(Reuters) – Dutch oil and chemical storage company Vopak VOPA.AS raised its capital expenditure forecast for 2020 on Friday following the September acquisition of three industrial terminals from Dow DOW.N on the U.S. Gulf Coast.
The group, which operates tank terminals around the world, now expects its capital expenditure to be in the range of 500 million to 600 million euros ($591 million-$709 million).
In July, Vopak raised its investment forecast to “up to 500 million euros” from between 300 to 500 million euros.
“In 2020 we are investing much more than our normal pattern,” Gerard Paulides, the company’s chief financial officer, told Reuters.
He added expenditure in 2021 would return to more normal levels of between 300 million and 350 million euros.
Vopak, which generates around 35-40% of its revenues from oil terminals, has benefited from soaring demand for oil storage as buyers struggle to find space for surplus crude during a global economic slump triggered by the COVID-19 pandemic.
The Rotterdam-Based company’s occupancy rate at the end of the quarter was 90%, up from 84% a year ago, with Paulides noting more oil storage since March, particularly in the group’s hubs.
This was partly offset by delays in construction of new projects, with Vopak currently finalising the construction of new capacity in South-Africa. The firm should be able to bring that capacity into operation during the current quarter, Paulides said.
Vopak reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of 200.1 million euros in the third quarter, slightly below expectations according to KBC Securities.
Reporting by Charles Regnier; Editing by Edmund Blair and Elaine Hardcastle