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Havenbedrijf Antwerpen

Annual Report 2016

2 3Havenbedrijf Antwerpen — Annual Report 2016 Havenbedrijf Antwerpen — Annual Report 20162

Introduction and contents

The 2016 Annual Report gives a picture of how Antwerp Port Authority fulfilled its mission in 2017, on the basis of various significant developments, results and events. We have fulfilled this mission in collaboration with the Antwerp port community, on behalf of the port, the city and the region. All the initiatives and tasks which we as the Port Authority took upon ourselves and all the strategic choices that we made are in line with the 2014 – 2018 Business Plan and have one objective, namely to strengthen the position of our port and to create added value.

The report concludes with a number of tables that situate the port of Antwerp in the Hamburg-Le Havre range and elsewhere in the world, followed by a brief financial summary.

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12016, an excellent year for the port 4

in an uncertain world

22016 highlights 8

Saying goodbye 9

Saying hello 10

Corporate Governance Charter 11

An international meeting place with class 11

The new lock 13

Feel the Chemistry 14

A sustainable port 15

Sustainability Award – 1 16

More sustainable transport 17

An accessible port 18

Delwaide dock grows and flourishes 20

What will the future bring? 20

3A world port and its 22

macro-economic context

Good start for the Port of Antwerp in 2017 24

4Freight figures 2016 26

5Comments on the consolidated 30

annual accounts

Havenbedrijf Antwerpen — Annual Report 2016 5

2016, an excellent year for the port in an uncertain world

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The social and political pressure has been steadily mounting for the past few years. Last year the election of Donald Trump, Brexit and the rejection of Matteo Renzi's proposals for institutional reform in Italy all raised concerns. The growing uncertainty and instability that characterised 2016 were not a purely western phenomenon: in various other countries too, variations of these political and social concerns could be observed.

International ports by definition operate in an international context, and so the picture for 2016 was correspondingly mixed. Overall economic growth remained stable but limited. Against this mediocre background Antwerp achieved excellent performance; in fact it was one of the few ports in the Hamburg-Le Havre range to produce growth figures.

Indeed, the port of Antwerp actually closed the year 2016 with a dou-ble record. Not only did it manage to handle a freight volume of more than 214 million tonnes for the first time, with growth of 2.7%, but it also passed the 10 million TEU-mark for the first time ever.

As in previous years, the main sources of growth in the port were container freight and liquid bulk.

In the container sector the port achieved growth of 4.1%, with 117,909,607 tonnes of containers being handled. In terms of TEU the volume rose by 4%. As for liquid bulk the volume grew by 3.8%. The amount of oil derivatives shot up by 7.1%, while chemicals showed modest growth of 1.1%.

Negative performance was experienced in 2016 by conventional breakbulk (down 2%) and dry bulk (down 9.1%).


214,166,958 TONNESAN INCREASE OF 2.7% OF FREIGHT HANDLED

69,242,417 TONNESAN INCREASE OF 3.8% LIQUID BULK

10,037,341 TEUAN INCREASE OF 4%

CONTAINER FREIGHT

117,909,607 TONNESAN INCREASE OF 4.1% CONTAINER FREIGHT

Havenbedrijf Antwerpen — Annual Report 2016 6

The landscape (or rather, seascape) of the container shipping companies has seen momentous changes in recent years, and 2016 was no different. Cost savings and efficiency exercises were the order of the day, leading to many shifts in sailing schedules. In this choppy water Antwerp managed not only to maintain but also to strengthen its position. In the past year it has significantly improved its position in the Far East trade, at the expense of its direct competitors in the Hamburg-Le Havre range. Along with the excellent growth figures Antwerp correspondingly boosted its position in the range.

So, all in all an excellent year.

9,803,843 TONNESCONVENTIONAL GENERAL CARGO

69,242,417 TONNESDRY BULK

2016, excellent growth rates and a strong position

in the Range

https://www.youtube.com/embed/86UvJ_gjYQ4

9Havenbedrijf Antwerpen — Annual Report 2016

Saying goodbyeAntwerp Port Authority and the port community said goodbye to Eddy Bruyninckx when he retired at the end of 2016 after 25 years as CEO of the Port Authority. During the course of his long career Eddy Bruyninckx gave shape to a modern port authority and was the main force behind the development of Antwerp as a major port of world importance that has earned its place in the international supply chain.

In the Liber Amicorum that was presented to him on the occasion of his departure, Eddy baron Bruyninckx was praised for his enthusiasm and passion for the port, his pragmatism combined with large amounts of common sense, his knowledge of detail and his great determination. Or as someone summed it up, "a visionary and strategic thinker."

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2016 highlights

Eddy Bruyninckx


Port Authority chairman and port alderman Marc Van Peel at the official opening of the new Port House


Saying helloAt the beginning of 2016 the executive search agency Spencer Stuart was tasked with finding a new CEO. The search came to an end on 22 June with the appointment by the board of directors of Jacques Vandermeiren as the new Chief Executive Officer of Antwerp Port Authority. He began work on 1 November as CEO designate, shadowing Eddy Bruyninckx for a transition period lasting until 31 December 2016.

Jacques Vandermeiren worked until January 2015 as CEO of the network operator Elia, a company listed on the Belgian stock exchange. His extensive experience in the energy sector was seen as an advantage in dealing with the port as an industrial hub. He also has the necessary experience in complex stakeholder management, dealing with a public shareholder and operating in an international environment..

Corporate Governance CharterOn 1 January 2016 Antwerp Port Authority changed its legal form of com-pany to "NV van publiek recht" (a type of public limited company under Belgian law). At its first meeting the newly-formed board of directors ap-proved the Corporate Governance Charter which lays down the prin-ciples on which the board of directors, the directors themselves and the committees have to operate. The Port Authority has also committed itself to maintaining the highest standards of corporate governance. The new board of directors has 13 members, six of whom are independent directors.

An international meeting place with classDeparting CEO Eddy Bruyninckx took his departure and his successor Jacques Vandermeiren was welcomed in the spectacular Port House, the Port Authority's new headquarters. It was officially opened on 22 Septem-ber, four years after construction work began, and now forms a symbolic but highly visible link between port and city, at the point where the one meets the other.

