Royal Vopak reconfirmed its strategic priorities at its capital markets day, emphasizing improvements in financial performance, sustainability, and growth in industrial and gas terminals. The company also reinforced its commitment to energy transition infrastructure.
During the event, Vopak executives presented updates on strategy execution, market trends, and financial goals. A live webcast of the event is available on the company’s website, along with recorded presentations.
Key Announcements:
- Increased Operating Cash Return Target: Raised to above 13%, up from the previous 12% target.
- €1 Billion Additional Investment in Gas and Industrial Infrastructure: Raising the total commitment to €2 billion by 2030.
- €1 Billion Investment in Energy Transition Infrastructure: Focused on sustainable solutions.
- Disciplined Capital Allocation: Maintaining a proportional leverage ratio of 2.5-3.0x while ensuring strong shareholder returns.
- Progressive Dividend Policy: Commitment to increasing dividends and evaluating a share buyback program annually.
Enhancing Financial and Sustainability Performance
Vopak continues to improve its financial strength and sustainability efforts. The company raised its operating cash return target to above 13%, reflecting three years of strong strategy execution.
Operating cash return is calculated as proportional operating cash flow over proportional capital employed, highlighting the growing importance of free cash flow and joint ventures. This metric ensures Vopak remains resilient despite market fluctuations.
Expanding Industrial and Gas Terminal Footprint
Vopak has already met its €1 billion investment target in gas and industrial terminals ahead of schedule. A majority of these investments focus on gas infrastructure, addressing energy security and affordability. Key growth markets include India and China.
Given strong market demand, Vopak aims to invest an additional €1 billion by 2030, bringing total investments in gas and industrial terminals to €2 billion. These projects, backed by customer commitments, will drive steady long-term cash flow.
Accelerating Energy Transition Infrastructure
Vopak remains committed to investing €1 billion in energy transition projects by 2030. The company follows a disciplined and selective investment approach, ensuring a balanced risk-return profile.
Key focus areas include:
- Low-carbon fuels and sustainable feedstocks
- Ammonia as a hydrogen carrier
- Liquid CO₂ storage solutions
- Battery energy storage infrastructure
Additionally, Vopak plans to repurpose existing oil storage capacity in strategic hub locations for low-carbon fuels and sustainable feedstocks.
Positioned for Future Growth
CEO Dick Richelle stated, “We have successfully increased cash returns and met our €1 billion capex target ahead of schedule. This strong position enables us to pursue additional growth in gas, industrial, and energy transition infrastructure. Our ‘Improve, Grow, Accelerate’ strategy provides a solid foundation for future expansion”.
As per the press release, with clear financial discipline, sustainable investments, and a strong market outlook, Vopak remains well-positioned to drive long-term growth and shareholder value.
