In view of the favorable development of the order book at Dredging & Inland Infra a large part of the fleet will be utilized in 2017, albeit at lower margins than in previous years. When taking on new work the emphasis remains on maintaining utilization rates while assuming responsible project risks.
At Offshore Energy the outlook remains unchanged. The completion of long-term contracts from previous years means increased dependence on the spot market (services), where the pressure on margins in the services part of the market continues to be considerable.
All Towage operations were transferred to joint ventures at the start of 2016. Market volumes have been relatively stable although here too profitability has been lower compared to previous years.
To respond to these market developments Boskalis launched a fleet rationalization and cost reduction program last year. A large part of the fleet rationalization program was already carried out in 2016 in addition to impairment charges related to part of the offshore fleet and associated goodwill. The final part of the cost reduction program is aimed at lowering costs at head office. The conclusions of the study will be announced soon.
The project-based nature of a significant part of our activities, in addition to the uncertain market conditions, makes it difficult to give a specific quantitative forecast with regard to the 2017 full-year result early on in the year. It is, however, clear that the net result will be lower than the result for 2016 adjusted for impairment charges.
Boskalis’ financial position remains strong; the balance sheet is now net debt-free and the financial covenants agreed with the debt providers are comfortably met. Capital expenditure is expected to total around EUR 250 million in 2017, excluding possible acquisitions. This amount will be financed from the company’s own cash flow.