Jacques Vandermeiren


As Port Authority chairman and port alderman Marc Van Peel put it: "A city like Antwerp with a major international port needs to have striking landmarks. The design by Zaha Hadid is more than just innovative, it puts our port even more firmly on the world map. Above all it is the architec-tural expression of the success that our port has enjoyed over the centu-ries. I hope and believe that it will also be the symbol of a new Golden Age for our city and for our port."

The opening of the Port House was marked by a weekend of public celebra-tions. It is now the workplace for 500 employees and houses all the adminis-trative departments that used to be scattered over various locations. This not only makes for greater efficiency but also provides more congenial working conditions and promotes internal communication.

The original design requirements for the new headquarters placed great em-phasis on the need for sustainability while preserving the historic building that stands on the site, a listed monument. And indeed high standards of sus-tainability were achieved despite the historic nature of the original building. The new headquarters is heated in winter and cooled in summer by a geo-thermal energy storage system with heat pumps, covering 72% of the energy requirements. In the historic building this is done using chilled beams, while the new extension is fitted with chilled ceilings. Energy consumption is further reduced by building automation and control of the amount of daylight enter-ing the building. As a result the new Port House has a BREEAM rating (Building Research Establishment Environmental Assessment) of "Very Good."But the new building also needed to have an open design in order to welcome local citizens and members of the national and international port community. In this respect it is more than successful. Since the official opening more than 10,000 visitors have been given guided tours. Tourists and other visitors wander in and out of the atrium, and a day without an international meeting of some kind is now a rarity. As a location for public lectures, company presentations and happenings, the building has an undeniable attraction. The Port House as a meeting place for the port of Antwerp has become an attractive reality.

The new lockThe nautical accessibility of the port was further assured with the open-ing of a new sea lock on the Left bank of the Scheldt, now called the Kieldrecht lock as a result of a public competition to find a name for it. The new lock, the largest in the world, was officially opened by HM King Philip of Belgium. Until then the only access to the Waasland port (the Left bank area) was the Kallo lock, leading to congestion at peak periods. With the opening of the Kieldrecht lock the Left bank area has a second, larger access to the network of docks, one which moreover is located further upstream. This will help to assure a smoother flow of ship-ping traffic and increase the efficiency and reliability of the entire "nauti-cal chain" from open sea to berth in dock.

The Kieldrecht lock cost 382 million euros to build, 75% of which was paid by the Flemish government and the other 25% by the Port Authority. As a mainport Antwerp is also an important node on the Trans-European Transport Network (TEN-T) with which the EU seeks to assure sustainable transport, create employment and promote economic growth and cohe-sion. As such this project is supported by the European Commission and the European Investment Bank.

In his opening address, Port Authority chairman and port alderman Marc Van Peel underlined the necessity of first-class infrastructure in order to handle today's increasingly large ships and so to safeguard Antwerp's international position. He also pointed to the need for space to expand. Construction of a new tidal dock on the Left bank is therefore a priority for the Port Authority and for the port community (see below).

The Kieldrecht lock, officially opened by HM King Philippe of Belgium in the presence of various other dignitaries

Interior Havenhuis

https://www.youtube.com/embed/jJZhMqFLw90

Feel the chemistry


A sustainable portThe port of Antwerp has for many years been working towards sustainable development of the port, with the chemical and petrochemical industry in the port pioneering the way in sustainable production and projects aimed at greater efficiency.

Antwerp Port Authority for its part aims to reinforce the petrochemical cluster in the port by promoting security of energy supply and stimulating the production of advanced biofuels. The latter in particular will make an important contribution towards more environment-friendly transport.

Methanol has the potential to achieve both objectives combined. Furthermore, new methanol production capacity will meet the local demand for methanol as a feedstock for the chemical industry. With this aim in view the Port Authority carried out a feasibility study for a power-to-methanol plant and subsequently issued a Request for Projects, limited to companies within the port, in order to find an industrial port user that would be willing to house such a plant. The methanol would be produced from captured CO2 and hydrogen.

Feel the ChemistryThe port of Antwerp with its strategic location is home to the largest mari-time integrated chemical cluster in Europe. Indeed the oil and chemical cluster is a major factor in the port's success, as demonstrated by the vol-umes of freight that it generates. But there is always room for improvement, and so the Port Authority's "Energy & Chemicals" team carried out a survey of 40 chemical production and tank storage companies in the cluster in order to find new ways to further bolster the cluster and make it even more competitive.

Reasons cited by the companies concerned for their choice of Antwerp included among others the availability of raw materials, the extremely efficient logistics platform, the high productivity and multilingual capa-bility of the workforce, the trimodal connections with the hinterland, and the competitive subsidiary factors. But it is in these subsidiary fac-tors that there is most room for improvement. Energy prices in particular need to be more competitive, despite the efforts that have already been made in this area, and there are still opportunities for further integration and collaboration within the cluster. All these points for attention have been taken to heart by the Port Authority, essenscia (the association of the chemical industry in Flanders) and Flanders Investment & Trade, who have drawn up a joint priority programme.

In the field of communication this led to a new campaign under the slogan "Feel the Chemistry" promoting the port of Antwerp as an investment location.

Best Belgian Sustainibility report

Best BelgianSustainability ReportWINNAAR 2016

duurzamehavenvanantwerpen.be

https://www.youtube.com/embed/u2KRJMJhkMM

Bunkering of an LNG barge


Sustainability Award – 1The Sustainability Report is an initiative of Antwerp Port Authority, the Left Bank Development Corporation and VOKA-Alfaport (the association of private companies in the port of Antwerp). Published every two years, this year it will appear for the fourth time. Last year these stakeholders took a further initiative to give extra emphasis to their ambition with the launch of a Sustainability Award on a similar two-yearly basis.

No fewer than 20 companies responded to the invitation to submit entries. From the shortlist (BASF, ECLUSE, Gyproc and Qpinch) the seven-member jury finally has chosen ECLUSE as the winner of the first Sustainability Award presented by the Antwerp port community. This was marked by the opening of the "Walk of Sustainability" in the form of a suitably sustainable promenade at the foot of the new Port House. Each winner will be honoured with a commemorative plaque set in the walk.

