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(Sharecast News) - Royal Vopak reported record 2025 results on Wednesday, and unveiled plans to return 1.7bn to shareholders through 2030, after net profit surged 61% on strong cash generation.
The Rotterdam-based tank storage group posted net profit of 604m for 2025, while proportional EBITDA rose to a record 1.184bn.
Operating free cash flow reached 823m, described by Reuters as a record level, supported by improved cash conversion of around 70%.
Earnings per share increased 68% to 5.23, reflecting higher net income and a reduced share count following buybacks.
Shares rose about 10% in early Amsterdam trading following the results, Reuters reported, with the stock moving close to its 52-week high.
Vopak announced a shareholder distribution programme of around 1.7bn through the end of 2030, comprising progressive dividends and a multi-year share buyback of up to 500m.
The company proposed a 12.5% increase in its annual dividend to 1.80 per share for 2025, marking a 50% rise since 2021, and said it aimed to grow the dividend by at least 5% per year.
It said the first 100m tranche of the buyback was expected to be executed over the next 12 months.
The company also raised its long-term operating cash return target to between 13% and 17%, up from a previous ambition of above 13%, after operating cash return improved to 15.6% in 2025 from 10.2% in 2021.
Finance chief Michiel Gilsing told Reuters that stronger cash generation was partly due to replacing ageing infrastructure with modern facilities requiring lower maintenance spending.
Operationally, occupancy remained resilient at 91.4%, slightly below 2024 levels.
Segmentally, the industrial division delivered 15% EBITDA growth, while oil storage EBITDA rose modestly.
Gas segment earnings declined year-on-year, partly reflecting portfolio changes and prior-year one-offs.
Vopak continued to reshape its portfolio, completing divestments in Korea, Barcelona and Venezuela, establishing a presence in Oman and finalising the IPO of its Indian joint venture AVTL, as highlighted in the earnings call transcript published by Investing.com.
The group had committed around 1.9bn to growth investments since 2022 and reiterated its ambition to invest 4bn by 2030 in gas, industrial and energy transition infrastructure.
Major projects included the REEF LPG export terminal in Canada and the fourth tank expansion at the GATE terminal in the Netherlands, both expected to contribute more fully from 2027.
For 2026, Vopak guided to proportional EBITDA of 1.15bn to 1.2bn and operating free cash flow of around 800m, incorporating an estimated 20m negative foreign exchange impact.
Addressing market conditions, Gilsing told Reuters that global trade tensions and new US tariffs were weighing on chemical customers, though the impact on Vopak was mitigated by long-term contracts.
Approximately 70% of revenues are expected to be generated from contracts longer than three years, up from about 60% in 2021.
While developments in carbon capture and ammonia supply chains were progressing more slowly than initially anticipated, management said it remained confident in growth opportunities in low-carbon fuels, feedstocks and battery infrastructure, and in its ability to combine investment plans with enhanced shareholder returns.
At 1158 CET (1058 GMT), shares in Koninklijke Vopak were up 8.14% in Amsterdam at 47.04.
Reporting by Josh White for Sharecast.com.