The Dutch shipbuilding group is thriving, with numerous contracts and green technology developments, despite challenges arising from Russia’s invasion of Ukraine
Damen Shipyards has seen rising orders for workboats, tugs and other vessels during the past year as demand for new assets accelerates.
It has accumulated a record orderbook of €8.8Bn (US$9.0Bn) through its shipbuilding and repair businesses, with at least 99 vessels ordered from the workboat building division.
“2021 was a good year for us,” says Damen chief executive Arnout Damen. “We have delivered outstanding shipbuilding performance.” This is despite challenges from Covid-19 pandemic measures, war in the Ukraine and rising energy prices.
Damen, which provides design and construction, conversion and ship repair worldwide, has turned around the negative operating result of €43M in 2020 to an operating profit of €25M in 2021.
Notable achievements include delivering the first full-electric harbour tug Sparky to the Port of Auckland and completing vessels with LNG propulsion systems.
Demand for its new reverse stern drive tug designs is growing, and it has won a steady stream of orders for azimuth stern drive, Shoalbusters, multi cats and stan tugs.
Mr Damen says the group is striving “to become the world’s leading green and connected shipbuilder.” It aims to achieve this through investing in digitalisation, standardisation and building series of tugs and workboats.
In total, Damen Shipyards completed 143 newbuild vessels in 2021, the same number as in 2020. But the volume of repair and conversion orders dropped off slightly to 1,100 in 2021, compared with 1,300 in 2020.
Its portfolio of newbuild orders include tugs, yachts, inland vessels, naval ships, fishing vessels, barges and workboats. Damen’s experience with alternative fuels will be widened when it fits propulsion with green hydrogen on training vessel Ab Initio for Rotterdam-headquartered STC Group.
Damen’s earnings before interest, taxes, depreciation and amortisation (EBITDA) were €81.5M in 2021, compared with a loss of €87.5M in 2020.
Damen has been taking steps to implement an effective corporate social responsibility (CSR) strategy, embedded throughout the company and aligned with its business strategy.
There are several reasons for investing in CSR, including ensuring Damen’s activities and solutions comply with regulations; business divisions serve clients and financial partners better; Damen continues to be an attractive employer; and it protects the company, the oceans and the world for generations to come.
The shipbuilder says transparency is an important component of CSR, which is why it reports social, economic and ecological responsibilities.
Ukraine crisis
Damen’s operations continue to be impacted by Russia’s invasion of Ukraine and the resulting drawn-out war.
“The crisis in Ukraine is having a major impact on our company. Not least on the 214 colleagues we had working at our Cherson and Mykolayiv sites before the invasion, with the tragic loss of one of those colleagues,” says Mr Damen.
“Not only do we sympathise intensely with them, we have also worked as one to ensure hundreds of Ukrainian employees, their families and relatives were evacuated to safer havens at our shipyards in Galati and Gdansk, but also in Amsterdam and Vlissingen, in recent months,” he explains.
“Emergency supplies were taken to those who stayed behind. Many colleagues around the world contributed goods and funds and provided refuge outside Ukraine.”
The conflict in Ukraine is also having a major effect in economic terms. “Within a week after the invasion, we decided to suspend delivery of vessels that had been ordered and stopped signing new contracts with Russian and Belarusian clients,” says Mr Damen
“Later, the Dutch Government’s sanctions against Russia rendered those deliveries and contracts impossible. This year and next, we will be hard at work finding solutions for the vessels already under construction and on the associated legal procedures.”
This has had a negative impact on Damen, but the chief executive is positive about the future for the group.
“Despite the consequences of this worrying conflict, we look to the future with optimism and confidence,” Mr Damen says. “This is a view shared by our financial partners, who have recently confirmed their confidence with credit facilities for the years ahead.”
Damen operates 35 shipyards and 20 other businesses in 20 countries, with the support of a global sales and service network. It provides direct employment to a workforce of more than 12,000.
