Hello, and welcome to Royal Vopak First Half Year 2025 update. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. This call is being recorded. I am pleased to present Fatjona Topciu, Head of Investor Relations. Please go ahead with your meeting.
Good morning, everyone, and welcome to our Half Year 2025 Results Analyst Call. My name is Fatjona Topciu, Head of IR . Our CEO, Dick Richelle, and CFO, Michiel Gilsing, will guide you through our latest results. We will refer to Half Year One 2025 Analyst Presentation, which you can follow on screen and download from our website. After the presentation, we will have the opportunity for Q&A. A replay of the webcast will be made available on our website as well. Before we start, I would like to refer to the disclaimer content of the forward-looking statement, which you are familiar with. I would like to also remind you that we may make forward-looking statements during the presentation, which involve certain risks and uncertainties. Accordingly, this is applicable to the entire call, including the answer provided to questions during the Q&A.
With that, I would like to hand over the call to Dick.
Thank you very much, Fatjona, and a very good morning to all of you joining us in the call. Let's start with the key priorities of our strategy framework towards 2030. We continue to focus on improving the performance of our existing portfolio. This includes both our sustainability efforts and our financial results, with an operating cash return target for the portfolio above 13% throughout the cycle. Second, we have the ambition to invest EUR 2 billion equity contribution in industrial and gas terminals. That translates to around EUR 2.6 billion on a proportional basis. Third, we have the ambition to invest EUR 1 billion equity contribution in infrastructure for the energy transition, which translates to around EUR 1.4 billion on a proportional basis. Our improve, grow, and accelerate strategy underpins a well-diversified and resilient portfolio and provides a solid foundation to continue delivering value to all our stakeholders.
Now let's move into the key highlights for the first half of this year. The first half of this year, the demand for infrastructure services remained healthy across the portfolio, and that resulted in a proportional occupancy rate of 92%, with continued high satisfaction from our customers. We reported strong financial performance, growing our proportional EBITDA to EUR 615 million, leading to an operating cash return of 16.9%. Our joint venture, AVTL, in India successfully completed its IPO with proceeds of around EUR 300 million, which will be used to fund future growth in this attractive market. This IPO led to an exceptional gain of EUR 111 million for Vopak, and we are increasing our full-year outlook. Our business performance is strong, and we project a growth rate of 3%- 5% of our proportional EBITDA excluding the currency impact and the positive one-off item of this quarter.
We're making good progress with the construction of Reef Terminal in Western Canada, and are expanding at the Ripper Terminal in the same location. In India, our joint venture, AVTL, announced the development of the first independent terminal to store ammonia in the country. Additionally, in India, multiple expansions for LPG were commissioned, and we see good progress and ample opportunity to further grow our gas and industrial footprint around the world. We move to the accelerate, and that goes straight into Malaysia. In Malaysia, the PT2 SB Terminal took a positive investment decision to expand capacity for biofuels. Vopak Energy Park Antwerp entered the feed phase for the development of ammonia capacity, and we signed a joint development agreement with IHI Corporation to establish a joint venture for the development and operation of an ammonia terminal in Japan.
Our commitment remains unchanged to actively support our customers with infrastructure for the ongoing energy transition and to invest when opportunities arise at the right returns. Let's look at our financial performance. We see an overall strong performance with slightly higher results compared to the same period last year. Gas markets were stable, and our terminals are supported by long-term contracts. Mainly due to some planned out-of-service capacity and a positive one-off last year, the results of the gas segment in absolute terms went down slightly. In the industrial segment, we also see stable demand, which slightly increased throughput levels. A one-off following a commercial resolution in Asia and the Middle East and growth contribution from Weizhou in China were driving growth in this segment. Chemical markets remain weak, while our terminals continue to support evolving supply chains.
