Euronav Luxembourg SA
Euronav Luxembourg SA
05/12/2022 | Press release | Distributed by Public on 05/12/2022 00:19
Euronav announces first quarter 2022 results
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Euronav announces first quarter 2022 results
Euronav announces first quarter 2022 results
HIGHLIGHTS
• Further sequential freight rate improvement during late Q1 and into Q2
• Dislocation caused by geopolitical events proving to be positive catalyst
• Application of fleet rejuvenation programme with 7 vessels transacted in 2022
• Q2 to date spot rates 43% fixed at USD 14,000k per day for VLCC with 44% fixed
at USD 19,700k per day for Suezmax
ANTWERP, Belgium, 12 May 2022 - Euronav NV (NYSE: EURN & Euronext: EURN)
("Euronav" or the "Company") reported its non-audited financial results today for the first
quarter ended 31 March 2022.
Hugo De Stoop, CEO of Euronav said: "The conflict in Ukraine has driven considerable
dislocation in tanker market freight patterns as sanctions and so-called self-sanctioning by
market participants has driven ton-mile growth. The uplift to freight rates continues to
have momentum as oil supplies have increased driven by higher prices, OPEC+ production
rising and strategic reserve releases. Medium term industry fundamentals remain
constructive with orderbook ratios at a 24 year low and no new VLCC orders for 9 months.
These are being augmented with factors such as US crude exports hitting 4 year highs and
evidence that surplus tonnage in key markets like the Middle East is reducing. Euronav has
been very active in positioning itself for the next stage of the cycle with a programme of
fleet rejuvenation, a detailed outline of our decarbonisation pathway, and of course via
further sector consolidation since quarter end with our proposed combination with
Frontline. We expect to make progress on all fronts during the rest of 2022."
Key figures
The most important key figures (unaudited) are: to be found in attachment.
For the first quarter of 2022, the Company realized a net loss of USD 43.4 million or USD
(0.22) per share (first quarter 2021: a net loss of 71 USD million or USD (0.35) per share).
Proportionate EBITDA (a non-IFRS measure) for the same period was USD 42.9 million
(first quarter 2021: USD 33.1 million).
TCE
The average daily time charter equivalent rates (TCE, a non IFRS-measure) can be summarized as follows: to be found in attachment.
EURONAV TANKER FLEET
Fleet rejuvenation
In January, Euronav NV announced that upon the redelivery of 4 VLCCs, which occurs at
the maturity of a five-year sale and leaseback agreement, the Company will book a USD
18 million capital gain on disposal of assets. The four VLCCs are: the Nautilus (2006 -
307,284 dwt), Navarin (2007 - 307,284 dwt), Neptun (2007 - 307,284 dwt) and the
Nucleus (2007 - 307,284 dwt). As the first ship was redelivered on 15 December 2021,
USD 4.5 million was booked in the fourth quarter of 2021, whereas the remaining USD
13.5 million was booked in the first quarter of 2022.
In April Euronav purchased two eco-vessels, the Chelsea (2020 - 299,995 dwt) and the
Ghillie (2019 - 297,750 dwt), for USD 179 million in total. They are sisters of our D-class
VLCC vessels Delos, (2021 - 300,200 dwt), Diodorus (2021 - 300,200 dwt), Doris (2021
- 300,200 dwt) and Dickens (2021 - 299,550 dwt). These vessels were all built in Korea
at DSME, are fitted with scrubbers and are the latest generation of eco-type VLCC.
In parallel to this transaction, Euronav sold four older S-class VLCCs for an en-bloc price
of USD 198 million. A capital gain of USD 1.2 million will be recorded on the sale of these
ships. The four vessels are the Sandra (2011 - 323, 527 dwt), Sara (2011 - 323,183 dwt),
Simone (2012 - 315,988 dwt) and the Sonia (2012 - 314,000 dwt). All four vessels are
non-eco VLCCs with higher consumptions than modern versions of such tankers.
