Feb 25 (Reuters) - Tank storage group Vopak's net profit surged 61% to 604 million euros ($713 million) last year, driven by strong occupancy and cash flow generation, it said on Wednesday. The Dutch
Vopak Plans $2 Billion Return to Investors Amid Strong Profits
By Lucie Barbier and Hugo Lhomedet
Feb 25 (Reuters) - Tank storage group Vopak said on Wednesday it would return 1.7 billion euros ($2.0 billion) to shareholders over the next five years, after its profit surged 61% last year on the back of strong cash flow.
Vopak's Financial Strategy and Shareholder Returns
Its shares jumped around 10% in early Amsterdam trading following the earnings release.
The Dutch company, which provides storage and handling services to the energy and manufacturing end markets, said the distribution would be made through dividends and share repurchases through 2030.
The plan consists of annual increases of at least 5% in the per-share dividend and a multi-year share buyback programme of up to 500 million euros, Vopak said.
Profitability and Cash Flow Achievements
Based on last year's 604 million euro profit and record operating free cash flow of 823 million euros, the Rotterdam-based company will propose a 12.5% hike in its annual dividend to 1.80 euros per share.
It also raised its long-term operating cash return target to between 13% and 17%, having guided for more than 13% previously.
Finance chief Michiel Gilsing told Reuters the improved cash generation stemmed from replacing ageing infrastructure with modern storage facilities that require lower maintenance spending.
Future Investments and Infrastructure Plans
Vopak aims to invest 4 billion euros in new infrastructure by 2030, half of which has already been committed in 2025.
Challenges in the Chemical Storage Sector
CHEMICAL CUSTOMERS PRESSURED BY TARIFFS
Vopak's chemical storage business has come under pressure as customer demand softened due to global trade tensions, Gilsing said.
"All these tariffs ... obviously (don't) help the economy growing ... and that's where you also see some of our chemical customers really have challenges," he said.
However, he added the impact of Vopak's business should be limited, as long-term contracts mitigate the damage.
The U.S. imposed a new tariff from Tuesday of 10% on all goods not covered by exemptions, the rate first announced by President Donald Trump on Friday rather than the 15% he promised a day later.
($1 = 0.8481 euros)
(Reporting by Lucie Barbier and Hugo Lhomedet in Gdansk, editing by Milla Nissi-Prussak)
