MOSCOW (MRC) -- Vopak (Rotterdam, Netherlands) has reported a 71% year-on-year (YOY) plunge in net profit including exceptional items to EUR79.5 million (USD94.5 million) for the third quarter of 2020, on sales that dipped 4% to EUR297.0 million, reported Chemweek.
Its net earnings are down 31% sequentially on the second quarter, although sales rose by EUR4.6 million compared to the previous quarter.
Excluding exceptional items, net earnings were down 9% YOY to EUR82.9 million and almost flat with the second quarter. Vopak in September announced the acquisition jointly with investment firm BlackRock of three industrial terminals from Dow on the US Gulf Coast for USD620 million, and says an exceptional item for transaction-related costs of EUR4.4 million was recognized in the third quarter.
The company also announced a 20,000-cubic meter expansion of its terminal at Alemoa, Brazil, specifically for chemical products. “The expansion will further strengthen the position of Vopak in the port of Santos, the biggest port in Latin America,” it says. Commissioning of the additional storage is expected to take place in the second quarter of 2023, subject to construction permit approval, it adds.
Planned inspection and maintenance out-of-service capacity at subsidiary companies, mainly at terminals in Rotterdam and Singapore, totaled 1.1 million cu meters in the third quarter, a decrease compared to the previous quarter this year. Cost efficiency measures are “progressing well and tracking below our revised target of €600 million for the year,” it says.
It had also delivered 169,000 cu meters of new capacity by the end of the quarter at its terminals in: Durban, South Africa; Merak, Indonesia; and Vlissingen, the Netherlands. Vopak says it expects to make growth investments of between EUR500-600 million, including the Dow transaction, in 2020. The Dow deal is expected to conclude by the end of this year, and will add 852,000 cu meters of storage capacity.
It adds that it aims to allocate EUR300-350 million of growth investments in 2021 through existing projects already sanctioned, new business development, and pre-final investment decision feasibility studies in new energies including hydrogen.
Vopak’s worldwide storage capacity at the end of the third quarter was 34.6 million cubic meters, down 0.9 million cu meters on the prior-year period but up slightly from the second quarter of 2020. Its proportional tank storage occupancy rate rose by 9% YOY to 92%,
In chemicals, Vopak says storage was stable in the third quarter, with reduced throughput and different demand patterns for durable and non-durable products. There was a “slight volume improvement in key end-markets, including automotive and construction, during the quarter, it says. In its gas storage business, it says the sharp rebound in naphtha prices in the third quarter has increased the appeal for liquefied petroleum gas (LPG) cracking.
As MRC informed earlier, Indonesia's largest petrochemical producer Chandra Asri and Netherlands-based storage and terminal operator Vopak are planning to set up an infrastructure joint venture in Indonesia. The two companies signed a letter of intent on 5 October to set up the partnership, which aims to establish a new jetty and tank farm business that will serve third-party customers and to build secondary infrastructure at Chandra Asri's new petrochemical complex.
Chandra Asri's second petrochemical complex will include a 1.1mn t/yr naphtha-based cracker, 450,000 t/yr high-density polyethylene (HDPE) unit, 300,000 t/yr low-density polyethylene unit (LDPE) and a 450,000 t/yr polypropylene (PP) unit. The producer is aiming to commission the complex in 2024, barring any delays because of the Covid-19 pandemic. Chandra Asri currently operates a 136,000 t/yr HDPE unit, two linear low-density polyethylene/HDPE swing units with nameplate capacity of 200,000 t/yr and 400,000 t/yr respectively and a 590,000 t/yr PP plant at its complex in Cilegon.
Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).
According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC