Marine Engineering & Contracting.
DEME
DEME (AvH 60.4%) realized a (economic) turnover in the third
quarter of 2018 of 693.9 million euros, compared with 643.9 million
euros over the same period last year. The cumulative consolidated
(economic) turnover for the first nine months of 2018 increased
by 290.1 million euros (+17%) to 2,036.8 million euros
compared with last year.
This turnover increase is attributable to a solid utilization of the
hopper fleet, and in particular to a virtually full utilization of the vessels
of the specialized subsidiaries GeoSea (installation of offshore
wind farms) and Tideway (landfall construction and rock placement).
Furthermore, GeoSea brought its new self-propelled jack-up
vessel Apollo into service at the beginning of the third quarter, and
the groundbreaking multipurpose cable-laying vessel Living Stone
was immediately pressed into service for Tideway on the Hornsea
1 offshore wind project in the United Kingdom. Over the first nine
months of 2018, DEME realized just under 50% of its turnover by
various works for the installation of offshore wind farms, thereby
contributing to the expansion of the renewable energy potential.
In the third quarter of 2018, the installation of the 66 foundations
for the Merkur offshore wind farm in Germany was successfully
completed, as was the installation of the wind turbines on the Rentel
project in Belgium (309 MW), which has already supplied its first
green energy to the national grid.
DEME has already invested a total of 325 million euros in 2018 to carry out its ambitious fleet investment programme. In September,
the group placed an order worth 133 million euros for two self-propelled
split barges (3,500 m³) and two trailing suction hopper dredgers.
The first trailing suction hopper dredger (8,300 m³) has the
same innovative design as its sister vessel Scheldt River and will be
deployed on various dredging activities. The second trailing suction
hopper dredger (2,300 m³) is exceptionally manoeuvrable. Its
draught of just 4.25 metres makes this ship ideally suited for dredging
in shallow waters. The vessels are being built by Royal IHC and
are expected to join the fleet in 2020.
Global Sea Mineral Resources (GSR), DEME’s subsidiary specializing
in deep-sea harvesting, unveiled the nodule collector Patania II,
which combines the design of the first prototype with a suction
head to collect polymetallic nodules from the seabed. Polymetallic
nodules contain large quantities of critical raw materials such as
nickel, copper, cobalt and manganese. These metals are key ingredients
for stainless steel, batteries, wind turbines and photovoltaic
systems. The robot will embark on its first expedition in 2019.
DEME won new contracts in the third quarter for, among others,
the widening and deepening of the access channel to the port
of Szczecin in Poland over a length of approximately 62 km (the
contract is worth 313 million euros for the consortium of Dredging
International and Van Oord). The order backlog at the end of September
2018 stood at 2,780 million euros. The decrease compared
to 30/06/2018 is explained by DEME’s high level of activity. Furthermore,
the order backlog again does not include certain contracts
worth a total of approximately 1.7 billion euros which have been confirmed but which cannot start yet due to the fact that certain
conditions precedent are not yet fulfilled. Similarly, the contract
that was signed in October for the transport and installation by
GeoSea of 94 foundations and wind turbines for the Ørsted Borssele
1 & 2 offshore wind farm in the Netherlands is not yet included
in this order backlog. The financial close of the Blankenburg project
was reached in October, so this project will be included in the order
backlog at year-end 2018.
DEME announced yesterday the creation of the industrial
partnership ‘Moulins de Flandre’, together with Quadran Energies
Marines and Shell. ‘Moulins de Flandre’ takes part in the tender for
the construction of offshore wind turbines off the coast at Durkerque.
The net financial debt remained stable compared with June 30,
2018, amounting to 566.5 million euros at September 30, 2018.
As already mentioned at the occasion of the half-year results, the
EBITDA margin for the full year 2018 is expected to rise above 16%.
As was announced earlier, Luc Vandenbulcke (49 years, civil engineer)
will succeed Alain Bernard as CEO of DEME as of January
1, 2019. Luc Vandenbulcke joined the DEME group 21 years ago,
and is the founder and CEO of the subsidiary GeoSea, one of the
fastest-growing and most successful activities within DEME. As of
next year, Alain Bernard will focus on his role as, among others, director
of DEME and its affiliates, chairman of the board of directors
of DEME Concessions and of Global Sea Mineral Resources.

