Royal IHC reports 40 per cent revenue jump and recovery from negative operating result in 2024
Dutch engineering specialist Royal IHC said the year 2024, "marks a turning point," for the company, as the, "positive results of the strategic review and restructuring in 2023 have created the foundation for further growth."
Royal IHC's revenue increased by 40 per cent in 2024 to €436.4 million (US$507 million). Although the year ended with a net loss of €33.4 million (US$38.8 million), the operating result turned positive at €1.4 million (US$1.6 million) from negative €31.2 million (negative US$36.3 million) in 2023.
At the end of 2024, the orderbook stood at approximately €400 million (US$460 million).
"In 2024, we transitioned from restructuring to building the organisation," said Derk te Bokkel, CEO of Royal IHC. "Our operational and financial results are improving, the organisation is more agile and our customers' confidence in the future of Royal IHC is returning."
Significant backlog
Royal IHC said the improved financial stability is the result of the new direction, restructuring, and favourable market conditions.
"This combination inspires confidence among our stakeholders, despite global geopolitics and macro-economic uncertainty," said Te Bokkel. "This is reflected in our orderbook, with growing flow business and recent orders such as the hopper for Boskalis, the medium-class hoppers for USACE and Dutra, the hopper for DCI and the engineering for an electric cutter for QMM.
"A further increase is expected in the near future once the contracts for the cable lay vessel for OMS and our future contribution to the four Dutch submarines become effective.”
Strategic focus
The strategy introduced in 2023, with shipbuilding in the Netherlands, shipbuilding abroad, design and equipment and the flow business, has been well received by the market, Royal IHC said. In the Netherlands, the company focuses on complex projects with shorter lead times and orders for the navy.
The partner shipyard in Vietnam is taking on projects with a lower risk profile and more flexibility in planning, with the aim of building larger and more complex ships there in the future.
"After completing the two cutter suction dredgers for Kenmare, we will soon start building one for Vishwa Samudra in Kinderdijk," said Te Bokkel. "In Vietnam, the construction of a 2,300m³ hopper for Baggerbedrijf De Boer - Dutch Dredging is proceeding according to plan. This will be followed by the cable lay vessel for OMS.”
Outlook: scalable growth
Royal IHC said that another important step towards sustainable profitability is the further growth of the flow business, including smaller (standard) dredgers and mining vessels; services, maintenance, spare parts, automation and modification projects; the sale of design and equipment packages; and the development of cost-effective construction propositions for the replacement market.
The company said that, in addition, the recently completed new financing structure is important for supporting future orders.
"Our new financing was not a rescue," Te Bokkel remarked. "Royal IHC currently has sufficient work. The new financing enables establishment of new guarantee facilities, including from Atradius, which are essential for entering into contracts for the construction of larger and more complex vessels.
“We are very grateful for the confidence that our employees and external stakeholders have placed in our business operations and new financing structure."