The ECLUSE project aims to develop a heat distribution network that will eventually replace the individual energy supplies of various chemical companies in the Left bank area. The energy for the heat distribution network will be produced by the waste-to-energy facilities of the waste processing company Indaver and its joint venture Sleco. The steam network will be laid by Infrax. Six incinerator plants will produce steam with a maximum power of around 250 MW, representing CO2 savings of 100,000 tonnes annually. This is equivalent to the CO2 savings per year of 50 wind turbines with a capacity of 2.3 MW each. Furthermore the network can be expanded in the future until it affords a CO2 reduction equivalent to 100 wind turbines. Once it is operating at full capacity the network will supply 10% of all the "green heat" produced in Flanders.

More sustainable transportIf we are to maintain our leadership position in creating a sustainable port then we will have to keep investing in making transport in all its forms more environment-friendly and sustainable. Last year another important step was made both towards the energy transition and towards making energy consumption in the transport sector more sustainable.

The port of Antwerp and ENGIE made a concession agreement for the construction of an Alternative Energy Hub (on quays 526 and 528). The Port Authority too has demonstrated its commitment to this project with the appointment of a concession-holder. ENGIE is to build the first shore-to-ship LNG bunkering station in Europe destined to serve barges, small coastal vessels, dredgers and tugs. There will also be an LNG and CNG fill-ing station for wheeled transport and a fast charging system for electric vehicles. The project was launched on 1 October 2016 and the first phase of the hub will be operational from the summer of 2017 onwards.

All the efforts are now being rewarded, as demonstrated by the growing number of environment-friendly ships calling at the port. The Port Authority has for several years now been a pioneer in the field of LNG, among others as partner in the LNG Master Plan for the Rhine-Main-Danube aimed at making barge transport cleaner and greener.

Presentation of Sustainability Award


An accessible portImproved, sustainable access to the port, smooth flow of traffic, good roads and greater mobility are all essential for the port of Antwerp. The Port Authority has adopted a three-pronged approach to making the port more accessible, covering infrastructure, sustainability and efficient freight transport.

To achieve this a number of large-scale, long-term road construction pro-jects are planned for the coming years that will have a significant impact on commuter and truck traffic. The Port Authority and VOKA-Alfaport have joined forces to work on two platforms. A digital platform entitled "Towards an accessible port" has been developed and went online at the beginning of this year. Here commuters can find all up-to-date infor-mation on roadworks in and around the port, and can also learn about various alternatives to ensure easy movement to and from companies in the port. The City of Antwerp for its part has made a summary of road-works in the city available with its "Smart ways to Antwerp" initiative.

In order to keep port users properly informed, dialogue sessions have been organised for private companies. In addition to providing informa-tion these sessions are used to search jointly for solutions that entail less hindrance to traffic.

This has indeed led to new initiatives, as demonstrated by the decisions by two terminal operators in the Deurganck dock — namely MPET and Antwerp Gateway — to stay open around the clock during weekdays for delivery and collection of containers by truck. Elsewhere in the port all terminals now open one hour earlier in the morning. To further promote this initiative the tolls on the Liefkenshoek tunnel have been lowered dur-ing the night hours.

As regards rail transport, in addition to the existing modal shift projects and the service desks (Antwerp Model Solutions) the pilot project NV Rail-port Antwerpen has been set up. This is a joint effort by Antwerp Port Authority, the Left Bank Development Corporation, essenscia (the associa-tion of chemical, plastics and life sciences companies) and Alfaport. The rail operator offers its services to all rail transport companies and local companies in order to organise distributed rail transport in the port of Antwerp. After an extensive selection round, Railport B-Logistics was ap-pointed as partner to carry out this pilot project.

Efficient organisation of freight transport is a constant concern of the Port Authority in consultation with the stakeholders. Measures to opti-mise road transport so that the same load is carried by fewer trucks is one aspect, while promoting a modal shift from road to rail and barge is a second aspect of efficient freight transport.

A number of alternatives are being promoted for commuter traffic. Companies are making extra efforts to promote the use of public transport, carpooling and cycling, while employees are being urged not to make unnecessary trips and are being encouraged to make use of remote working and flexitime. Within the Port Author-ity all these practices are already well established. Meanwhile the existing shuttle bus service for employees of port companies on the Left bank has been extended to cover the entire port area.

In 2016 particular attention was paid to water travel. The Tall Ships Races provided an excellent trial run for the water bus project. Dur-ing the days of this event which attracted large number of visitors, a water bus took people to Antwerp city centre every half hour. The tremendous success of this service demonstrated the viability of such a formula, and for the Port Authority this justifies giving the pi-lot project a more permanent character in 2017. In a further develop-ment a temporary ferry service replaced the Lillo bridge for a period of two months while it was being renovated. It was used intensive-ly by pedestrians and cyclists, despite the less pleasant weather in October. The ferry service will operate again in the summer of 2017.

Need for additional container handling capacity Churchill industrial zone


The main project for the future, however, is to create the necessary additional container capacity. To achieve this, in 2016 the Flemish government initiated a “Complex Project” in which the conflict model is replaced by a consensus model. Within this Complex Project the possibility of building a new Saeftinghe dock is being investigated along with all other activities, without any one of these necessarily excluding the others. All partners are being consulted in a participatory process that began in the middle of last year. As well as economic interests, questions of liveability, the environment, agriculture, mobility, safety and heritage are all being considered. This innovative approach is being implemented in four phases, namely investigation, examination, development and implementation. Over the course of several months the various options were gathered together in an "Alternatives examination note" for which the public consultations began on 9 December and continued until 18 January 2017.

The need for additional container capacity has been recognised by the Flemish government, and the Port Authority also considers it necessary for the Antwerp port area to have additional container capacity by 2022. As of 19 April 2017 there are eight alternatives on the table, three of which include a Saeftinghe dock.

"This location is our preferred alternative because it fits the market requirements best. The terminal operators and shipping companies also agree that it is the most suitable solution in the longer term," says Port Authority CEO Jacques Vandermeiren.

Delwaide dock grows and flourishesWhen the MSC shipping company moved its hub at the end of last year from the Delwaide dock to the Deurganck dock it left space for this top location on the Right bank to be put to a new use. An extensive, interna-tional Request for Proposals was launched at the beginning of the year. It was decided to make maximum use of the site and thanks to the enor-mous interest shown it was possible to select projects that offered the most added value for the entire port.