CFE
CFE (AvH 60.4%) reported a substantial turnover increase in the
Contracting division to 671.7 million euros (+31%, 3Q2017: 512.8
million euros) in the first nine months of 2018. On a like-for-like
basis, excluding the acquisitions of A.A. Van Laere and Coghe, the
increase amounted to 11.0%. The three segments (Construction,
Multitechnics and Rail Infra) contributed to this increase.
The order book of CFE Contracting increased slightly to 1,237.4
million euros (year-end 2017: 1,229.7 million euros). The contracts
for an apartment building in Bettembourg (Luxembourg), a logistics
centre in Lodz (Poland) and the interior design of the Gare Maritime
on the Tour & Taxis site in Brussels were added to this order book
in the third quarter.
BPI’s real estate projects increased slightly to 140 million euros
(2017: 133 million euros). The real estate developer acquired
land in Poland for the Sadowa project with 239 apartments. In
Luxembourg, permits were obtained for the construction of the
Livingstone project.
Negotiations are continuing with the Chadian government and the
Afrexim Bank to refinance the receivables related to the Grand Hotel.

Private Banking
The combined assets under management of Finaxis (Delen Private
Bank and Bank J.Van Breda & Cº) increased further to 49.0 billion
euros at September 30, 2018 (48.6 billion euros at the end of June
2018, 47.8 billion euros at December 31, 2017).
Delen Private Bank
Delen Private Bank (AvH 78.75%) recorded another solid inflow of
assets over the first nine months of the year, despite volatile financial
markets. This allowed the total assets under management on
a consolidated level (Delen Private Bank, JM Finn and Oyens & Van
Eeghen) to increase further to 41,407 million euros at September
30, 2018. Of that amount, 30,263 million euros is under management
at Delen Private Bank, 10,595 million euros at JM Finn (UK),
and 549 million euros at Oyens & Van Eeghen (NL).
Bank J.Van Breda & Co
Thanks to a strong commercial performance in the first nine
months of 2018, Bank J.Van Breda & C° (AvH 78.75%) was able
to increase the assets invested by clients to 14.6 billion euros
(1H18: 14.4 billion euros, FY17: 13.7 billion euros), of which 4.8
billion euros client deposits and 9.8 billion euros off-balance sheet
products.
The total loan portfolio increased to 4.7 billion euros (1H18: 4.7
billion euros, FY17: 4.5 billion euros). The provisions for loan losses
remained limited to 0.04% of the average loan portfolio.
Bank de Kremer was established in June. This division of Bank J.Van
Breda & C° focuses on asset management for private clients. The
app of Bank de Kremer gives clients an insight in their assets and an
understanding of their financial future.

Real Estate & Senior Care
Leasinvest Real Estate
Leasinvest Real Estate (AvH 30.01%) reported a net result of 27.2
million euros (3Q2017: 29.7 million euros) over the first nine
months of 2018.
The fair value of the real estate portfolio at the end of the third
quarter amounted to 925.7 million euros (compared with 921.8
million euros at the end of June 2018 and 903.0 million euros at
year-end 2017). In September, LRE acquired the Montoyer 14 office
building, representing an investment of 11.35 million euros.
This office building will be fully redeveloped starting next year. The
Montoyer 63 office building was provisionally accepted by the European
Parliament at the end of September, which means that the
21-year usufruct agreement becomes effective from that moment.
The rental income decreased slightly to 41.9 million euros compared
with the same period last year (42.1 million euros). The decrease
resulting from the sale of logistics properties and the Swiss
portfolio in 2017 is largely offset by the properties that were purchased
last year in Austria and Luxembourg, in combination with
the completion of the new Treesquare building at the end of June
2018. The average duration of the rental leases was 4.53 years.
The occupancy rate increased slightly to 94.86% (2017: 94.80%),
primarily as a result of the reclassification of the Montoyer 63 building
from projects to leased buildings. The rental yield was 6.58%,
compared with 6.44% at year-end 2017.
At September 30, 2018, the equity (group share) stood at 387.5
million euros (year-end 2017: 382.2 million euros). The debt ratio,
which increased to 58.7% at the end of the third quarter, decreases
thanks to the 84 million euros capital increase which LRE
carried out at the beginning of October. AvH exercised its full rights
as part of this capital increase and invested an additional 25 million
euros in total in LRE.
Extensa
Extensa (AvH 100%) obtained planning permission and an environmental
permit for the conversion of the former freight station
(Gare Maritime) of Tour & Taxis, as well as for the construction of a
new senior care residence and a new phase of 322 apartments. The
realisation of apartments and office buildings on the Cloche d’Or
site in Luxembourg is progressing according to plan.