Energy markets, which we serve with our oil terminals, had continued strong demand for infrastructure, especially in the hubs like Rotterdam. All in all, this has led to an increased proportional EBITDA of EUR 615 million and a strong operating cash return in the first half of 2025. Now, looking at our sustainability performance, we have safety always as our top priority. Personal safety performance deteriorated compared to a good first half of last year, while we reported good process safety performance. Looking at the emissions and diversity, we keep making good progress in achieving our long-term goals. Let's move to the growth investments and start with an update on this year's proportional growth CapEx spend.
Year- to- date, we spent around EUR 300 million on growth projects, while we expect this number to be around EUR 700 million for the full year, reflecting our share of investments but not our equity contribution, and it includes key growth projects we announced earlier. Since the start of our improve, grow, and accelerate strategy, we've committed a total of EUR 1.7 billion, of which EUR 314 million this year. We're well on the way to the EUR 4 billion proportional ambition towards 2030 that we aim to allocate in opportunities that meet our investment criteria. Over the years, we delivered a number of projects, adding new capacity to our network. 1.7 million cubic meters of capacity was added since 2022, of which the majority in the industrial and the gas segment.
As you can see on this slide, with a few highlights of the past years, projects were delivered around the world, for example, in China with the Greenfield Weizhou Terminal and the expansion in Chongqing, both industrial terminals in China. Also in the Netherlands, with LNG capacity at the Eems Energy Terminal and capacity for low carbon fuels and feedstocks in Vlaardingen. These commissioned capacities have a strong contribution to our results today. Now let's move to India. Our joint venture, AVTL, successfully completed the IPO, leading to an exceptional gain of EUR 111 million. We've seen a lot of growth in India, and we continue to see attractive opportunities ahead. The recent commissioning of LPG capacity in Pipapavam and Mangalore are examples of this. AVTL also announced the development of the first independent ammonia terminal in India, which is fully funded by AVTL.
The capacity is expected to be commissioned at the end of next year. In Canada, the construction of the Reef Terminal is progressing well. The project remains within budget and is on track for the in-service date planned for the end of 2026. Together with AltaGas, we have now started to evaluate near-term optimization opportunities. Further optimization and expansions will benefit from common infrastructure of the terminal in the initial phase. Also at Ripper, we are expanding with additional infrastructure for the removal of methanol. This expansion requires an investment of EUR 11 million Vopak share. Both developments fit well within our strategy to grow in industrial and gas terminals in a highly strategic location at the Canadian West Coast. Now moving on to the third strategic pillar, accelerating toward infrastructure for the energy transition. Today, we announced an expansion in Malaysia at the industrial PT2 SB Terminal.
In total, 272,000 cubic meters of additional storage capacity will be built and connected to a biorefinery to support the production of low carbon transport fuels. The investment of EUR 72 million Vopak share is underpinned by a long-term contract. An investment which is a strategic fit with the focus to accelerate towards infrastructure for the energy transition, in combination with our strong industrial position in Malaysia. Furthermore, with regards to accelerating towards infrastructure for the energy transition, Vopak Energy Park Antwerp is moving on in the development of an ammonia terminal by entering the feed engineering phase. In Japan, we work on developments with regard to ammonia. We signed a joint development agreement with IHI Corporation to participate in an ammonia project, and we leverage our extensive experience in handling and storing ammonia in six current locations around the world.
We delivered on growth over the recent years with multiple expansions at existing and new locations. Our capability to deliver will ensure project execution in the years to come, with multiple key investments coming online that will support future growth. At the end of 2026, we have planned to have both Reef Terminal and the fourth tank at Gate commissioned, and further down the line, multiple expansions and new terminals will follow, supporting long-term and stable returns. To wrap it up, we presented strong results supported by a healthy demand for our infrastructure services, leading to an operating cash return of 16.9%. We're able to increase our outlook despite a foreseen negative currency translation effect of around EUR 30 million, that translates into a 3%- 5% of business growth. Finally, we're delivering on growth and remain committed to further invest in gas, industrial, and energy transition infrastructure.
With that, I'd like to hand it over to Michiel to give more details on the numbers.
