Boskalis jaarverslagen 2011

Other financial information

Depreciation, amortization and impairments amounted to EUR 236 million in 2011 (2010: EUR 220 million). The increase was largely attributable to the effect of consolidating SMIT for an additional quarter (three quarters in 2010) and the additional 50% stake in Rebras acquired in early 2011.

In 2011, a net impairment charge of EUR 6.4 million was taken on several units of equipment (2010: EUR 8.7 million).

The result from associated companies was EUR 2.0 million. In 2010 the result was EUR 25.0 million, which was for the most part connected with a revaluation gain on the stake held in SMIT directly prior to the public offer being declared unconditional.

Because of the lower result, the tax burden also declined in 2011, to EUR 54.7 million (2010: EUR 77.1 million). The effective tax rate fell to 17.3% (2010: 19.8%), partly because a relatively larger share of the result was realized in countries with a lower tax rate.

In 2011, the return on equity was 15.4% (2010: 21.7%).

Capital expenditure and balance sheet

In the year under review, a total amount of EUR 292 million was invested. Important investments concerned the construction of the new Rockpiper fallpipe vessel to cater to the oil and gas industry and the offshore wind market. The ship is scheduled for delivery at the end of March 2012. During the past year, the company also invested in the conversion of the Taurus II mega cutter and reconstruction work started on the WD Fairway, a 36,000 m3 mega hopper. The ship is expected to be taken into service in the course of 2013. Other investments concerned two new multifunctional cable laying/offshore vessels, the construction of the Asian Hercules III (5,000 MT floating sheerleg crane for the Asian Lift JV) and various smaller investments at Terminal Services, Harbour Towage, Salvage and Transport.

In 2011, a number of older dredging vessels, including the Cornelia, Puerto Mexico, Atlantico and Alpha B, were taken out of service and will be scrapped at certified yards adhering to strict environmental standards. In addition, the lease contract for the American trailing suction hopper dredger, the Stuyvesant, was terminated at the end of the year. The age of the ship and the limited opportunities on the American market meant that extending the lease contract was not an attractive option.

Capital expenditure commitments as at 31 December 2011 increased to EUR 193 million (end-2010: EUR 93 million). These commitments mainly concern the aforementioned investments, six new tugs for the Brazilian market and the expansion of the head office in Papendrecht.

During the year under review, EUR 105.3 million was spent on acquisitions. This mainly concerned the acquisition of the 50% stake in Rebras and the entire share capital of MNO Vervat. The sale of the Terminal activities to Lamnalco generated net cash proceeds of EUR 83 million. Lamnalco financed half of the transaction amount by means of a capital contribution from both shareholders, with the remainder being financed through a bridging loan provided by Boskalis. After the forthcoming refinancing of Lamnalco in 2012 Boskalis will receive further net cash proceeds of EUR 83 million. An amount of EUR 20 million was spent on acquiring the remaining 2% of shares in SMIT.

Cash flow declined to EUR 497 million (2010: EUR 532.5 million).

The cash position was EUR 383 million at the end of 2011. Of the total cash position, EUR 225 million was freely available and EUR 152 million was tied up in associated companies and projects being executed in conjunction with third parties.

The company’s solvency ratio was 37.4% at 31 December 2011. At end-2010 the solvency ratio was 37.1%.

Interest-bearing debt totaled EUR 792 million at 31 December 2011 and the net debt position stood at EUR 410 million (end-2010: EUR 450 million). The majority of the debt position consists of long-term US Private Placement (USPP) loans and drawings on the three- and five-year bank facility taken out, partly in connection with the financing of the SMIT acquisition. Boskalis must comply with various covenants as agreed with the syndicate of banks and the USPP investors. These agreements were comfortably met as at 31 December 2011. The main covenants relate to the net debt : EBITDA ratio, with a limit of 3, and the EBITDA : net interest ratio, with a minimum of 4. At 31 December 2011, the net debt : EBITDA ratio stood at 0.7 and the EBITDA : net interest ratio at 16.6.

Added to My report add to My report Source: Annual review 2011, Report of the Board of Management, page 39