The Sea-Invest group has plans for a new tank terminal representing an investment of 250 million euros. The same group also plans to organise the operation of an independent container terminal after having acquired the Independent Maritime Terminal. This terminal in the Hansa dock will be relocated to the Delwaide dock where it will be able to expand further with an additional investment of 50 million euros. The site thus freed up in the Hansa dock will be given a complete makeover. In a first phase Sea-Invest will among other things build additional tank capacity of 160,000 m³ for Total, representing an investment of 100 million euros. This will form a handy extension of the neighbouring Sea-Tank terminal. Mexico Natie and Handico International for their part have taken over the DP World concession on the North side of the Delwaide dock. DP World itself is concentrating all its activities on the Left bank. Other parts of the Delwaide dock will be occupied by activities that do not require direct access to the waterfront.

And what will the future bring?The main concerns for the near future are providing room for further growth of the port and ensuring the necessary additional container han-dling capacity. In addition to the Delwaide dock the port still has the for-mer Opel site available on the Right bank, now renamed the Churchill Industrial Zone.

A new Request for Proposals was issued in April 2016 asking specifically for projects in the "circular economy." The Port Authority is strongly convinced of the intrinsic strategic value that such a project will bring to the port, as major international ports such as Antwerp are particularly well placed to attract the necessary flows of materials and accompanying recycling activities. A candidate was selected and took an option on the site, but unfortunately was unable to meet the conditions within the required timescale. A new RfP was therefore issued, this time with the focus on innovation, added value and employment.



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A world port and its macro-economic context

In the past few years there have been signs in various quarters of deglobalisation, political shifts, concerns about the destruction of social structures and the fragility of communities, a declining faith in institutions, lack of leadership, the persistence of gender inequality and various other concerns, all leading to general discontent that has been turned into a winning electoral formula. The world in 2016 was characterised by a great deal of uncertainty and ambiguity, hardly the best basis for economic growth and development.

The particularly weak growth of world trade by only 1.3% in 2016 was the result of a number of events during the course of the year. Indeed 2016 was the weakest year for world trade since the financial crisis of 2008. These weak results in turn revealed a deeper structural change in the relationship between trade and economic performance. Lower levels of factors such as investment had a negative impact both in the US and in China. The slowdown in the so-called growth economies also contributed in large measure to the weak world trade results.

Against this background the record performance of the port of Antwerp is highly significant and positive. But what are the expectations for 2017 – 2018?

The World Trade Organisation (WTO) is now more optimistic in its forecasts, albeit with considerable reservations. All trade regions are expected to experience economic growth for the first time in years, which should give a boost to world trade.

The first quarter of 2017 confirms these prognoses: important trade indicators are up, pointing to a recovery in trade. For instance, the container volume recovered in the first months of the year after reaching a low point in the previous year. The same applies to export orders.

However, this recent economic trend could easily be undermined by political events. The unpredictability of the world economy in the short term, the political uncertainty surrounding trade agreements and the monetary and fiscal policies of a number of countries all pose threats to the predicted growth. For example, an unexpected burst of inflation could force central banks to reign in their monetary policy faster than they might wish. In the short term this would unquestionably undermine economic growth and trade. Other factors such as the uncertainty surrounding the outcome of the Brexit negotiations and restrictions in trade policy could impact demand and investment and so disrupt economic growth in the medium and long term.

For all these reasons the WTO has placed its forecasts for world trade in a fairly wide bracket. For 2017 it has adopted a cautious margin from 1.8 to 3.6%, and for 2018 a margin from 2.1 to 4%. For the current year the WTO is inclined towards the bottom edge of the bracket, for all the reasons previously mentioned.


Good start for the Port of Antwerp in 2017The port of Antwerp handled a freight volume of 54,324,303 tonnes in the first three months of 2017, 1.5% more than the same period last year. The further growth is mainly thanks to container freight, up by 2.0% in tonnage. This is the best quarter ever, both for total shipping freight and for containers. Not only that, but also the month of March was the best month for containers ever recorded in the port o of Antwerp.

Havenbedrijf Antwerpen — Jaarverslag 2016

4

Freight figures 2016


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MARKET SHARE RANGE CONTAINERS TONNES— Antwerp — Rotterdam — Hamburg — Bremen — Zeebrugge — Le Havre

MARKET SHARE RANGE CONTAINERS TEU— Antwerp — Rotterdam — Hamburg — Bremen — Zeebrugge — Le Havre

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Havenbedrijf Antwerpen — Jaarverslag 2016 Havenbedrijf Antwerpen — Jaarverslag 201628

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TOP 20 CONTAINER PORTS(in TEU)

0 5.000.000 10.000.000 15.000.000 20.000.000 25.000.000 30.000.000 35.000.000 40.000.000

Ranking

Laem Chabang

Tanjung Pelepas

Hamburg

Dalian

Xiamen

Antwerp

Kaohsiung

Rotterdam

Port Kelang

Tianjin

Dubai

LA/LB

Qingdao

Guangzhou

Busan

Hong Kong

Ningbo-Zhoushan

Shenzhen

Singapore

Shanghai

SHIPPING FREIGHT Imports Exports — Total

(in million tonnes)

SHIPPING CONTAINER FREIGHT Imports Exports — Total

(in million TEU)


5

Comments on the consolidated annual accountsThe annual accounts cover the calendar year 2016 until 31 December 2016. On 1 January the Port Authority changed its legal form of company from an "autonoom gemeentelijk havenbedrijf" to become an "NV van publiek recht" (a form of public limited company under Belgian law) with the name "Havenbedrijf Antwerpen," while continuing to trade under the names "Antwerp Port Authority". The new name is mentioned at the appropriate points in the Annual Report.


