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Launched in 2012, the strategic objective of ‘Profitable growth’ is to secure USD 100 million in annual EBITDA* by 2017 through new towage contracts and operations. The focus area was initially limited to winning long-term contracts in the terminal towage market, but now focus expands to harbour towage as well.

The LNG industry is experiencing the effects of lower LNG prices caused by the shale gas revolution in the US, which combined with the increased costs of building the LNG infrastructure has led to delays and even cancellations of planned projects. This means that the 2017 target might be difficult to reach even with the most recent success of winning the Wheatstone contract. Including Wheatstone we have now secured USD 23 million in annual EBITDA.

COMBINED EFFECT OF TERMINAL AND HARBOUR TOWAGE

Last year’s initiatives supporting the strategic objective of ‘Improve existing business’ looked at ‘driving intelligent pricing and contracting’ and ‘optimising crew costs’ within the harbour towage segment. This has been a success and led us to believe that it is possible to grow the segment further while still maintaining a business model with acceptable returns. The combined effect of terminal towage contracts and longer-term harbour towage contracts is what will make us achieve our target.

EXPANDING OUR FOCUS TO HARBOUR TOWAGE

With the current ‘Accelerate growth’ initiative we are mapping the opportunities to establish joint ventures and enter ports where we are not present. But we will not blindly accelerate our presence at any cost. An expansion will only take place when entering into agreements with customers willing to secure our long-term presence in the particular port. “Since our major acquisition, Adsteam, we have been focusing on running safe and sound harbour operations. Harbour towage constitutes the largest part of our business, so it is only natural to put further emphasis on this area,” explains Kasper Nilaus, Head of Business Development.

A good example of a mutually beneficial harbour entry is when we entered the Port of Sines, Portugal. In 2012 a major shipping line was actively looking for a more safe and reliable operator, which eventually led to the signing of a long-term contract with SVITZER enabling us to enter the port.

REPLICATING OUR WINNING RECIPE

“We seek to replicate our way of doing business by bringing our widely recognised high level of standards and efficient set-up to new operations,” Kasper emphasises and adds: “When adapting this recipe to the individual customer’s requirements, it will create a win-win situation for the customer and for us.” Since establishing good relationships with all parties in a port is crucial, every SVITZER employee plays a major part in earning each job and ensuring timely deliveries to our customers. Marc Niederer, Managing Director for Europe, concludes: “We shouldn’t underestimate that our track record, size and strong local organisation play a major part in our ability to sign up with customers in the first place. This applies both to current and new ventures.”

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* EBITDA is short for Earnings Before Interest, Tax, Depreciation, and Amortisation. It implies the current operational profitability of a company, i.e. how much profit it makes from its present assets.