Anima Care
The portfolio of retirement homes being operated by Anima Care
(AvH 92.5%) remained unchanged in the third quarter of 2018,
and currently comprises 2,067 beds spread over 21 residences.
Anima Care already invested more than 17 million euros during
2018 in the further expansion of its network. In 2019, newly built
residences will open in Anderlecht (Erasmus site), in Vorst, in Zoutleeuw
and in Bilzen. The building project on the Tour & Taxis site in
Brussels is also in progress.
HPA
At the beginning of July 2018, HPA (AvH 71.72%) sold the real
estate of 14 of its senior care residences to the French real estate
group Icade Santé. HPA’s subsidiary Residalya remains the tenant
and operator of these senior care residences. The transaction valued
the assets concerned at 189 million euros and earned AvH a
capital gain (group share) of 21 million euros, which was recognized
in 3Q2018.

Energy & Resources
SIPEF
SIPEF (AvH 30.75%) exclusively produces sustainable and traceable
palm oil that is certified according to the RSPO regulations. SIPEF’s
other products (rubber, bananas and tea) are certified by The Rainforest
Alliance.
SIPEF again recorded a strong growth in palm oil production at
its own plantations in the third quarter of 2018. The production
increase in Indonesia was driven by favourable weather and the
improved yield of the young planted hectares. In Papua New Guinea,
the production decrease due to the heavy rainfall at the beginning
of the year was turned into a volume increase. An 8.4%
growth in volume was recorded at SIPEF’s own plantations over the
first nine months of the year. The neighbouring farmers were also
able to reverse the downward trend; consequently, the total group
production amounted to 261,680 tonnes, compared with 246,045
tonnes at the end of September 2017.
Good harvests and high stocks in the main vegetable oils led to a
quarterly fall in the price of almost 100 USD per tonne on the spot
market for palm oil. The market price closed at 540 USD per tonne
at the end of September.
Indian palm oil demand recovered slowly due to a retaliatory import
duty increase on vegetable oils. August and September showed
ever increasing import figures, but they could not disguise the fact
that Indian demand was nearly one million tonnes below expectation.
The investment programmes for the expansion in South Sumatra
(Indonesia) continued steadily, with 10,278 hectares already
planted in Musi Rawas and the start of limited replanting and expansion
at Dendymarker.
In spite of rising volumes and yield improvements, the expectations
of continuing lower palm oil prices in the fourth quarter will impact
the recurring result for the second half of the year. The annual results
for 2018 will therefore be substantially lower than they were
for the financial year 2017.

AvH & Growth Capital
In October, Sofinim sold its 50% participation in Distriplus, owner
of the Di and Planet Parfum brands, to Groupe Jacques Bogart.
This French group, which is listed on the Paris Stock Exchange, specializes
in the development, production and sale of perfumes and
luxury cosmetics. This marks an opportunity for Distriplus to enter a
new phase in its history. The negative impact of this transaction on
AvH’s consolidated results for the second half of 2018 is estimated
at approximately 8.5 million euros.

General comments on the figures
At the end of September 2018, AvH (including subholdings) had
a net cash position of 109.8 million euros, compared with 170.4
million euros at the end of June 2018. Besides cash and short-term
deposits, this cash position consisted of 77.3 million euros in shortterm
investments and treasury shares, and 30.0 million euros in
short-term debt in the form of commercial paper.
AvH owned 352,000 treasury shares at September 30, 2018 (same
as at June 30, 2018) to hedge its stock option obligations. At September
30, 2018, 8,777 treasury shares were added to this number
as a result of acquisitions and disposals within the framework of the
AvH stock liquidity programme (2017: 5,257).
During the third quarter of 2018, AvH invested 25 million euros by
subscribing in respect of its share to the capital increase of Leasinvest
Real Estate. At the same time, the final tranche (28 million
euros) of the acquisition in 2016 of the 26% minority interest in
Growth Capital subsidiary Sofinim was paid in September 2018.

Outlook 2018
The board of directors confirms its earlier statement on the occasion
of the half-yearly figures for 2018 that the key participations
of the AvH group are well positioned for 2018. The board of directors
expects an increase in the contribution from the core segments
compared with last year.
Taking into account the loss on Distriplus in 2018 and the non-recurring
remeasurement gain of 19.8 million euros (related to SIPEF)
that was recognized in 2017, the board of directors expects the net
result over the full year to be slightly lower than the 302.5 million
euros reported for 2017.

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tijd 09.33
Ackermans & van H. EUR 138,90 +40ct vol. 2.493