1. Development of the results Antwerp Port Authority made a consolidated profit of 122.7 million euros

in 2016, compared with 109.3 million in 2015. The consolidated Balance Sheet and Income Statement were largely determined by those of the entity "Havenbedrijf Antwerpen NV van publiek recht" (i.e. the non-consolidated accounts of the Port Authority). The main elements of this result are as fol-lows:

The total gross tonnage of seagoing ships calling at the port and the freight volumes handled both increased in 2016, which had a positive influence on the turnover figures. On the other hand crane activities were completely divested in 2016. Overall, the turnover rose by 9.5 million euros or 3.3%

The operating costs rose from 263.5 to 273.1 million euros. Various catego-ries of expenditure rose; in particular the expenditure for maintenance of infrastructure and maintenance dredging was up by 7.8 million euros. The personnel costs rose by 5.2 million euros. On the other hand there was a positive effect due to the write-back/application of provisions amounting to 13.4 million euros, compared with 5.9 million euros in 2015.

The depreciation costs have risen mainly because of the Kieldrecht lock becoming operational in the fourth quarter of the year, with depreciation on this project being booked for the first time.

The financial income was down, since there were less capital gains on the sale of short-term investments than in 2015.

The non-recurring operating income amounted to 26.9 million euros in 2016 (10.6 million in 2015), and mainly comprise the capital gain on the sale of the former Port House (the Port Authority's old headquarters).

The turnovers and results of the fully integrated subsidiaries – namely Deurganckdoksluis NV, Port of Antwerp International NV, Port of Antwerp International (UK) Ltd., Railport Antwerpen NV and Amaris vzw – are either intra-group or very limited in size.


1.1 Operating incomeThe breakdown of turnover (300.3 million euros in 2016, compared with 290.7 million in 2015) as a component of the operating income is as follows:

TURNOVER: BREAKDOWN

The development of the various categories over the last three financial years is as follows:

TURNOVER 2016 2015 2014

Concession fees and berthing duesThe income from concessions remained stable. The rates were increased by 1.28% in 2016. There were no significant changes in the area of concessions, but as a result of certain large investment projects in operational terminals, charges for certain parts of the sites were waived because these areas were temporarily unusable for the concession-holders. Since a number of concession-holders failed to achieve the freight volumes laid down in their concession agreements, the Port Authority included an estimated amount of 4.6 million euros in turnover in 2014 for that same year, an estimated amount of 4.6 million euros in 2015 for 2015, and an estimated amount of 2.0 million euros in 2016 for 2016. The procedure for arriving at definitive sums for the compensation has been completed for 2014 and 2015, and is still ongoing for 2016. More than 85% of the estimated tonnage obligation arises from the provisions of the concession agreements for the Deurganck dock. It should be pointed out that the procedure for arriving at the final compensation amounts for 2016 is still in progress. Once the board of directors has all the information available to it and has finally set the amounts for 2016, a difference may appear between the current estimated amounts and the amounts included in the annual accounts. As regards the amounts for 2014 and 2015, the final charges for these years as set by the board of directors do not differ significantly from the estimated amounts.

Shipping dues and barge duesThe freight volume rose from 209.1 to 214.2 million tonnes, an increase of 2.4%. During the past 12 months a total of 14,473 seagoing ships called at the port of Antwerp, which is 0.4% more than in 2015. The gross tonnage — an important parameter for invoicing of shipping dues — for its part rose by 9.1% to 401 million GT. The substantial reduction in berthing dues introduced in 2010 for breakbulk cargo has been maintained ever since. As for barge dues, after a slight drop of 1% in 2015 the amount rose by 7% in 2015.

Tugging feesThe tugging department experienced a drop in its operating parameters, with a decrease of 1% in the number of tugging jobs and a decline of 3.7% in the gross tonnage tugged. These decreases were due to container activities shifting from the Delwaide dock to the Deurganck dock, without other activities to compensate as yet. The development of these parameters together with a change in the amount of fuel supplements charged through resulted in a stabilisation of the turnover.

Dock-mounted and floating cranesThe turnover from dock-mounted and floating cranes fell by a further 3.8 million euros in 2016 compared with 2015. The activities with the dock-mounted cranes were stopped entirely in 2016 while the activity with the remaining floating crane was limited.

Concessions & berthing dues 41%

Miscellaneous 1%

Tugging fees 15%

Barge dues 3%

Shipping dues 40%

(in euro x 1000)

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MiscellaneousTugging feesBarge duesShipping duesConcessions & berthing dues

201620152014


Other operating incomeThe other operating income remained stable in 2016, at 53.9 million euros. This operating income was largely made up of operating subsidies from the Flemish government (24.5 million euros in 2016 and 24.4 million in 2015). These operating subsidies are a contribution towards the costs incurred by the Port Authority in carrying out tasks which under the terms of the Ports Decree are the responsibility of the Flemish government. Subsidies for dredging in the sea access channel were further reduced in 2016, because of the lower dredging volumes and the lower unit price. Also, there were further decreases in the subsidies for the Harbourmaster's Office and for operation and maintenance of the lock complexes. On the other hand subsidies for the Kieldrecht lock began to be received on 1 October 2016. In 2016 the other operating income also included the withholding tax on income from real estate and water catchment, totalling 19 million euros (20 million in 2015).

Non-recurring incomeThe non-recurring operating income includes the capital gains made on the sale of various assets held by the Port Authority. The main such items were the capital gain on the sale of the former Port House (22.4 million euros) and the sale of a number of mobile cranes and a smaller building used for the Port Authority's activities.

1.2 Operating chargesThe comparison between the various categories is shown in the following chart.

VARIATION IN OPERATING CHARGES 2016 2015 2014

Purchases, services and miscellaneous goods The amount of purchases, services and miscellaneous goods rose by 12.6

million euros, mainly due to: Higher costs for dredging work and for maintenance and repair of infra-

structure Costs associated with the introduction of mobile working and flexitime Costs associated with the fitting out, opening and securing of the new

Port House Higher amount for consulting costs, fees and representation

Personnel costs The personnel costs amount to 133.9 million euros, compared with 128.7

million in 2015. This represents an increase of 4%, mainly due to: A rise of 0.7% in the number of full-time equivalents paid An increase of 1.6 million euros in the actual amount of the "responsibili-

sation contribution" (additional pension contribution) paid, or an impact of 1.3%

Index-linking of 2%.