Thank you, Dick, and also from my side, good morning to all of you. Let's start with the strong results. In the first half year, we saw continued strong performance from our resilient portfolio. Demand for our storage infrastructure resulted in a healthy occupancy rate, and we continued to generate strong cash flows. These results highlight the strength of our well-diversified portfolio, particularly in times of increased uncertainty and volatility. Simultaneously, we continue to ramp up our investments in attractive and accretive growth projects while returning value to our shareholders. If we take a closer look at the performance of the portfolio, we can clearly see that the occupancy of our portfolio is both stable and high, reflecting the strong demand for our infrastructure.
This is also reflected in the proportional EBITDA, which increased to EUR 615 million in the first half year of 2025, which is an increase of 3% year- over- year. This year-on-year increase is mainly driven by a positive one-off and positive contributions from growth projects being commissioned. As mentioned, we continue to be focused on cash flow generation of our portfolio. This is reflected in the solid operating cash return of 16.9%, which is a slight increase compared to the first half year of 2024. If we have a look at the proportional operating free cash flow per share, we clearly see that cash generation is strong and that our share buyback programs further accelerate the growth on a per share basis, which this quarter was EUR 3.88, a 7% increase year- on- year.
Back to our global network, this slide provides a more detailed breakdown of the proportional EBITDA generated by our business units in the different regions. We can see that growth projects have positively contributed to the proportional EBITDA year- on- year. In the first half of the year, we saw particularly strong performance from our Asia and Middle East business unit, which is primarily driven by the result of a commercial resolution resulting in a significant positive one-off. Across the remaining business units, the performance was relatively stable, with some weakness in the Netherlands related to out-of-service capacity and the temporary technical challenges at our Eems Energy Terminal in the Netherlands, for which we are pleased that a solution has been identified and is expected to be completed by early next year while the terminal remains fully operational.
Moving on to the cash flow generation, our cash flow generation continues to be strong with EUR 496 million of cash flow from operations in the first half of the year. Year-on- year, this represents a decrease of 4%, mainly related to an increase in working capital. Factoring in net debt increase and subsequently deducting all cash expenditures required to sustain the business, we end up with EUR 491 million of available cash flow. This represents the available cash that we can strategically allocate to pay dividends, invest in growth, or buy back our own shares. This is all in line with our long-term capital allocation policy that aims to deliver value to our shareholders while pursuing growth opportunities.
It is important to recognize that seasonality in cash flows during the year, with our annual dividend payment being paid in the first half of the year and the completion of the EUR 100 million share buyback program. With that, I would like to take a step back and once more explain our capital allocation framework. Our capital allocation framework consists of four distinct pillars, aiming to maintain a robust balance sheet, distribute value to shareholders, and invest in attractive growth opportunities. Starting at our first, the balance sheet, proportional leverage, which reflects the economic share of the joint venture debt, decreased slightly to 2.65x compared to the end of 2024, when it was 2.67x . If we exclude the impact of assets under construction, which do not contribute yet to the EBITDA, proportional leverage is at 2.3x .
Our ambition for the proportional leverage range is between 2.5x and 3x . To facilitate the development of growth opportunities that enhance cash return, Vopak's proportional leverage may temporarily fluctuate between 3x and 3.5x during the construction period, which can last two to three years. As mentioned, we have the long-term ambition to generate reliable and attractive returns for our shareholders. This is why we have paid a dividend of EUR 1.60 in 2024, having a long track record of annual dividend distributions. On top of that, we have successfully completed our EUR 100 million share buyback program, repurchasing around 2.5 million shares. Upon cancellation, these shares will reduce our total shares outstanding by around 2%.
If we look at the distributions per share, we have distributed EUR 2.45 per share in 2025, reflecting a total shareholder yield of roughly 6%, excluding growth investments, which once operational will also positively contribute to value creation. Investing in growth opportunities is an important part of our capital allocation policy and our strategy. As highlighted during our recent Capital Markets Day in March, we have the ambition to invest EUR 4 billion on a proportional basis by 2030 to grow our base and gas and industrial terminals and to accelerate towards energy transition infrastructure. At this point, we have already committed around EUR 1.7 billion to growth investments since 2022. As you can see in the graph, we're ramping up our investments significantly this year with expected proportional growth CapEx of around EUR 700 million.
