Royal IHC has published its delayed Annual Report 2021. The delay is due to the outline agreement with the company’s financial stakeholders, concluded at the end of 2022, which had to be incorporated into the report, according to the company's release.
In 2021, Royal IHC's focus was on successfully completing the large and complex projects that began in 2017 and 2018. The following milestones were achieved:
in August 2021, the self-propelled cutter suction dredger SPARTACUS was transferred to DEME, which was able to deploy it successfully in its initial activities in Egypt and Portugal
in December 2021, AMAZON returned from successful sea trials, marking another milestone in the completion of the ship's conversion project. On 31 August 2022, the vessel was successfully handed over to McDermott
several other new-build contracts were successfully completed on schedule in 2021, including two cutter suction dredgers for the Suez Canal Authority. In December 2021, Royal IHC delivered an Easydredge® 2700 trailing suction hopper dredger to SEMAR (Secretaria de Marina) in Mexico. This ship was built from stock in The Netherlands to meet a short delivery time.
There were also some additional setbacks on the AMAZON and SPARTACUS in 2021, which led to additional losses. In addition, Royal IHC continued to suffer greatly from COVID-19. Due to the uncertainty regarding the course of the pandemic – as well as the general economic outlook – many customers postponed purchasing decisions. As a result, Royal IHC was unable to make up for the significant loss of turnover compared to the pre-COVID-19 period.
The financial results for 2021 show a positive EBITDA of € 15.7 million (2020: € 199.4 million loss), a significant improvement compared to previous years. The net result amounted to a loss of € 63.4 million (2020: € 300.1 million loss), partly due to a one-off impairment of € 20 million on the deferred tax asset. The reorganisation in 2020, the increase in flow business (equipment, services and standard modular dredgers) and the completion of complex and loss-making legacy projects contributed positively to this result. In addition, COVID-19 government support helped to retain the company’s employees at a time of a significant drop in order intake and turnover due to the pandemic.
The disappointing inflow of larger orders, partly due to geopolitical developments and volatility in the raw materials market, also has consequences for Royal IHC's financial position. To improve this, the company started a restructuring process, including the process of selling the independent subsidiary IQIP. This is at an advanced stage and will significantly improve Royal IHC's liquidity and equity upon completion. The proceeds from the sale of IQIP will be used to pay off virtually all existing bank debt while maintaining working capital facilities for new orders.