Provisions, depreciation and amortisationThe provisions in 2016 represented an overall income of 13.4 million euros, compared with 5.9 million in 2015. The main reason for this was the pro-vision for pensions ("responsibilisation contribution") being lower by 17.7 million euros. This reduction was attributable to an application of 5.9 milli-on euros due to the settlement received for 2015, and to the refinement of a number of hypotheses for the actuarial calculation based on the experience of recent years. These hypotheses concerned the estimated retirement age of tenured members of personnel, their historic pay grade and the percen-tage of deceased retirees whose partner is still entitled to a survivor's pen-sion. The provision for this responsibilisation contribution arises from the Act of 24 October 2011 (“Act to maintain long-term financing of pensions of tenured members of personnel of the provincial and local authorities and local police areas, amending the Act of 6 May 2002 to set up the integrated police pension fund, and providing special measures for social security and various other legal provisions”). This Act led to changes in the principles for financing of social security contributions for tenured members of per-sonnel: a supplementary pension contribution for individual “responsibi-lisation” (the “responsibilisation contribution") was introduced. Under the terms of this contribution an authority such as the Port Authority has to contribute part (currently set at 50%) of the difference between (a) what it already contributes to financing its pensioners through the general con-tribution, and (b) what the social security institution (in this case RSZPPO) pays the pensioners on behalf of the authority. As a result of this new Act, the Port Authority has an obligation to pay a “responsibilisation contribu-tion." While the obligation itself is probable or indeed certain, the amount of it is not. As such the obligation meets the definition of a provision as laid down by art. 50 of the Royal Decree of 30 January 2001 implementing the terms of the Companies Act. According to arts. 54 and 95 §2 of the Royal Decree of 30 January 2001 a provision must be set aside to cover this. This provision is based on actuarial calculations which take into account among other things mortality tables, discount rates and the impact on pensions of

(in euro x 1000)

-20.000

0.000

Non-recurring operating charges

Other operating charges

ProvisionsDepreciation, amortisation

& write-downs

Wages, social charges and pensions

Misc. goods & services

Trade goods, finished

& semi-finished materials

40.000

20.000

60.000

80.000

100.000

120.000

160.000

140.000


expected wage rises. As in previous years the discount rate applied is 4.5%. A sensitivity analysis of variations in both the discount rate and the percen-tage contribution is included in the notes annexed to the annual accounts.The provision for environmental risks has risen from 95.7 million to 98.9 million euros, mainly due to clean-up of silt contamination in the 4th Har-bour dock and recalculation of the estimated risk for cleaning up the soil, ground water and ponds at the Fort Filips site.

The depreciations rose from 44.8 million euros in 2015 to 49.1 million in 2016, mainly due to the Kieldrecht lock becoming operational as of the fourth quarter and depreciation being charged for the first time.

Other operating chargesThe main components of the other operating charges are the costs of withholding taxes on real estate and the charge passed on for water catchment.

1.3 Financial resultThe financial result has fallen from 16.9 million euros in 2015 to 13.5 million in 2016, mainly due on the one hand to a decrease of 4.4 million euros in capital gains on liquid assets and on the other a decrease of 1.4 million euros in amortisation of capital grants.

2. Balance sheet2.1 AssetsThe value of the tangible and intangible assets has risen by 80.9 million euros. This balance is made up of the following components:

Investments 149.5

Depreciation/amortisation (49.5)

Retirals/write-downs (19.1)

(in million euro)

The investments are mainly made up of the following: Investments in the Kieldrecht lock (38 million euros); Investments in various operational buildings (new Port House, K602, data

centre, centralisation on the Boudewijn Van Cauwelaert lock) (42.6 mil-lion euros);

Investments associated with the Deurganck dock and container or other terminals such as the North Sea terminal, Waasland Canal West Ro/Ro terminal etc. (35.6 million euros);

Acquisition of sites (8 million euros).

The financial fixed assets have risen by 3.5 million euros, firstly due to the positive results from the "Wind aan de Stroom" group in particular, and secondly due to a new stake acquired in the port of San Pedro in Côte d'Ivoire.

The accounts receivable at more than one year have risen as a result of additional contributions by the Port Authority to a "pre-land bank." Other entities have also contributed. It has yet to be decided how much each partner will finally be required to contribute towards the acquisition of sites, which in turn will determine the form of contribution which the present pre-financed amount will take (acquisition of assets and/or contri-bution towards the costs, etc.).

The accounts receivable at one year or less have increased by 14.8 million euros because a number of subsidies required by decree were still not paid before the end of the year, and because the tax assessments for the with-holding tax on income from real estate for the year 2016 were mostly not yet received, and so the corresponding amounts could not be passed on.

The balance of the liquid assets and short-term investments has risen by 52.4 million euros, from 441.8 to 494.2 million euros.


2.2 LiabilitiesThe consolidated reserves have increased because the group's share in the result of 122.7 million euros after deduction of the proposed dividend of 21.3 million euros has been entirely appropriated to the reserves. Taking into account the lower amount of the net book value of the capital grants, the total consolidated equity has risen from 1,153.2 to 1,246.4 million euros.As a result of the change in the form of the company, becoming a "NV van publiek recht" with the corresponding Articles of Association, the break-down of the various items that go to make up the equity has changed with effect from 1 January 2016. According to the Articles of Association, the Port Authority has a capital of 800 million euros represented by 800,000 registered shares, all of them held by the City of Antwerp as the sole shareholder. Accordingly, in 2016 the share capital was brought to 800 million euros by combining the present items "Capital," "Revaluation sur-pluses," "Statutory reserve" and "Non-available reserve," plus as much of the "Available reserves" necessary to bring the amount to 800 million.

The reserves have fallen overall by 13.5 million euros with additions to and application of the various reserves (mainly pensions and environmen-tal risks: see also the notes on this subject).

The long-term financial debts have increased due to the further utilisation of the scheduled credit facilities for construction of the Kieldrecht lock. These were fully utilised by the end of 2016 and repayments started in 2017. The financial debts to be paid off were repaid in the course of 2016 in accordance with the agreed due dates. There were no opportunities to pay off debts early in a financially beneficial way.

The accounts payable at 1 year or less rose strongly (to 165.7 million euros at the end of 2016 compared with 97.3 million at the end of 2015). This increase occurred because a large amount of investment expenditures became due towards the end of the year and these obligations have not yet been paid. In addition a large amount of the tax assessments for the withholding tax on income from real estate for 2016 have not yet been received.

