Koninklijke Vopak Uns/Adr

Hello and welcome to the Royal Ropac Q3 2024 update. Throughout the call, all participants will be in listen-only mode and afterward, there will be a question and answer session. This call is being recorded. I am pleased to present Fatiana Topseo, Head of Investor Relations. Please go ahead with your meeting.

Good morning, everyone, and welcome to our third quarter 2024 results call. My name is Fathiona Topcu, Head of IR. Today, our CEO, Sudhik Rishal, and CFO, Mihail Hilsing, will guide you through our latest results. We will refer to the Q3 2024 analyst presentation, which you can follow on screen and download from our website. After the presentation, we will have the opportunity for the Q&A. A replay of the webcast will be made available on our website as well. Before we start, I would like to refer to the disclaimer content of the forward-looking statement, which you are familiar with. I would like to remind you that we may make forward-looking statements during the presentation, which involve certain risks and uncertainties. Accordingly, this is applicable to the entire call, including the answers provided to the question during the Q&A. And with that, I would like to hand over to this.

Thank you very much, Facciona, and a very good morning to all of you joining us in the call today. Let's move to the key highlights for this quarter. The need for our services remained strong across the portfolio and that resulted in a proportional occupancy rate of 92%. We continue to serve our customers very well. At the same time, we reported improved financial performance, growing our proportional EBITDA when adjusting for divestments with 11% year-on-year to €894 million year-to-date. Also, our operating cash return improved year on year to 16.2%. That was driven by strong performance of the business and contributions from growth projects, as well as lower capital employed due to the divestments of last year. Our joint venture in India has undertaken a primary equity issue of 3.4% for an amount of 88 million euros and continues to explore options to fund growth. With the year progressing, we are confident to update our outlook for proportional EBITDA and consolidated EBITDA. And Michiel will explain in more detail later. Today, we announced an expansion in our joint venture, Aegis Vopak, in India. And we will build 94,000 cubic meters of storage capacity for liquids and strengthen our leading position in the port of Kampla in China. we commissioned a new Greenfield Industrial Terminal, and that is marking our seventh terminal in the country. More than half a million cubic meters of industrial connected capacity became fully operational. The Weijou Terminal, as it's called, represents a significant milestone as the 18th industrial terminal in our global portfolio. And we continue strong execution in our strategy to grow our footprint in industrial and gas terminals. Let's move to Accelerate, because we are taking next steps in our VoPak Energy Park Antwerp related to redeveloping of that strategic plot of land. We announced that we are supporting Vioneo with the storage of green methanol. Vioneo is a company founded by AP Muller and that aims to develop a facility for the production of fossil-free plastics. We will provide the land. storage capacity and handling services, while Vioneo is planning to invest in the production plant. And most recently, we launched a market consultation to evaluate the market interest to store ammonia at this site in Antwerp. Also, with regards to infrastructure for CO2, we're making progress because we signed a memorandum of understanding in Australia to develop common user infrastructure in the north of the country. We recently also inaugurated Volpac offices in Saudi Arabia and in Japan, positioning ourselves closer to important regions and developments that will further support our strategic priorities. We are well positioned to accelerate towards new energies and sustainable feedstocks, and we are pursuing market opportunities. Now let's have a closer look at our financial performance and how markets have developed in the third quarter. The impact of divesting our chemical distributions terminal in Rotterdam and in Savannah in 2023 was 63 million year-to-date. This is fully offset by contributions from growth. These contributions are to a large extent driven by our Ames energy terminal here in the Netherlands. Currently, we are dealing with some temporary technical challenges that have some financial implications, which we are confident that it can be resolved during 2025. As we continue to work hard with all stakeholders to implement a solution, the terminal remains fully operational. In the gas markets, we observe a robust demand for our services. This demand is evident in the LPG sector, particularly in India, but also in the energy sector, for example in Colombia. Chemical markets show a mixed bag, with solid performance in the US, while Asia-Middle East markets remain under pressure. Despite these developments, the need for our infrastructure remains healthy. Energy markets, which we support with oil terminals, remain strong, leading to high occupancies in our main hub terminals. And despite some market challenges in Mexico, demand in the oil distribution terminals also remained firm. So partly offsetting for increased expenses and negative currency effects, We improved our performance by 92 million euro, of which 30 million euro by improving performance of our current network. Now let's move to India. As we announced yesterday, we reached an agreement for a primary equity issue to investors for an amount of 88 million euros for 3.4% of share capital. We're pleased to welcome a new investor on board. and the capital raised will be supporting, among others, our growth aspirations in India. The joint venture with Aegis, which was successfully completed in June 2022, is the largest independent tank storage operator in India. Currently, the network consists of 1.5 million cubic meters, and multiple growth projects are ongoing in six strategically located ports across the country. The joint venture continues to explore options to fund growth through potential fundraise. Now let's move to the next strategic pillar of our strategy, growing our base in industrial and gas terminals. This quarter, we commissioned a greenfield terminal in a new location, Weizhou, in China. With this terminal, we support a world-scale, flexible-feed steam cracker of our customer, ExxonMobil. This terminal represents a significant milestone as the 18th industrial terminal in our global portfolio and the 7th in China. We rationalized our footprint in China over the last years, focusing more on industrial and gas capacity and delivering stable results. Over the last decade, we've been able to increase our global industrial capacity by 70% to 9 million cubic meters in, as we said, 18 industrial clusters globally. A strong track record. in our strategic priority to grow in gas and industrial footprint as well as successfully delivering projects and growth in India. In recent years, we've taken significant steps to shift our portfolio towards assets that yield higher quality earnings. The exposure to commodity markets, particularly in oil and chemicals, has been reduced over time. The proportion of these terminals in our portfolio capital allocation has decreased from roughly 90% a decade ago to around 50% today. Over 500 million euros from divestment proceeds have been reinvested primarily in industrial and gas terminals. This is also reflected in a proportional EBITDA per terminal type, which is more and more diversified over the last decade, especially increasing the share of industrial and gas terminals. These actions have ultimately resulted in an improved trend in the operating cash return. Now looking at our third strategic pillar, to accelerate towards infrastructure for new energies and sustainable feedstocks. We progressed in redeveloping Volpac Energy Park Antwerp. The former refinery and existing tanks are being demolished and the land is further prepared for new developments. We're aiming to develop storage infrastructure for green methanol in order to support the announced facility for the production of fossil-free plastics. Recently, we also announced a market consultation to evaluate interest in the development of infrastructure for ammonia. Great developments which leverage the strategic plot of land in the port of Antwerp on the one hand, and our expertise in storing and handling these products on the other hand. and these developments fit well in our strategy to accelerate towards new energies and sustainable feedstocks. So to summarize, we continue to deliver another strong quarter with improved financial results and a stable high occupancy rate. Our joint venture AVTL reached agreement for primary equity issue and we continue to explore options to fund further growth in India. and we're updating our full-year proportional and consolidated EBITDA. Our investment in industrial and gas terminals has progressed significantly, with 900 million euro already invested towards our ambition to invest 1 billion euro. We drive progress by accelerating towards new energies and sustainable feedstocks. With that, I want to hand it over to Michiel, who will give you more insights on the financial aspect year-to-date and for the third quarter. Miriel.