Van Oord Believes in Offshore Wind Despite Risks

Offshore wind has proven to be ”a solid third foundation” in Van Oord’s business strategy in recent years, but the industry is set to remain a high-risk proposition due to its dependence on the political support of governments in northwest Europe, the Dutch dredging, marine engineering, and offshore energy specialist said in its financial report for FY 2015.

Concerns about global warming, recently confirmed by the climate agreements in Paris, and the long-term aim of reducing consumption of fossil fuels are leading to an increase in the use of wind energy, specifically in northwest Europe, according to Van Oord.

Looking ahead, Van Oord believes that the offshore wind industry offers many opportunities despite its dependence on government subsidies.

The company ended 2015 with a record revenue of EUR 2.579 billion, a 23% increase compared to EUR 2.104 billion.

The record revenue for the year also brought a record net profit of EUR 169 million, as compared to EUR 119 million net profit in FY 2014.

Strong figures are partly attributable to completion of Luchterduinen offshore wind farm, and a fast-tracked execution of the Gemini wind farm, Van Oord said.

”2015 was a busy year for the Offshore Wind Projects business unit, with activities for major projects such as Luchterduinen and Gemini reaching their peak. The Aeolus and the Nexus, our new vessels, performed very well. The market for large-scale offshore wind parks is growing rapidly. Offshore Wind Projects is a relatively new business unit and Van Oord has invested a considerable amount of capital in it in recent years. We often act as EPC contractor for offshore wind park projects. In other words, we assume responsibility for the engineering, procurement and construction of the wind park. In some cases, for example the construction of the Gemini wind park, we are also one of the shareholders,” Pieter van Oord, Van Oord CEO, said.

The company’s order portfolio totalled EUR 2.349 billion at year-end 2015 down 27% on EUR 3.222 billion recorded in 2014. The order portfolio was down due to fewer than expected new projects in the company’s Oil & Gas and Wind sectors, as well as the drop in oil prices.

”We operate in volatile markets. We expect market conditions to remain difficult in the coming years. Low oil prices and slower growth in markets that are important for us have put pressure on prices and reduced market volume. We are optimistic about the wind market for the next few years. We are confident about the future, thanks to the company’s strong financial position,” van Oord said.