2020 audited results: Solid cash flow despite challenging market conditions
The Company only recently completed the audit on the Vroon Group 2020 results and has now published its 2020 Annual Report. Highlights from this Report are provided below.
Vroon has a substantial presence in the global offshore-support-vessel market, through its Vroon Offshore Services (VOS) business segment. This business was negatively impacted during 2020 by a severe downturn in Oil & Gas markets, largely the consequence of the global COVID-19 pandemic. Vroon’s other businesses were also negatively affected by the COVID-19 pandemic, but to a lesser extent. Net revenues in 2020 amounted to USD 356m, EBITDA from operating activities was USD 74m and net result was USD -314m, mainly the result of a USD 214m non-cash asset impairment. Continued losses and asset impairments over the previous five years resulted in a negative Group equity per year-end 2020.
The Managing Board implemented measures to reduce costs and preserve cash generation, which remained strongly positive during the year. In 2020, Vroon divested 18 vessels that were deemed to be either uneconomical or non-strategic.
Despite this disappointing financial performance during 2020, Vroon’s focus remained on providing high-quality services to our clients and on an ongoing commitment to our Leaders in Safety programme, supported by dedicated colleagues at sea and ashore.
Overall, 2020 was another turbulent year for the global shipping industry and for Vroon. As in previous years, most of our businesses were affected by significant market volatility. While we are proud of our achievements during the year, we do realise that it will take more time before shipping again becomes a rewarding place for investors and financiers.
Improved results during 2021 compared to 2020 and improving outlook
During 2021, market conditions improved gradually for most of our businesses, although the impact of the continuing COVID-19 pandemic was reflected in crew costs and other voyage-related expenses. Our Offshore Division saw oil prices recover from the very low levels in 2020 and our Deepsea Division benefitted from increasing trade flows and regional tonnage shortages. As part of our ‘Vroon as a platform’ strategy, which was launched in 2020, and agreements with our lenders to dispose of non-strategic businesses in order to repay debt, we made the decision to divest our container, dry-bulk, crew-transfer vessels and car carriers. At the same time, we consolidated and expanded our market position in our other Offshore and Deepsea activities. During the year, we disposed of 18 vessels and largely completed our fleet-disposal process. Cash generation remained strong and we anticipate financial results will be an improvement on 2020, despite a smaller fleet.
We are cautiously optimistic for 2022 and anticipate a continued improvement for our Offshore Division and most of our remaining Deepsea businesses.
Headline agreement reached with lenders on debt restructuring to secure financial flexibility to deliver on future growth and profitability
For several years Vroon has been in discussions with its lenders to resolve its over-indebtedness. We are pleased that we were finally able to reach a headline agreement with our lenders in November 2021 that will result in a significant debt reduction. This, together with book profits realised from vessel disposals during 2021, will lead to a very significant strengthening of the Company’s balance sheet and allow for continuity of the Company going forward. In return for the debt write-off, the Company lenders will become the majority shareholders of Vroon. This agreement is still subject to formal approvals and is expected to be implemented in the first half of 2022.
We are grateful for the support our lenders have provided in the past years and believe that, with the restructuring agreement implemented, Vroon has a clear path forward and will continue to provide safe, reliable and high-quality services to our clients, supported by our dedicated colleagues at sea and ashore.
About Vroon
Vroon is an international shipping company, with more than a century's experience and a professional shore-based staff of about 350 and around 2,000 marine personnel worldwide.
Vroon operates and manages, under different brand names, a diverse fleet of approximately 130 vessels (as per, year-end 2020) with a substantial presence in the offshore-support market. Vroon is active – through various subsidiaries and under different brand names – in the following business segments: livestock carriers; offshore-support vessels; offshore installation, maintenance and engineering services; dry-cargo vessels; container vessels; product tankers; high-heat tankers; car carriers and vessel-management services.
Press Contact Vroon
Christopher Savoye | +31 762068100 | christopher.savoye@vroon.nl | www.vroon.nl
This press release and the accompanying photo can be used royalty-free.
See also: https://www.vroon.nl/news