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CORRECTED-UPDATE 2-Vopak lowers 2017 earnings expectations; shares hit
November 6, 2017 / 7:01 AM / a month ago

CORRECTED-UPDATE 2-Vopak lowers 2017 earnings expectations; shares hit

(Corrects capacity rate for 2017, paragraph 5 and third bullet)

* Shares fall more than 6 percent in early trading

* Efficiency measures to lift results from 2019 - CFO

* Capacity down to 90 pct from historic high of 94 pct in 2016

By Anthony Deutsch

AMSTERDAM, Nov 6 (Reuters) - A drop in capacity usage at Dutch oil and chemical storage firm Vopak will not improve in the fourth quarter, it said on Monday, leading it to lower earnings expectations for 2017.

Vopak’s net profit tumbled 25 percent in the third quarter, just missing analysts’ forecasts and sending its shares down nearly 7 percent at one point.

The company said 2017 earnings before interest, taxes, depreciation and amortization (EBITDA) would be “around 10 percent” lower than a year earlier, due to weaker usage rates, higher costs and market factors.

In August, Vopak said it expected a 5-10 percent fall in EBITDA for 2017.

Chief financial officer Jack de Kreij said the company was operating at around 90 percent of capacity in the year to date, down from a historically high level of 94 percent in 2016.

He saw no sign of improvement in the fourth quarter.

“We feel we are spot on with the (2017 EBITDA guidance) range of 5-10 percent lower, but you should now take into account it will end up at around 10 percent,” he said in an interview.

The company’s cost cutting measures and efficiency projects “will not come on stream in 2018, but at the start of 2019 and will start contributing positively (to results),” he said.

It is too early to provide performance guidance for 2018, he added, due to shifting market factors.

In the latest reported quarter, EBITDA fell 8 percent to 176 million euros ($204 million) from the previous quarter, due to lower revenues in Asia and higher expenses.

Net profit attributable to holders of ordinary shares dropped to 60.8 million euros, Vopak said. Capacity rates fell to 89 percent from 93 percent a year earlier.

Analysts were expecting net profit of 65.8 million euros, EBITDA of 185 million euros and a 4.1 percent drop in capacity rates to 89.2 percent, according to Reuters data.

$1 = 0.8617 euros Reporting by Anthony Deutsch; Editing by Amrutha Gayathri and Mark Potter

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