After the end of Q1 Euronav agreed to sell the Suezmax Bari (2005 - 159,186 dwt). The
Suezmax was held in our 50/50 joint venture with Ridgebury Tankers and clients of Tufton
Oceanic. 50% of the capital gain of USD 6.5 million (which equals USD 3.25 million) is
attributable to Euronav shareholders.
This active approach has significantly reduced the average age of our tanker fleet. On 1
January 2021 the average age of our VLCC and Suezmax fleet was 9 years old. On 1
January 2022 this had decreased to 8.3 years. This is the result of our active fleet
rejuvenation management that consists of replacing older tonnage with younger vintages
and also adding newbuildings to our fleet without adding to worldwide tanker capacity.
Update - Newbuilding delivery schedule
In January, two newbuilding Suezmaxes, Cedar and Cypress, joined our fleet. Cedar was
delivered on the 7th of January and Cypress on the 20th of January. Both were constructed
at Daehan shipbuilding (DHSC) in South Korea. Six more vessels are currently under
construction, of which three VLCCs that are scheduled for delivery in the first and second
quarter of 2023 and three Suezmaxes, of which one scheduled for delivery in the third
quarter of 2023, and two in the first quarter of 2024.
Outstanding capital expenditure for the six vessels at the end of Q1 2022 was USD 363.2
million.
Maintenance
On our existing fleet, we continue to take advantage of the current challenging freight rate
background to accelerate a number of scheduled dry dockings during 2022, with 16 dry
dockings scheduled (11 VLCCs and 5 Suezmaxes) and 2 Suezmaxes completed already.
Distribution to shareholders
Following the decision of the shareholders meeting of November 2021 to make the issue
premium reserve account available for distribution, the fixed distribution of USD 3 cents
related to Q4 2021 and for Q1 2022 will be paid via a repayment from that issue premium
reserve. This distribution approach will be optimal for shareholders as there will be zero
withholding tax (WHT) associated with such a payment. Shareholders will therefore receive
USD 6 cents per share subject to approval by the shareholders at the annual general
meeting on May 19.
FINANCING AND ACCOUNTING AT EURONAV
Liquidity
Euronav continues to maintain a strong financial base and excellent relationships with its
capital providers: commercial banks, equity and debt investors. At the end of March 2022,
the Company had liquidity of USD 614 million, comprised of USD 169.6 million cash and
USD 444.4 million undrawn committed credit facilities.
Euronav executes a 100% hedging programme to manage volatility of the Company's fuel
stock. This program continues to contribute positively to the company. The paper position
which is booked in the financial result of this quarter for a total amount USD -16.3 million
is more than compensated by the realised gains on consumption and unrealised gains on
the fuel stock for a total amount of USD 20.2 million.
PROPOSED MERGER WITH FRONTLINE
On April 7th, Euronav announced that it had signed a term sheet with Frontline to combine
businesses. We believe it is the most value creating strategy available, through maximizing
service levels and realizing significant synergies, in terms of business and sustainability.
The combined business would provide a platform that would extend Euronav's leading
position in sustainable shipping and would allow the combined company to further advance
Euronav's industry leading sustainability practices.
On a practical level, the global economy will still require crude oil for many years to come
as the global energy transition advances. The proposed combination with Frontline will
facilitate the emergence of a sustainable custodian in this process. The combination would
create a global independent oil tanker operator with leading operational break-even levels
for the combined fleet, improved overall utilization and cost synergies, unparalleled
leadership and expertise in the shipping industry, and the ability to attract and retain future
world-class talent.
The enlarged fleet would enable the combined group to provide better service to customers
on a global basis and maximize value creation throughout the tanker market cycle. We are
convinced that the plan we will present offers the best value, in the short and longer term,
to our shareholders and we will update the markets after our AGM.
EURONAV AGM MAY 19 2022
Euronav encourages all shareholders to exercise their right to vote at the company's annual
general meeting to be held next week in Antwerp. The resolutions include the (re-) election
of three Euronav directors which the Supervisory and Management Boards recommend to
vote in favour for. Three non-independent directors were proposed by CMB to be voted
onto the Supervisory board. Euronav strongly recommends voting against these
resolutions. Our positioning on this matter has been publicised in our recent press releases
including recommendations from the proxy advisor ISS.