As last year, the profit to be paid out of 21.3 million euros is included un-der the heading "Other debts."

As in previous years, the heading "Accrued charges and deferred income" mainly comprises the concession fees already invoiced in 2016 for the first quarter of 2017.

3. Other required information Apart from the information contained in the consolidated annual ac-

counts and mentioned here above and below, there were no significant events after the date of the Balance Sheet and there were no additional circumstances that could affect the development of the consolidated who-le in any significant way.

The points regarding R&D and the existence of branch offices are not ap-plicable.

No procedures were carried out under application of art. 523 of the Com-panies Act.

No use is made of financial instruments of any significance in judging the assets, liabilities, financial position and result.

As regards the risks and uncertainties facing the Port Authority, these are mainly in the following areas:

Developments in legislation as a result of the Port Decree and its imple-mentation;

Developments in legislation in the field of town and country planning and the delimitation of the port area;

A development in the tax regime to which the Port Authority is subject. The European Commission has launched an official investigation to con-sider whether taxing the Belgian seaports as legal persons is compatible with EU legislation, and whether the ports in Belgium should be subject to company tax.

Compliance with environmental legislation, and changes in the latter. There are also risks which in principle are borne by concession-holders, but if the latter fail to meet them (e.g. in case of bankruptcy) then these obligations could fall upon the Port Authority as owner of the site. Further, there is still a risk posed by as yet unknown pollution of underwater se-diment which might have to be cleaned up. Finally, changes in the law governing underwater sediment could impose additional obligations on the Port Authority.

The development in the percentage amount of the legally imposed “res-ponsibilisation contribution” has a significant impact on the estimated fu-ture pension obligations for the Port Authority, and thus on the associated provision for pensions. The percentage contribution currently stands at 50%. A sensitivity analysis was carried out for this percentage, and for the discount rate of 4.5% used, as mentioned in the comments on the annual accounts.

The attractiveness of ports in general is determined by factors such as accessibility, the efficiency of the port activities and the quality of the hinterland connections.


In addition to the aforementioned risks and uncertainties, the Board of Di-rectors draws attention specifically to section 6.14 of the annual accounts (amount, nature and form of important pending disputes and other signi-ficant obligations), which includes details of a number of pending court cases and risks with a potentially significant financial impact. The rele-vant text from this section is as follows:

Alleged complicity in breach of contract with Seaport Terminals NV/FlandersContai-ner Terminal NV

Seaport Terminals NV and Flanders Container Terminal NV brought a claim in 2003 against Antwerp Port Authority jointly and severally with the other defendants for an amount of € 65,383,652.41 plus compensatory interest at the statutory rate as of 23/08/1999, plus legal costs and interest, with the interest being capitalised on 31/12/2004, 30/06/2011 and 30/04/2013. The claim represents compensation for alleged complicity in breach of contract by the Cast shipping company in connection with Flanders Container Terminal in Zeebrugge. However, on 22 October 2013 the Brugge commercial court declared the claim against Antwerp Port Authority to be admissible yet unfounded. Seaport Terminals NV and Katoen Natie Terminals NV lodged an appeal against this court decision on 11 December 2013. Based on a legal analysis of the information available in the brief and the decision by the Brugge commercial court, which agrees with this legal analysis, the Board of Directors considers that serious and weighty arguments can be brought against this appeal, and so has decided not to set any provision aside to cover it. The case was pleaded on 27/02/2017 and the court decision is pending.

Obligation to pay tonnage dues (Katoen Natie Group) The Katoen Natie Group alleges that the Port Authority has treated various

concession-holders unequally in imposing the tonnage dues laid down in some — but not all — concession agreements. In particular, according to Katoen Natie the obligation to pay tonnage dues has not been applied correctly in the concession agreements for the Deurganck dock. Also according to Katoen Natie, Antwerp Port Authority omitted to invoice the concession-holders in the Deurganck dock for calendar years 2009 to 2012 inclusive. Katoen Natie has already lodged claims against various parties in this connection, and in particular has taken the following steps:

Two claims by Katoen Natie / Seaport Terminals lodged with the European Commission concerning the granting of illegal state support. Various requests for information have been received from the EU instances, to which the Port Authority has replied. On 16 January 2016 the European Commission announced the start of an in-depth investigation of two potential cases of subsidies, namely the decision of 26 March 2013 concerning the reduction in the shortfalls for 2009 – 2013 in favour of PSA Antwerp NV and Antwerp Gateway NV in order to counter the global financial crisis, and the reduced fee payable by Antwerp Gateway NV on the basis of the decision of 12 May 2014 (reconfiguration of DGD South East). In response to the formal opening of the investigation procedure the Belgian Government / Flemish Region submitted answers to the Commission on 15 March 2016. In the course of 2016 the Port Authority submitted further information to the European Commission and answered the questions put to it.

Natie and Seaport Terminals also lodged a claim on 7 March 2013 against the Flemish Region for alleged failure to exercise administrative supervision over the Port Authority, in particular regarding the decision to charge compensation for the failure to meet tonnage obligations. The Port Authority intervened voluntarily in this procedure, whereupon Katoen Natie and Seaport Terminals extended their claim on 30 May 2013. Later, PSA Antwerp NV and Antwerp Gateway also joined the procedure, although not necessarily voluntarily. The claim by Katoen Natie and Seaport Terminals against the Port Authority was mainly aimed at annulling the concession agreement for the concessions in the Deurganck dock, and forbidding the Board of Directors to implement articles 2 and 5 of its decision of 26 March 2013, requiring the total amounts owed by the concession-holders in the Deurganck dock to be invoiced and collected. It also asked for a college of experts to be appointed, and for compensation to be paid to Katoen Natie and Seaport Terminals. The court found the claim to be receivable but unfounded on 12 February 2015. Katoen Natie appealed to a higher court on 21 May 2015, and the appeal procedure is now in progress (arguments were exchanged in the period to December 2016, but no date has yet been set for them to be heard in court).

