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Hal posted a rather good Q3-23, marked by a further 1% rise in its NAV qoq to €13.682m or €151.44 per share, bringing the discount to NAV to around c.27%. Once again this quarter, the acquisition of Boskalis appears to be a winning bet for the secretive Dutchman from an operational point of view. While the YTD performance is good, Hal’s liquidity war chest remains the key question, calling for a redeployment.
Companies: HAL Trust
AlphaValue
Contrasting with a modest H1 22, Hal’s H1 23 results appear on a good footing, with a slight increase in NAV over the half-year and an appealing NAV discount. The privatisation and acquisition of Boskalis appears to have been a winning bet for Hal, which posted a good operating performance. Still, HAL’s deep pockets raise the question of its next capital redeployment.
Hal started the year with a 3% (qoq) increase in NAV compared to December 22 driven by the performance of the listed companies (+€0.2bn). The operating performance on the other hand was hardly stellar with a 3.3% decline in revenues from the unquoted companies excluding the impact of the Boskalis consolidation. While, as usual, no outlook has been given, the secretive Dutch HoldCo may well surprise us judging from its deep pockets (€3bn of net cash).
After ending 2021 with a massive €5.6bn cash pile from the Grand Vision sale, HAL’s 2022 story centred around the privatisation of the dredging and marine infrastructure behemoth, Boskalis. While 2022 was clearly not as good as the exceptional year of 2021 in terms of net income, HAL nevertheless showed the resilience of its business model with a stable NAV at €13.1bn, a feat in the current environment. HAL’s deep pockets prompt us to wonder about the HoldCo’s next move.
It comes as no surprise that Boskalis is now fully owned by Hal Trust. After a good start to the year (Q1), the NAV performance was not up to par, down 4.4% YTD and 2.2% qoq. The performance of the unlisted companies was driven by the consolidation of Boskalis, without which profitability would have been lacklustre. Unsurprisingly, liquidity is down following the Boskalis buyout, but Hal Trust has not emptied all of its coffers and questions remain about the HoldCo’s next move.
Although the Q1 NAV performance was modest (+2.4% vs December 21) driven by the decline in listed company performance (-€100m), the unlisted subsidiaries performed well in Q1 with a 24% increase in revenues. The Boskolis transaction remains ongoing. The HoldCo reiterated its position that the FY 2022 net results will be significantly lower than 2021 due to the exceptional gain on the sale of GrandVision.
Following the long-awaited sale of GrandVision, HAL’s liquidity position surged to a massive €5.6bn at the close of FY21. This war chest will soon be put to use as HAL is keen to take Boskalis private, a major deal bound to dominate the narrative in 2022. Concerning the current volatile geopolitical environment, the HoldCo has revealed some small direct exposure to the Russia-Ukraine war, with the ripple effects on the global economy being the biggest threat to the portfolio’s performance.
HAL Trust, which currently holds 46.2% of Boskalis’ share capital, has announced its intention to launch a tender offer for the remaining shares at a price of €32.5 per share, corresponding to a 28.4% premium over yesterday’s closing price, and amounting to a total disbursement of €2.3bn, paid in cash.
HAL’s NAV performance through 2020 fell victim to the touchy discussions between EssilorLuxottica and GrandVision as the terms of the acquisition arrangement came under threat due to the volatile market conditions brought on by the COVID-19 pandemic. With the blockbuster deal finally on the path for completion, HAL’s 2021 outlook is now driven by another major event, as its Dutch e-commerce bet looks into a potential IPO with major (positive) valuation implications.
As expected, HAL’s NAV was hit by the market turmoil experienced since the end of February. Although the share prices of HAL’s listed assets drove this decrease, the health crisis impact on the holding company’s unlisted subsidiaries was negligible in Q1. While this will certainly not be the case in Q2, the confirmation that the GrandVision deal remains on schedule should reassure investors about HAL’s long-term prospects.
Following a satisfactory 2019 in profitability and NAV-progression terms, the ongoing (and undisturbed) sale of GrandVision will be HAL’s anchor to face the global turmoil prompted by the COVID-19 pandemic. Considering GrandVision’s recent statement, that the current crisis has no impact on the execution of the deal with EssilorLuxottica, this has reassured us on this positive catalyst for the holding company. In these volatile times, cash is king, and HAL will have plenty of it.
The eye-raising announcement of the sale of HAL’s stake in GrandVision to EssilorLuxottica led to the solid NAV progression in Q3. An improved outlook for oil and dredging assets point to a more supportive FY20. Still, the uncertainty on the deployment of the proceeds from the deal with EssilorLuxottica continues to loom over HAL’s post-GrandVision future.
The results remained grossly in line for most of HAL’s underlying holdings, which was reflected in a muted progression of the group’s NAV over H1 19. It is no wonder then that upcoming deal with EssilorLuxottica for the sale of HAL’s 77% stake in GrandVision has stolen the show. Many questions abound regarding HAL’s post-GrandVision future, and investors appear to have placed a great deal of uncertainty on the current share price, resulting in an ample 25% discount to NAV.
Bleak forecasts for Boskalis in 2019; oil prices above $60 support Vopak’s and SBM Offshore’s activities. Optical retail, heading for modest growth, reaffirmed its guidance.
Hard hit by Boskalis’ extraordinary charges, oil prices above $60 should support Vopak’s and SBM Offshore’s activities. Optical retail is doing relatively well but contemplating moderate growth.
Research Tree provides access to ongoing research coverage, media content and regulatory news on HAL Trust. We currently have 0 research reports from 2 professional analysts.
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