We continue to see attractive growth opportunities in the markets that we will pursue in order to grow the cash generation of our portfolio. Our joint venture, AVTL in India, is a great example of how our growth investments create significant value. To provide some context, in 2022, an initial investment of EUR 186 million from Vopak was made for a 49% stake in AVTL, followed by an additional proportional growth commitment. The successful IPO of AVTL this year generated total proceeds of EUR 290 million, implying a total market capitalization of EUR 2.7 billion. The value of our stake underscores the substantial value created and the significant returns on Vopak's strategic investments in AVTL. As a result of the IPO, Vopak's share diluted to 42.23%, leading to an exceptional dilution gain of EUR 111 million, which is recorded in our net profit for the second quarter of this year.
With AVTL now able to fund its current and future growth CapEx from IPO proceeds, Vopak gains increased capital allocation flexibility. These freed up resources can be directed towards alternative strategic initiatives, including potential shareholder distributions and growth projects. Due to the recent volatility we have observed in interest rates and currency markets, it's important to highlight our sensitivity to these movements. Looking at the interest rate composition of our debt, roughly 80% of our interest-bearing debt has a fixed interest rate, which means that our financing cost has a low exposure to volatility in interest rates. If we look at the proportional EBITDA split by currency, we can see that 27% of our EBITDA is generated in euro, which means that for the remainder of the EBITDA, we face translation risk in our P&L.
To be a bit more specific, we show on this slide the sensitivity of our proportional EBITDA to changes in the U.S. dollar, the Singapore dollar, and the Chinese renminbi on an annual basis. For example, a 10% change in euro to U.S. dollar has a full-year impact on the annual EBITDA of EUR 32 million. The translation impact that arises from recent currency volatility is something we take into account in our outlook for the remainder of the year. We have updated the currency rates as per the end of June 2025. Compared to the outlook we gave at the beginning of the year, we expect to see around EUR 30 million of negative foreign exchange impact for the full year, driven from the change in currency assumptions as per June 2025. This impact is partially offset by the positive one-off in the first half year of 2025.
Additionally, from a business perspective, we continue to see a healthy demand for our infrastructure and positive contributions from our growth projects. As a result, we expect a growth rate of between 3% and 5% for the full year 2025, adjusting for negative currency effects and a positive one-off impact. That brings me to the full year outlook of 2025. We increase our financial outlook with a proportional EBITDA range of EUR 1,170 million- EUR 1,200 million, subject to market uncertainty and currency exchange movements. We expect proportional operating CapEx of below EUR 300 million and proportional growth CapEx of around EUR 700 million for 2025, and the last one is updated from around EUR 600 million before. For the longer term, our ambition remains unchanged.
We aim to invest EUR 4 billion proportional growth CapEx in industrial gas and energy transition infrastructure by 2030, while generating at least 13% operating cash flow return from the portfolio. Our ambition for the proportional leverage is between 2.5 and 3 times. Bringing it all together in this slide, we delivered on our financial performance with proportional EBITDA increasing year- on- year and a strong operating cash return in the first half year of 16.9%. Our well-diversified portfolio caters for uncertainty and volatility in the market. We are committed to capture new opportunities to grow in industrial and gas terminals and to accelerate towards infrastructure for the energy transition. These factors, combined with a strong capital allocation framework, create significant value to our shareholders. This concludes my remarks in the presentation, and I would like to hand back to Dick for the Q&A.
Thank you very much, Michiel. With that, I'd like to ask the operator to please open the line for question and answers.
Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Once again, that's star one one for questions. We will now take our first question from the line of Thijs Berkelder from ABN AMRO ODDO. Please go ahead, Thijs.
