By Anna Peverieri and Alban Kacher
(Reuters) -Dutch tank storage company Vopak on Thursday doubled the investment target for growing its gas and industrial footprint, committing another 1 billion euros ($1.1 billion) into it through 2030.
Vopak, which provides storage and handling services to key energy and manufacturing end markets, said its growth strategy was supported by the positive outlook and market demand for infrastructure.
“Vopak has achieved its target to grow its gas and industrial footprint by committing 1 billion euro by 2030, ahead of schedule,” the group said in a statement ahead of its Capital Markets Day event.
“The majority of these investments were in gas infrastructure to address energy security and affordability needs, a substantial portion has also been committed to growth markets like India and China,” it added.
The Rotterdam-based company is seeking to expand its gas and industrial terminals while shedding less profitable assets in the oversupplied chemicals market.
The “considerable update” on planned growth investments is positive, as they bring attractive and visible returns, KBC analyst Kristof Samoy said in a note to investors.
Vopak also raised its operating cash return target to more than 13%, compared with its previous guidance of above 12%.
With current operating cash returns back to above 15%, the guidance should be interpreted as a “floor commitment” to keep them above 13% even in adverse market situations, Oddo BHF analyst Thijs Berkelder said.
The group last month gave what analysts called a “cautious” guidance alongside its fourth-quarter results, prompting its shares to fall more than 7% in a single day.
The stock was broadly flat at 0817 GMT on Thursday, trading 0.4% lower.
($1 = 0.9192 euros)
(Reporting by Anna Peverieri and Alban Kacher in Gdansk; editing by Milla Nissi)
