market conditions, particularly in the oil markets, and following a strong performance in 2016, we had a satisfactory performance in 2017. 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.

Our projects under development will add 3.1 million cbm of storage capacity to our global network by 2019. We announced new growth projects with a total capacity of 862,000 cbm in South Africa, Brazil, Canada and Malaysia in 2017. Vopak's growth strategy is directed towards chemical (industrial) terminals and gas markets, while facilitating the increasing demand for fuels in emerging countries. We will continue to explore and find new possibilities within the LNG infrastructure market, to expand our role as a service provider in the LNG value chain.

In order to continue creating long-term value for all our stakeholders, we have taken strategic decisions regarding technology, and we are making substantial investments to deliver the full benefits of the digital transformation in future years to our customers and shareholders.

We are embracing the changing dynamics of the energy transition. As an infrastructure and service provider, we do not drive market choices, but facilitate energy flows. We help introduce infrastructure and logistic solutions for clean and efficient fuels. Vopak will work on further reducing the negative impact of our operations on neighboring communities and the environment. We will define targets for delivering on the UN Sustainable Developments Goals that we selected, and are actively considering the final recommendations of the Task-force on Climate-related Financial Disclosures. We are committed to continue storing vital products with care."

Link to video of CEO and CFO commenting on Vopak's 2017 full year financial results

Link to Vopak's reports and presentations 

The analysts' presentation will be given via an on-demand audio webcast on Vopak's corporate website www.vopak.com, starting at 11:00 AM CET on 16 February 2018.

For more information please contact:

Press: Liesbeth Lans, Manager External Communications
Telephone: +31 (0)10 400 2777, e-mail: global.communication@vopak.com

Analysts and investors: Anil Acardag, Manager Investor Relations,
Telephone: +31 (0)10 400 2770, e-mail: investor.relations@vopak.com

Auditor's involvement
This press release is based on the 2017 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.

Profile Royal Vopak
Royal Vopak is the world's leading independent tank storage company. We operate a global network of terminals located at strategic locations along major trade routes. With over 400 years of history and a strong focus on safety and sustainability, we ensure safe, efficient and clean storage and handling of bulk liquid products and gases for our customers. By doing so, we enable the delivery of products that are vital to our economy and daily lives, ranging from oil, chemicals, gases and LNG to biofuels and vegoils. Vopak is listed on the Euronext Amsterdam stock exchange and is headquartered in Rotterdam, the Netherlands. Including our joint ventures and associates, we employ an international workforce of over 5,700 people. As of 16 February 2018, Vopak operates 66 terminals in 25 countries with a combined storage capacity of 35.9 million cbm, with another 3.1 million cbm under development, to be added before the end of 2019.

This press release contains inside information as meant in clause 7 of the Market Abuse Regulation.