Yeah, good morning. Congrats with the strong Q2 results. A couple of follow-on questions. First one, on your slide six, you explain in the corporate cost line higher insurance claims at our captive. Can you maybe elaborate a bit what you mean with those higher insurance claims? Second question is on the release of the receivable in Malaysia. Is this all, or can we expect more of these releases in the coming quarters coming from Malaysia? Third question from my side is on the Aems Energy Terminal. I have the impression it's even operating at above 100% levels in the second quarter. Can you maybe specify what the one-off costs for the technical challenges were in the second quarter and what to expect for Q3 and Q4?
Sure. I'll start with the higher insurance claims at the captive. Indeed, we had during the first half year, two significant jetty collisions, one in Singapore, one in Belgium, which have led to quite some damage. We have in our insurance policy a policy where the first layer goes into the captive, and then we have basically the external insurance companies supporting us on any claim. Those two jetty collisions had quite a bit of impact on the result of the captive. That's the answer to the first question. On the second one, on the receivable for in Malaysia, which is related to PT2 SB, this should be all. We don't expect any significant one-off for the second half. This has been a long-term process to basically come to a resolution.
We took a relatively conservative approach to the outcome of the resolution, and the one-off is really the impact of that conservative approach versus the actual outcome of the resolution. Nothing to be expected going forward. On EET, we have indeed one-off costs. We expect effectively the same one-off costs more or less for the second half of the year, and it should be better once we have the solution in place. For 2025, we took all the technical challenges into account in our outlook, and for 2026, we may expect that these costs are no longer there once we have the solution in place. Does that answer your questions, Thijs?
Better to have hard numbers, but thanks. Thank you.
Okay. Thanks.
Thank you. We will now take our next question from the line of Jeremy Kincaid from Van Lanschot Kempen. Please go ahead, Jeremy.
Good morning all. I have three questions from me. Firstly, when we look at some of the results of some other companies across the chemical sector or various other sectors, they talk to the fact that there's been some pre-buying in the first half as customers try to avoid the impacts of tariffs. I was just wondering if there was any impact of pre-buying within your volumes. Second question, just on the strength within the oil market, could you talk to us some more about where the strength is coming from and some of the dynamics there? The final question from me is, could you just remind me when the potential FID decision might be on some of your larger projects, like in South Africa or Australia? Thanks.
Jeremy, good morning. Maybe to your first question on pre-buying of chemical customers, we haven't seen a particular notable increase in actually the activity levels of some of our main customers in the key locations. I think what you do see in general in the chemicals market, and that is reflected in demand, especially in some of the hub locations and in the hub and distribution locations, is that some of our chemical customers are definitely suffering from overcapacity in that market. That's what you see in terms of the health of their businesses that in the end also has a bit of impact on us. Chemicals, that's where you also see the slight decline compared to the performance last year, and this is behind it. That's, I think, on the chemical side.
If I look at the oil market dynamics, I would say specifically in the main hub locations, we continue to see healthy demand. Occupancy rates are 95% and above. The main markets are Singapore, Singapore Strait, so that's Singapore, Malaysia. It's the Middle East in Fujairah, and it's Rotterdam. Those are the three main hub locations where we look at. Across the board, I would say still healthy demand for current occupancy, but also down the line in terms of the length of contract and the ability to still fetch attractive pricing for it is still a positive development. I think to the third question, help me again, Jeremy, what your third question was?
Just the potential FID question on, yeah, exactly.
FID on some of the big projects, I would expect Australia to be in the latter end of 2026, beginning of 2027, and South Africa would probably be in that same period more or less.
Got it. Great. Thank you very much.
Yeah.
Thank you. Our next question comes from the line of Kristof Samoy from KBC Securities. Please go ahead, Kristof.
