Beneficial interest AvH: 60.40% (control: 100%)
AvH Contact: Koen Janssen
Since DEME was able in the course of 2015 to finish a number of major projects (Wheatstone and Hay Point in Australia, Suez Canal in Egypt, Doha New Port in Qatar, Northwind and Gode Wind offshore wind farms), some of which extended over several financial years, and certain big new projects were still in their start up phase in 2015, the turnover (economic turnover, i.e. including the jointly controlled group companies on a proportional basis) for 2015 amounted to 2,351.0 million euros, or 9.1% down on the previous year. Nevertheless, the operating result that was realized on this turnover was excellent: the EBITDA increased from 501.5 million euros (19.4%) in 2014 to an exceptionally good 558.4 million euros (23.8%).
The strong cash flow generation permitted DEME to end 2015 with only a moderate increase in the net financial debt to 266.7 million euros, after having invested 373.0 million euros in the expansion of its fleet (340.8 million euros net, including the sale of old assets).
The order backlog at the end of December 2015 amounted to 3,185 million euros (2014: 2,420 million euros). New orders were won in 2015 in various regions and sectors, such as the large-scale Tuas project in Singapore. DEME Concessions (DEME 100%) entered into a joint venture to develop the large-scale Merkur offshore wind farm (400 MW) in Germany. GeoSea will begin the installation of the 66 offshore wind turbines in 2016. GeoSea also won a contract worth 340 million euros for the construction of 56 offshore wind turbines on the Galloper project in the United Kingdom, while new contracts were signed by DEME a.o. in Egypt, Panama, Turkey and Norway.
2015 saw the continuation of several long-term dredging contracts.
In Belgium, dredging contracts in the ports of Zeebrugge, Ostend and Blankenberge continued. In January 2015, a new five-year contract was awarded for maintenance dredging on the river Scheldt. In the port of Antwerp, DEME continued to operate Amoras, the largest dewatering plant for dredged material in Europe. In the Netherlands, 2015 was dominated by the ongoing coastal protection works as part of the 290 ha Waterdunen project in Breskens. Other projects by de Vries & van de Wiel include a tulip-shaped archipelago for the town of Zeewolde, the widening of the Juliana Canal, dike reinforcement along the river Lek, the replacement of the Rubis jetty, and dredging of the ‘Donauhaven’ in the port of Rotterdam. In Germany, Nordsee Nassbagger- und Tiefbau secured a two-year maintenance contract on the Weser. The maintenance contracts with water injection on the river Elbe and the Kiel Canal were extended for another year. The UK team won several contracts, such as the project for maintenance dredging in Belfast, which started in December 2015, and the project for the Medway Access Channel in the Thames estuary. In France, DEME carried out maintenance dredging in Bayonne and Gravelines, a dredging campaign with water injection on the Gironde for the Grand Port Maritime de Bordeaux, and dredging, land reclamation and treatment of contaminated sediments for the Grand Port Maritime de Dunkerque. The spectacular projects in La Réunion involved the extension of Port Est and the construction of the Nouvelle Route du Littoral, a 13-km offshore coastal road.
The project for the new Suez Canal was completed successfully and well ahead of schedule. In October 2014, the Suez Canal Authority awarded a contract to the DEME (75%) - Great Lakes (25%) consortium for the realization of an additional 250-metre-wide, 24-metre-deep and 29.5-km-long fairway through the Great Bitter Lake. The access channels to the lake have been widened to 140 metres. For this project, DEME deployed a rarely seen fleet of 4 cutter suction dredgers, 6 suction hopper dredgers and 42 auxiliary vessels, dredging 40 million m³. DEME also landed another contract to dredge the eastern access channels to Port Said. Mersin International Port Management awarded DEME a major contract in Southern Turkey to widen and deepen the fairway, turning basin, harbour basin and approach channel to the jetties. In Algeria, DEME carried out maintenance dredging works in the port of Annaba.
The large contract for the port of Sabetta on the Yamal peninsula, which was carried out by Mordraga, DEME’s Russian subsidiary, involved the widening and deepening of a maritime canal in the river Ob, deepening of the access channel and port basin for the new LNG terminal, and dredging works for two new jetties and the extension of the existing jetty. Mordraga has also successfully completed a maintenance dredging project in St. Petersburg.
In February 2015, Dredging International Asia Pacific won Phase 1 of the Tuas Terminal Project, in a joint venture with the South Korean company Daelim Industrial. This huge project involves the construction of a brand-new logistic hub that is due for completion by 2021. The Jurong Island Westward Extension project is progressing according to plan and will be finished by 2018. It involves the reclamation of around 38 million m³ of new land on Jurong Island, Singapore’s petrochemical hub. In Papua New Guinea, the long-term contract for the removal of mine-derived sediments from the Lower OK Tedi River was extended for a five-year period. Dredging International Australia completed the Wheatstone project for Chevron’s LNG export terminal in Onslow, Western Australia.