On 10 April 2013 an application for an injunction was made to the President of the Court of Commerce in Antwerp, with the aim of:

(i) Obtaining a number of documents; (ii) Preventing the Port Authority from taking any steps to implement

the decision of the Board of Directors of 26 March 2013 until the court hearing the main action has issued its decision;

(iii) Requiring the Port Authority to invoice and collect the full amount of tonnage dues, and to pay this into a holding account until the court hearing the main action has given its decision.

The court declared itself non-competent on 1 July 2013, and the Katoen Natie claim was thus rejected.

Katoen Natie appealed against this decision on 10 July 2013, seeking an injunction for the aforementioned decision to be quashed and for the original claim to be declared admissible and founded. The appeal by KTN/SPT against the original judgement was also declared unfounded by a decision of the Court of Appeal on 2 April 2014.

Katoen Natie and Seaport Terminals petitioned the Council of State on 27 May 2013 to quash the decision by the Board of Directors of 26 March 2013; a decision is still awaited, pending a report by a board of auditors.

Further, Antwerp Port Authority intervened voluntarily in the case brought by the Katoen Natie group before the Council of State against the appeal proceedings in the matter of open governance and the re-use of government information in a decision taken by the Court of Appeal. This decision concerned the partial non-admissibility / partial unfoundedness of the request by Katoen Natie to Antwerp Port Authority to provide it (Katoen Natie) with the full minutes of all board meetings over the past five years. The Council of State issued its decision on this matter in its decree of 21 November 2014. As a result of this decree the Port Authority withdrew its initial refusal, and made a new decision on 22 December 2014 not to comply with the request by the Katoen Natie group. Katoen Natie appealed against this new decision on 5 February 2015. On 20 March 2015 the Appeals Commission found that the appeal by the Katoen Natie


had to be declared as founded. On 18 May 2015 Katoen Natie NV lodged a petition with the Council of State to quash the decision of 20 March 2015 by the Appeals Commission. Antwerp Port Authority has once more voluntarily joined this action. This was granted on 15 September 2015. On 8 November 2016 the Council of State issued a judgement quashing the decision by the Court of Appeal that had been contested by Katoen Natie NV (rejecting a request for information to be made public). In the light of this judgement the Port Authority carried out a further assessment of the impact of the request for open information, and subsequently decided to withdraw its rejection dated 22 December 2014; the Port Authority then made a new decision to reject the request on 19 December 2016, this time with supporting reasons being given. In its decision of 22 December 2016 the appeal court took cognisance of the Port Authority's rejection decision, and issued a judgement that the initial appeal by Katoen Natie NV against the decision by the Port Authority on 22 December 2014 was unfounded.

Further, requests for information were previously received in 2013 from the Federal Department of the Economy (Competition) on tonnage dues being charged or not. The Port Authority responded to these requests, and so far no decisions or policies on the part of the Competition authorities are known.

Based on a legal analysis of the available information concerning these various court cases, the board of directors decided not to include anything in the Balance Sheet for the additional amounts that Katoen Natie Group wanted to be invoiced to the concession-holders.

Tonnage dues (concession-holders) A concession-holder lodged a protest and reservations respectively

regarding the invoices for tonnage dues that were issued in implementation of the decision of the Board of Directors of 26 March 2013, in respect of amounts totalling 10.7 million euros (excl. VAT) which were paid by the concession-holder, albeit with reservations. On 2 May 2016 the concession-holder concerned submitted a request for arbitration, claiming certain reservations and demanding repayment of the amounts for the tonnage shortfall in the period 2009 – 2012, plus interest from the date of the payments. The concession-holder also demands repayment of the amounts paid for the tonnage shortfall in 2013. The amount thus claimed comes to a total of 10 million euros (excl. VAT) plus interest as of the date of payment. On the basis of a legal analysis of the available information, the board of directors considered that this protest and reservation can be contested on the basis of good arguments, and so has decided not to set aside any provisions to cover them.

One concession-holder protested two invoices for failure to meet the tonnage obligations for the years 2014 and 2015, pursuant to decisions by the board of directors on 6 July 2015 and 7 May 2016 respectively. The protest concerns one invoice for 4.2 million euros (excl. VAT) and one of 4.3 million (excl. VAT). On the basis of a legal analysis of the available information, the board of directors decided that this protest

can be contested on the basis of good arguments; however it decided on 31 December 2016 to apply a write-down of 50% in accordance with the Accounting Principles. The Port Authority has launched an arbitration process and the procedural agreements between the legal advisors on either side are in course of being prepared.

Forced evacuation of a concession Antwerp Port Authority had a claim brought against it by a concession-

holder for forced evacuation of a concession in 2012 due to safety reasons. Antwerp Port Authority and the City of Antwerp were summoned by the concession-holder in a writ dated 9 December 2013 to pay an amount of 30 million euros, plus interest as of the date of termination of the conditions or substantial change in the conditions of the concession; this amount may be changed in the course of the case. The concession-holder further demanded that at the least a college of experts should be appointed beforehand to estimate the damage suffered by the concession-holder “as a result of the termination of the concession or substantial change in its conditions, including both the loss suffered and the loss of profits." This claim is contested on its grounds by the Port Authority. Waterwegen & Zeekanaal NV also had an injunction brought against it, since the Port Authority in turn holds the Scheldt quays in concession under the terms of an agreement with Waterwegen & Zeekanaal, while the quays themselves are owned by the Flemish Region. Based on a legal examination of the available information in the case, the Board of Directors considers that the claim by the concession-holder can have weighty legal arguments brought against it, or can at least be seriously limited, and so has decided not to make any provision.

The concession-holder concerned also contested the evacuation by the Port Authority, asking the Council of State to declare it invalid. The Council of State decided that this claim was unfounded and the evacuation decision by the Port Authority was not in error.

Without prejudice to the above, the Port Authority considers that even if it were to be definitively ordered to pay compensation, it can claim under its insurance, although this is contested by the insurer.

Antwerp, 8 mei 2017For the Board of Directors

Jacques Vandermeiren Marc Van PeelCEO Chairman of the Board


COLOPHON Havenbedrijf Antwerpen NV van Publiek recht June 2017 — D/2017/12.443/17

annual report 2016 - port of antwerp · havenbedrif antwerpen annual report 2016 12 havenbedrif...

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