Okay. Good morning. Thank you for taking my question. First of all, congratulations with the good results. A few questions have been answered, and I was a little bit late in tuning into the call, so pardon me if I ask the same question again. First of all, could you give an update on Vera Cruz? Am I correct to assume there was zero EBITDA contribution in the second quarter? What is your budgeted timing for the finalization of the repurposing there? Can you give any update also on Reef in terms of timing of commercial startup operations, costing, potential cost overruns? Thirdly, regarding the trade deal that has been struck between Europe and the U.S., a lot of energy is foreseen to be bought by Europe in the U.S. Do you see any traction in business development there?
Do you see potential for new terminals, or do you think you can handle capacity with your existing terminals and it will simply be an element of throughput that increases? Finally, if you could give an update on Vopak Ventures. Thank you.
Maybe to start, hi, Christophe. Good morning. First, on your question on Vera Cruz, limited contribution, I would say, second quarter from Vera Cruz, the oil tanks, and we expect that to continue for the remainder of this year. A spot deal here or there, but not a firm commitment on those tanks. Yes, we're looking at repurposing a portion of it, which is currently in the process, and I expect FID for that repurposing or putting it back into chemical service to be taken somewhere, I think, in 2026, somewhere mid-2026. That's the expectation there. If I look at Reef, a project is progressing well, both in terms of budget as well as in terms of time. We expect commercial operation to start at the end of 2026.
As we indicated just now in the call as well, there's discussions ongoing with our customer and partner AltaGas for further opportunities to optimize the current project, but also to look already at opportunities and start to engage with the relevant stakeholders for further expansion going forward. The whole case around Reef continues to be a very positive one in terms of current project and outlook for other projects. Maybe towards trade and additional energy purchases. We are, as you know, already constructing and expanding our capacity in Gate with the fourth tank. The potential change, because it still remains to be seen how that additional energy purchases, how that will in the end play out. That potential change is, in our view, going to be a substitution of imported LNG from one location to imported LNG from another location. We don't immediately expect that there's new capacity needed.
What is important to realize is the fact that after the Russian-Ukraine war started and the gas crisis started a few years back, there is already quite some additional infrastructure, independent infrastructure to cater for LNG imports that was already constructed and put into service. As you know, that's where we also got involved in Aems Energy Terminal. We are confident that with the position of Gate and Aems Energy Terminal going forward, we're well positioned to cater for the necessary LNG imports into the country. Maybe the ventures comment, I'll leave to Michiel.
Yeah. On ventures, we basically, what we said last time, it's a strategic review, but we have decided to effectively no further invest in Vopak Ventures. We're gradually shrinking the portfolio. We have sold a few activities. We're down to around EUR 50 million invested. We are looking at what the opportunities are. Obviously, there's a lot of companies who are reducing their ventures portfolio. It's a bit of a challenging market, I would say. We haven't made up our final position on what we're going to do with the whole portfolio, whether we will just sit it out or sell or partially sell the portfolio. That decision is still to be made. Also, in the second half, we will look at the market value of these ventures versus, let's say, what is in our books as part of our regular impairment procedures. That's an update on ventures. Okay.
Thank you very much.
You're welcome.
Thank you. Our next question comes from the line of Dirk Verbiesen from ING Equity Research. Please go ahead, Dirk.
Yes. Good morning to you all. Some follow-up questions. On slide 25, on the, let's say, the midterm investment plan and ambitions, if I add it up, we now arrive at, yeah, EUR 5.6 billion, EUR 5.7 billion combined. That's to be committed on a proportional basis. Is that the right assessment, or?
No, I'm not sure how you come to the 5.7 billion, but at least probably you add all the squares together. It's 1.4 out of our ambition of 2.6. That's the first on gas and in the fuel. The complication is always that we have consolidated and proportional growth CapEx. The consolidated one is EUR 3 billion. The proportional then is EUR 4 billion, which is the 2.6 and the 1.4 in the middle of that overview. We have so far committed 1.4 out of the 2.6. You could say we're just above halfway. On the accelerate part, the new energy infrastructure, we have committed EUR 250 million out of the EUR 1.4 billion. That's where we are around 20%.
Yeah, okay. That's clear. Thank you for that.