(https://www.euronav.com/en/investors/company-news-reports/pressreleases/2022/euronav-opposes-resolutions-proposed-by-cmb)/ (Euronav - Leading proxy
advisory firm ISS supports all of Euronav's Supervisory Board candidates and recommends
against CMB's non-independent nominees)
TANKER MARKET & OUTLOOK
The tanker freight rate spectrum and market activity has been considerably and positively
impacted from disruption following the Russian invasion of Ukraine. This tragic catalyst has
been most impactful on Aframax and Suezmax segments of the market but also indirectly
into VLCC markets. Russia has never featured as a VLCC territory as these vessels are
physically unable to dock at Russian terminals. Before March Russia exported 4.5 million
bpd of crude, mostly to Europe. These barrels will require new markets most likely in the
Far East, and Europe will likely continue to increase both Atlantic (US, Brazil, Caribbean,
West Africa) barrels and those from the Middle East to replace Russian crude.
Put simply, on average Russian seaborne crude has an average voyage of 2,000 nautical
miles; the global average voyage is 5,000 nautical miles and crude transiting from the
Atlantic on average needs 9,000 nautical miles to reach its destination. Russian barrels will
have to travel further and imports to the EU will cover longer distances. US crude exports
have already increased by 1 million bpd based on 4 weeks rolling average since January
and the first VLCC cargo for two years between Abu Dhabi and Europe set sail in April.
Headwinds remain however with downgrades to the IEA crude demand 2022 forecasts, still
scheduled for growth, but now at 1.9 million bpd, a cut of 250k bpd from March. Recycling
remains elusive and puzzling with 1 VLCC and 6 Suezmax (all 6 in April 2022) exiting the
fleet this year despite record steel prices (VLCC scrap value USD 28.3 million and Suezmax
scrap value USD 15.3 million at the end of April 2022).
However, Aframax recycling is running at cycle highs of 4% and historically Aframax
recycling has been ahead of VLCC and Suezmax demolition rates in terms of timing for the
past three cycles. The lack of recycling dovetails with our thesis that the 60-70 VLCC and
35-45 Suezmax engaged in the illicit Iranian crude trade have been dominated by older,
privately held tankers that would ordinarily have been recycled by this stage of the cycle
but have been incentivised to continue trading illegally instead. The return of Iranian crude
to the global oil market remains an important potential catalyst for the large crude tanker
market.
The broader and medium-term outlook for the tanker sector however remains constructive.
We believe that core fundamentals - orderbook/fleet ratio (25-year lows at 7% VLCC and
6% for Suezmax), aged fleet (27% VLCC aged over 15 years with same ratio at 31% for
Suezmax) and incoming emissions regulations (e.g. EEXI in 2023) - provide a supportive
base for recovery. The catalyst for recapturing higher and sustained freight rates will come
from delivery in oil supply, consumption, and inventory restocking that key commentators
such as the IEA are forecasting for later this 2022.
So far in the second quarter of 2022, the Euronav VLCC fleet that operated in the Tankers
International Pool has earned about USD 14,000 per day and 43% of the available days
have been fixed. Euronav's Suezmax fleet trading on the spot market has earned about
USD 19,700 per day on average with 44% of the available days fixed.
SUSTAINABILITY ACTIVITY
Award recognition for sustainability financing
Euronav has been awarded the 'Sustainability linked deal of the year 2021' by Marine
Money 2022 for our 80 million sustainability linked credit facility signed with a number of
commercial banks. This additional financing agreed last year matches a key proportion of
our operational costs (in Euro currency) in the same currency and has performance
features embedded within the facility. Euronav will therefore benefit from a lower coupon
should we meet or beat emission-based targets, but will also pay a higher coupon should
we not meet such targets. The banks included with the financing are KBC, ABN AMRO,
Belfius, ING Belgium, Société Générale, BNP Paribas Fortis and Gigarant - infrastructure
funding arm of Flemish Government. Euronav now has over 40% of its funding with
sustainability linked features.
