VOPAK: Strong results and positive trend in guidance

Group earnings were better than expected
Clean EBITDA was € 186.2m (KBC: 175.0, CSS 171.0) and clean EBIT was € 138.0m (KBC: 130.0, CSS: 126.0). Exceptionals were tiny vs. € 127.8m in 1Q11 related to the sale of the Borco terminal. Operating earnings were enhanced by € 3.5m y/y due to currency movements (stronger $ ). Earnings growth was mainly driven by capacity expansion (notably Netherlands) and an improvement in occupancy to 93% vs. 92% last year. Management reports strong demand in oil and chemicals, and they see some improvements in biofuels although that segment remains volatile. Clean EBIT rose 26% y/y, of which subsidiaries rose 27% and associates rose 24%.

New guidance implies consensus will have to move up a bit:
Management does not rule out that in 2012 they will be able to reach the low end of their 2013 target of clean EBITDA of between € 725-800m. Our current estimate for 2012 is € 710m so we will have to move up by 3-5%. BB reveals that other estimates are roughly in line with our estimate, or already at the low end of the 2013 target. On balance, consensus has to move up a notch.

Holland rules the waves:
Earnings growth was highest in the Netherlands division (+37% to € 45.9m), followed by Asia (+13% to € 53.6m), North America (+8.2% to € 10.6m), EMEA (+8% to € 24.1m), and Latin America (+1% to € 7.4m). Overhead was € -8.6m vs. € -8.9m a year ago and LNG was € 5.0m vs. € -2.0m a year ago so it swung around by € 7.0m due to commissioning of the GATE terminal and the acquisition of the Altamira terminal. Occupancy was between -1% and +1% y/y for most divisions, except for North America where occupancy rose 600bp to 97%. Group occupancy was 93% vs. 92% a year ago. Earnings growth in the Netherlands is driven by commissioning of several very large terminals in the course of 2012.

Expansion continues:
Projects under construction will add 5.6m cbm in the period 2012-2014, resulting in gross capacity of 33.9m cbm. The total investment amounts to € 1.6m, of which the remaining amount for Vopak amounts to € 400m.

Estimates under review, should go up say 3-5% on EBITDA level. TP should also go up a bit.