Maybe a good highlight on the same slide, you see EUR 700 million. That's the proportional growth CapEx. If you then look at the consolidated CapEx, which is related to that EUR 700 million, that's EUR 440 million. Effectively, what happens if we invest a lot in joint ventures, you see that the impact on the proportional growth CapEx is much more significant than on the consolidated growth CapEx. Effectively, 40% of that EUR 700 million is the benefit of investing in joint ventures. That's why we also disclosed proportional leverage to the market during Capital Markets Day and set the ambition there. Just maybe as an addition. Wasn't the question, but I thought now we have the slides here. I take the opportunity.
Okay. Thank you for that. The other question was left for me is the, let's say, the remark on the operational performance in the guidance slide. There were three components, a minus EUR 30 million from currencies, plus EUR 20 million more or less from this one-off, and then a EUR 30 million from operating performance. Can you maybe explain a bit what drove that number? Is it isolated to some regions or assets or more broadly spread, maybe?
No, I think it's more, hi there, good morning. It's more broadly spread. I think it's very much related to healthy occupancy overall. We're at that 92% occupancy. Some of the outlooks on the key markets that we're active in. The oil markets continue to be positive for us. We have a good view on where chemicals will leave us in the remainder of the year. I think on the gas side and industrial side, we're benefiting from strong long-term taker pay contracts. If you add that all up and add to it that also our cost performance is relatively strong for this year, we come to this outlook. We're therewith outperforming the negative currency translation effect. I think that's the main message here.
Yeah, understood. Thank you.
Yeah, you're welcome.
Thank you. As a reminder, before we take our next question, please press *11 on your telephone keypad if you wish to ask a question. We will now take our next question from the line of Philip Ngotho from Kepler Cheuvreux. Please go ahead, Philip.
Good morning, gentlemen. Thank you for taking the questions. I have two left. One is a follow-up on an earlier question raised on the good performance from the oil terminals. I was wondering if you can indicate to what extent you believe that business actually also benefited from the geopolitical tensions, especially as the hub terminals have been so strong and occupancy rates above 95%. I guess it's also maybe different to ask, but any risk of that reversing? What is a more of a normalized level for those terminals? The other question that I have is on the accelerate program, the two new initiatives that you announced of the feed phase in Antwerp and the joint development agreement in Japan.
Could you maybe share a little bit there also what you think could be the potential timelines there onto FID and maybe any indication of potential size for these projects? I know it's early days.
Hi, Philip. Good morning. Maybe on the oil side and geopolitical situation that we see over there, I think the oil terminals have been performing quite steadily over the past few years with high occupancy rates. We continue to see those high occupancy rates and healthy demand. I would say it's a multitude of factors that play a role over here. It's the availability of capacity in markets that are not always subject to a lot of growth in capacity. It's a volatile environment, which makes it attractive for people to pick up capacity and work with volatility and uncertainty in markets. That's just the name of the game. That doesn't mean, just for the record, that it has anything to do with backwardation or contango, but just pure volatility where people feel that they're on current supply chains, there's value to be created by having these storage positions.
That's what we see. If you look at previous periods, also in between, I would say, crises, after corona, before we went into this one, you've seen relatively healthy occupancy rates as well. I wouldn't link it to when all of a sudden geopolitical tensions would go down that the occupancy will drop. That's one. I think two, in the current context, to expect that all of a sudden the geopolitical tension would kind of completely go away, I think that's also harder to imagine and remains a bit of speculation. For now, I think we're well positioned with the portfolio, with healthy demand, and expect that to continue for as far as we can at least look for this year now.
If I then look at the accelerate side, feed indeed in Antwerp and IHI in Japan, this will take us, I think, especially the feed or the Antwerp ammonia one, I expect any further decision to be taken somewhere by the mid or second half of 2026. I think IHI Japan, that depends a bit on the Japanese government and the way they want to supply, or sorry, they want to support supply chains for ammonia import, both in terms of contract for differences as well as awards for infrastructure that needs to be built. We're very excited to be part of this development. It's still early days. In both cases, you wouldn't be surprised, but we won't disclose at this stage any investments because we're also still in the process of defining what the right scope of both projects is going to be. Early days, but exciting developments.