Sustainability Presentation May 5th
On May 5th 2022 Euronav management gave a comprehensive and detailed outline on how
we intend to be net zero by 2050. Details on this presentation are given below.
https://www.euronav.com/en/investors/company-newsreports/presentations/2022/presentation-euronavs-road-to-decarbonization/
CONFERENCE CALL
The call will be a webcast with an accompanying slideshow. You can find details of this
conference call below and on the "Investor Relations" page of the Euronav website at
http://investors.euronav.com.
Webcast Information
Event Type: Audio webcast with user-controlled slide presentation
Event Date: 12 May 2022
Event Time: 8 a.m. EST / 2 p.m. CET
Event Title: "Q1 2022 Earnings Conference Call"
Event Site/URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=H9J
aHF5q
Telephone participants may avoid any delays by pre-registering for the call using the
following link to receive a special dial-in number and PIN conference call registration link:
https://dpregister.com/sreg/10165326/f236a9051c Pre-registration fields of
information to be gathered: name, company, email.
Telephone participants located in the U.S. who are unable to pre-register may dial in to
+1-877-328-5501 on the day of the call. Others may use the international dial-in number
+1-412-317-5471.
A replay of the call will be available until 19 May 2022, beginning at 9 a.m. EST / 3 p.m.
CET on 12 May 2022. Telephone participants located in the U.S. can dial +1-877-344-
7529. Others can dial +1-412-317-0088. Please reference the conference number
10165326.
*
* *
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to provide prospective
information about their business. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than statements of
historical facts. The Company desires to take advantage of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The words "believe", "anticipate",
"intends", "estimate", "forecast", "project", "plan", "potential", "may", "should", "expect",
"pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions,
many of which are based, in turn, upon further assumptions, including without limitation,
our management's examination of historical operating trends, data contained in our
records and other data available from third parties. Although we believe that these
assumptions were reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could
cause actual results to differ materially from those discussed in the forward-looking
statements include: the failure of counterparties to fully perform their contracts with us,
the strength of world economies and currencies, general market conditions, including
fluctuations in charter rates and vessel values, changes in demand for tanker vessel
capacity, changes in our operating expenses, including bunker prices, dry-docking and
insurance costs, the market for our vessels, availability of financing and refinancing,
charter counterparty performance, ability to obtain financing and comply with covenants
in such financing arrangements, changes in governmental rules and regulations or actions
taken by regulatory authorities, potential liability from pending or future litigation, general
domestic and international political conditions, potential disruption of shipping routes due
to accidents or political events, vessels breakdowns and instances of off-hires and other
factors. Please see our filings with the United States Securities and Exchange Commission
for a more complete discussion of these and other risks and uncertainties.
*
**
Contact:
Brian Gallagher - Head of IR, Research and Communications & Management Board
member
Tel: +44 20 78 70 04 36
Email: [email protected]
Annual General Meeting 2022: Thursday 19 May 2022
About Euronav
Euronav is an independent tanker company engaged in the ocean transportation and storage of crude oil. The
Company is headquartered in Antwerp, Belgium, and has offices throughout Europe and Asia. Euronav is listed
on Euronext Brussels and on the NYSE under the symbol EURN. Euronav employs its fleet both on the spot and
period market. VLCCs on the spot market are traded in the Tankers International pool of which Euronav is one
of the major partners. Euronav's owned and operated fleet consists of 2 V-Plus vessels, 40 VLCCs (three of which
on a bareboat in contract and three of which time chartered in) with further three under construction, 26
Suezmaxes (of which two vessels are time chartered in) with a further three under construction and 2 FSO vessels
(both owned in 50%-50% joint venture).
The condensed consolidated statements(unaudited) are: to be found in attachment.
HIGHLIGHTS
• Further sequential freight rate improvement during late Q1 and into Q2
• Dislocation caused by geopolitical events proving to be positive catalyst
• Application of fleet rejuvenation programme with 7 vessels transacted in 2022
• Q2 to date spot rates 43% fixed at USD 14,000k per day for VLCC with 44% fixed
at USD 19,700k per day for Suezmax
ANTWERP, Belgium, 12 May 2022 - Euronav NV (NYSE: EURN & Euronext: EURN)
("Euronav" or the "Company") reported its non-audited financial results today for the first
quarter ended 31 March 2022.
