Royal Boskalis Westminster NV, the world’s biggest dredging company, said it won’t be able to match its 2010 profit before 2013 and may spend 1 billion euros ($1.4 billion) modernizing its fleet. The shares dropped.
“Although the long-term drivers are positive, we expect volumes and prices to be under pressure in the near term, particularly at the lower end of the market,” the company said in its annual report today. “We believe in 2013 we should be able to match the historic annual result achieved in 2010.” Boskalis said March 17 it didn’t expect this year to match the results of 2010, when net income was a record 311 million euros.
Boskalis, based in Papendrecht, the Netherlands, is still integrating Smit International NV, the dredging company it agreed to buy for 1.1 billion euros in 2009, when the global financial crisis hit the construction and dredging industry. Smit also operates tugboats in ports including Rotterdam, raises pontoons for offshore construction and tows vessels to oil and gas terminals.
Boskalis declined as much as 5.1 percent to 36.08 euros in Amsterdam, the biggest intraday drop since August. The stock traded 4 percent lower at 36.51 euros as of 2:37 p.m., giving the company a market value of 3.69 billion euros.
Boskalis will “further explore a possible merger of Smit Terminals and Lamnalco,” an offshore towage company in which it aims to keep a 50 percent stake, according to the report. It also may look at purchasing “bigger-sized companies” in the harbor towage and dredging segment, Chief Executive Officer Peter Berdowski said in a presentation that was webcast today.
Boskalis expects to “renew and expand parts of the fleet” for a total investment of about 1 billion euros.