DEME reported its busiest year ever on the African continent. At the beginning of 2015, the company secured the three remaining phases of the Atlantic City project, a prestigious development in Lagos. Another long-term project in Nigeria is being carried out through a PPP agreement under the Bonny Channel Company, a joint venture with the National Ports Authority. DEME was also involved in the extension of the service port of Intels in Onne, land reclamation for the Ilubirin Island (Lagos) Lagoon project, deepening works in Cotonou (Benin), extension of the TIL Lomé Container Terminal (Togo), a new fishing port in Abidjan (Ivory Coast), coastal protection works in Ada (Ghana) and maintenance dredging contracts for the ports of Conakry (Guinea) and Soyo (Angola).
In the Middle East, the New Port project in Doha, Qatar, which was awarded in 2012, has been completed, and the first merchant vessels entered the port in December 2015. The works involved dredging the fairway and land reclamation for the economic zone and the new naval base. The other major project in the region that started in 2015 is the real estate development ‘La Mer’, owned by Dubai-based Meraas Development. The new 2.9 million m² land reclamation will comprise residential, commercial and recreational areas.
The most important dredging project to be completed in South America in 2015 was Porto Sudeste in Brazil, where DEME dredged the turning basin and the access channel. In 2016, DEME will carry out maintenance dredging in the inner and outer fairways of the Rio Grande in Brazil, and will further widen and deepen the Pacific access channel of the Panama Canal.
2015 was a good year for International Seaport Dredging (ISD), a subsidiary of DEME, which realized a record turnover, in particular with port extension projects in India. Examples include the projects for Jawaharlal Nehru Port in Mumbai, India’s biggest container port, the Kamarajar port project, the maintenance dredging works in the port of Dhamra, and land reclamation in the port of Kakinada. DEME returned to the Maldives for the second phase of the land reclamation project on the island of Hulhumalé. The aim is to build accommodation for around 100,000 people on the 244 ha of land.
Marine and offshore services
DEME is active in most European countries with an important offshore wind industry.
DEME’s presence and fleet in Germany were stepped up considerably in 2015. In May, DEME formally acquired the assets and personnel of its long-time partner Hochtief Solutions. DEME executed the Transport & Installation (T&I) contract for the foundations of the Gode Wind and Nordsee One offshore wind farms. DEME completed the Engineering, Procurement, Construction & Installation (EPCI) contract for Baltic 2, while DEME subsidiary GeoSea was chosen as exclusive EPCI contractor for the Merkur offshore wind farm. In the United Kingdom, DEME was awarded the EPCI contract for the foundations of the Galloper offshore wind farm of RWE Innogy. In addition, DONG Energy awarded the T&I contract for the Race Bank offshore wind farm to DEME. The EPCI contract for the Kentish Flats Extension offshore wind farm of Vattenfall was completed. Tideway, a subsidiary of DEME, carried out the rock placement works for the Gwynt-y-Môr wind farm.
In Belgium, DEME is preparing the offshore installation works for the Rentel offshore wind farm, which is partly owned by DEME Concessions. Work is expected to begin in 2017.
Oil and gas / Cable laying and rock placement
In the Netherlands, DEME’s subsidiary EverSea, which is specialized in complex offshore marine engineering projects, successfully completed a T&I project on two gas platforms of GDF Suez E&P Nederland. DEME also landed a first T&I contract for the unmanned gas platform with minimal facilities for Oranje-Nassau Energie. Installation is scheduled for mid-2016.
DEME carried out the seabed levelling and erosion protection works for the gas export pipeline of the Wheatstone project (Australia). In the summer, the Rollingstone arrived in Mexico to start rock placement works for several contractors in preparation for pipeline laying for PEMEX. At the beginning of 2015, DEME signed a contract with Saipem for a second project in Venezuela – the ‘PDVSA Dragon’ project.
In 2015, DEME was busy with rock placement works up to 600 metres on the Norwegian plateau while DEME’s subsidiary Tideway worked on several infrastructure projects such as a contract for the protection of a water pipeline crossing over the River Scheldt in Belgium and the Netherlands. In 2016, DEME will perform rock placement works on the Lower Churchill Project in Canada, for the NordBalt project between Sweden and Lithuania and in the Strait of Gibraltar in Spain.
Offshore & Wind Assistance (OWA) executed a maintenance campaign for Senvion on the offshore wind farms Thornton Bank (Belgium), Ormonde (UK), Alpha Ventus and NorseeOst (both in Germany). OWA also provided monitoring and inspection services on the Thornton Bank as part of a long-term framework agreement for services with C-Power. OWA also continued to provide maritime logistics services on the Belgian and German coasts with the maintenance vessels Aquata and Arista. OWA will manage and maintain the infrastructure, except for the turbine, of the future Gemini wind farm in the Dutch North Sea.