Okay. Thank you.
Thank you. Our next question comes from Thijs Berkelder from ABN AMRO ODDO. Please go ahead, Thijs.
Morning. Me again. Three additional questions, getting client questions on your share buyback program and any reason why not to add a new program to the, let's say, to the just closed one. I saw the Indian shareholder loan has not been paid back yet. Second question, you said in another answer something on AltaGas looking at optimizing the Reef projects. Do you mean that you're looking at potentially project financing for the project to come in? Is that then expected to happen before the end of this year? Third question is on one of your ventures, Energy Dome. I think just signed a very interesting partnership with Google. Could that have any impact on your valuation or stake in Energy Dome?
Maybe I'll take the middle one, the AltaGas one, and then Michiel will comment on share buyback and Energy Dome ties. On the AltaGas one, what we mean with optimizing is pure infrastructure optimization. It's another way of, within the current scope, trying to see if there's additional investments that could be done through which you can increase the volume that can go through the terminal. Down the line, as I just said, also after the commissioning of this first phase in Reef, benefiting from the fact that we have a lot of land still available, but also a lot of underutilized jetty capacity, already looking and engaging on how a potential second phase could look. That's not related to project financing, purely related to additional investments to cater for further potential exports from Western Canada.
Yeah, Thijs. For the share buyback, yes, we indeed completed it the first half year. We will look at it by the year end again in line with the capital allocation policy that we will look at each year and then consider, okay, what are the projections going forward? If you look at the growth, obviously, there's an increase in growth, but as I explained, this impact is less on the holding level. We will definitely have a look at it, but it's too early now to announce another program. On Energy Dome, we have a position in the company. The investment we have made is around EUR 5 million. It's always interesting to see that they sign a deal with Google to form a global commercial partnership. It remains to be seen how that's going to impact the valuation. For us, that's always good news, I would hope.
It's too early to tell what's going to be the financial impact for us on this.
Okay. Thanks.
Thank you. Our next question comes from Kristof Samoy from KBC Securities. Please go ahead, Kristof.
Yes. One follow-up question for Dick, if I may. We were discussing Vera Cruz, and then I understood for the repurposing that you would take FID in 2026, but presumably, you mean startup commercial operations in 2026 for the repurposing, correct?
Can we restart ? I didn't understand or didn't catch your last sentence. Sorry.
Okay. I understood we discussed Vera Cruz, the repurposing. I understood that you said we will take FID on the repurposing in 2026, but I presume you meant startup commercial operations in 2026 or not?
No, it will take a bit longer before for that repurposed part, Christophe, we can start the operation. If let's take one step back, we have the capacity that used to be under contract for fuel distribution. That contract is no longer in place. A portion of the capacity is subject to bringing it back to chemical storage, and that is basically what the terminal before it got into fuel distribution was always active in. It's not so difficult potentially to change and to do the physical modifications, but it takes some time to get the permit to change the tanks back from oil products to chemical products. That's basically the timeline. Once we have that available, we will do the investment and then put the tanks back into chemical service.
I think it remains a bit to be seen how long it will take to get that permit and to start. That's how I got to the numbers or the indications of time. Somewhere in the first half or towards the end of the first half of 2026, we expect FID. We do the modifications, and then that portion is ready for operation. The other portion that used to be part of fuel distribution and is not going to be translated or modified for chemical products is a portion that we keep available for any spot deals as we see them now as well in the fuel distribution market. It's a bit of a blend. Let's also not forget, within the bigger picture, it's a relatively small amount in terms of contribution for our results.
Okay. Thank you.
You're welcome.
Thank you. I am showing no further questions. With that, we conclude our program for today. Thank you for participating. You may now disconnect your lines.
Thank you. Bye-bye. Have a good day.