The joint venture Combined Marine Terminal Operations (CTOW) continued its contract for the provision of harbour towage services in the port of Onne in Nigeria. In Luanda, Angola, CTOW installed temporary navigation aids to demarcate the deepest section of the access channel in the port.
In view of a weakening oil and gas industry, heavy-lift contractor Scaldis is now focusing on the offshore wind industry (transport and installation works for Luchterduinen, Gemini, Nordsee One, Rampion and Nobelwind) and on the decommissioning of oil and gas platforms. Rambiz 3000, the heavy-duty crane vessel, will remove three platforms in the southern North Sea for Perenco, and 11 platforms for ConocoPhillips over the next three years, in a joint venture.
With several soil and sediment recycling centres in Belgium and the Netherlands, DEME’s environmental firms (DEC, de Vries & van de Wiel, and Ecoterres) remediated more than 1.25 million tonnes of polluted soil and dredged sediments in 2015, which makes them market leaders in this field in Belgium and the Netherlands. In addition to those recycling centres, Ecoterres opened a new treatment plant in France (Bruyères-sur-Oise).
DEC worked on several brownfield projects in Belgium (Bekaert in Zwevegem and Hemiksem, and Bayer in Ghent) and treated dredged sediments at its centres in Belgium for NV Waterwegen en Zeekanaal (the Belgian inland waterways authority). Ecoterres and its specialist dredging subsidiary Kalis completed a four-year maintenance contract for the Walloon waterways. In Balen, DEC is currently involved in a project to dehydrate process residues of Nyrstar.
DEC won its first contract from ExxonMobil. Together with the Norwegian company Veidekke Entreprenør AS, DEC will remediate the site of a former refinery. Completion is due by 2019.
At the end of 2015, DEME set up a new division comprising two new entities, specializing in marine civil engineering: DEME Infra Sea Solutions (DISS) and DEME Infra Marine Contractor (DIMCO). In this way, DEME wants to offer its customers global and integrated solutions in dredging and marine civil engineering. As part of this process, the entities CFE Nederland BV and GEKA Bouw BV were repositioned under DIMCO, along with part of the workforce of the civil engineering division of CFE Belgium. From now on, the group’s marine and river civil engineering activities will be carried out exclusively by DISS and DIMCO (subsidiaries of DEME).
At the beginning of 2016, DIMCO won a contract in a joint venture with a local contractor for the construction of a 400-metre-long seawall for a new offshore terminal in the Rotterdam Maas-vlakte. The work will be finished by the beginning of 2017.
Despite the continuing recession in the European construction industry, 2015 was a busy year for DEME Building Materials. Several major projects in the Benelux area were successfully completed, such as the supply of sand and gravel for the construction of the new Kieldrecht lock in the port of Antwerp, the largest lock in the world. The construction market in the United Kingdom was remarkably buoyant, and demand is expected to continue in 2016. In 2015, DBM brought the new and unique treatment plant in Boulogne-sur-Mer in France into use.
OceanflORE is a 50/50 joint venture between IHC Merwede and DEME which focuses on valuable deep-sea mining solutions. In 2015, OceanflORE carried out research and design work for the excavation of the deposits, their vertical transportation to the surface, and on board processing.
DEME Concessions provides resources, including venture capital and project-specific knowledge, to carry out DEME’s marine activities, and supports the different entities of the group.
DEME Concessions holds a stake in the second Coentunnel project in Amsterdam, including a 24-year maintenance contract. In the Democratic Republic of Congo, a PPP agreement was signed with Congolaise des Voies Maritimes for a ten-year concession for dredging works on the Congo River.
Together with the other shareholders of Otary, DEME Concessions Wind holds three Belgian concessions for offshore wind farms: Rentel, SeaStar and Mermaid. Rentel will finalize the funding for its project by the summer of 2016. Power@Sea (a joint venture with SRIW/SOCOFE) is also one of the founding partners of the first Belgian offshore wind farm, C-Power. DEME Concessions has a 12.5% stake in the 400 MW Merkur offshore wind farm in the German part of the North Sea. Funding is expected to be finalized by mid-2016. DEME Blue Energy (DBE; DEME 70%, PMV 30%) focuses primarily on the development of tidal and wave energy. In Scotland and Ireland, DBE, in a 50/50 joint venture with NUHMA (DEME’s partner in C-Power and Otary), and together with a local partner, holds two concessions for tidal energy: the West Islay Tidal Energy project and Fair Head Tidal Energy Park.
Global Sea Mineral Resources (GSR) is the subsidiary of DEME that specializes in the development of sustainable deep-sea mining. In January 2013, the International Seabed Authority and GSR signed a 15-year contract for prospecting and exploration for polymetallic nodules. After GSR’s first expedition in the Central Pacific in 2014, a second campaign in 2015 made a careful study of three smaller areas.
A well-filled order book puts DEME in a good position for 2016.