Hugo De Stoop, CEO of Euronav said: "The conflict in Ukraine has driven considerable
dislocation in tanker market freight patterns as sanctions and so-called self-sanctioning by
market participants has driven ton-mile growth. The uplift to freight rates continues to
have momentum as oil supplies have increased driven by higher prices, OPEC+ production
rising and strategic reserve releases. Medium term industry fundamentals remain
constructive with orderbook ratios at a 24 year low and no new VLCC orders for 9 months.
These are being augmented with factors such as US crude exports hitting 4 year highs and
evidence that surplus tonnage in key markets like the Middle East is reducing. Euronav has
been very active in positioning itself for the next stage of the cycle with a programme of
fleet rejuvenation, a detailed outline of our decarbonisation pathway, and of course via
further sector consolidation since quarter end with our proposed combination with
Frontline. We expect to make progress on all fronts during the rest of 2022."
Key figures
The most important key figures (unaudited) are: to be found in attachment.
For the first quarter of 2022, the Company realized a net loss of USD 43.4 million or USD
(0.22) per share (first quarter 2021: a net loss of 71 USD million or USD (0.35) per share).
Proportionate EBITDA (a non-IFRS measure) for the same period was USD 42.9 million
(first quarter 2021: USD 33.1 million).
TCE
The average daily time charter equivalent rates (TCE, a non IFRS-measure) can be summarized as follows: to be found in attachment.
EURONAV TANKER FLEET
Fleet rejuvenation
In January, Euronav NV announced that upon the redelivery of 4 VLCCs, which occurs at
the maturity of a five-year sale and leaseback agreement, the Company will book a USD
18 million capital gain on disposal of assets. The four VLCCs are: the Nautilus (2006 -
307,284 dwt), Navarin (2007 - 307,284 dwt), Neptun (2007 - 307,284 dwt) and the
Nucleus (2007 - 307,284 dwt). As the first ship was redelivered on 15 December 2021,
USD 4.5 million was booked in the fourth quarter of 2021, whereas the remaining USD
13.5 million was booked in the first quarter of 2022.
In April Euronav purchased two eco-vessels, the Chelsea (2020 - 299,995 dwt) and the
Ghillie (2019 - 297,750 dwt), for USD 179 million in total. They are sisters of our D-class
VLCC vessels Delos, (2021 - 300,200 dwt), Diodorus (2021 - 300,200 dwt), Doris (2021
- 300,200 dwt) and Dickens (2021 - 299,550 dwt). These vessels were all built in Korea
at DSME, are fitted with scrubbers and are the latest generation of eco-type VLCC.
In parallel to this transaction, Euronav sold four older S-class VLCCs for an en-bloc price
of USD 198 million. A capital gain of USD 1.2 million will be recorded on the sale of these
ships. The four vessels are the Sandra (2011 - 323, 527 dwt), Sara (2011 - 323,183 dwt),
Simone (2012 - 315,988 dwt) and the Sonia (2012 - 314,000 dwt). All four vessels are
non-eco VLCCs with higher consumptions than modern versions of such tankers.
After the end of Q1 Euronav agreed to sell the Suezmax Bari (2005 - 159,186 dwt). The
Suezmax was held in our 50/50 joint venture with Ridgebury Tankers and clients of Tufton
Oceanic. 50% of the capital gain of USD 6.5 million (which equals USD 3.25 million) is
attributable to Euronav shareholders.
This active approach has significantly reduced the average age of our tanker fleet. On 1
January 2021 the average age of our VLCC and Suezmax fleet was 9 years old. On 1
January 2022 this had decreased to 8.3 years. This is the result of our active fleet
rejuvenation management that consists of replacing older tonnage with younger vintages
and also adding newbuildings to our fleet without adding to worldwide tanker capacity.
Update - Newbuilding delivery schedule
In January, two newbuilding Suezmaxes, Cedar and Cypress, joined our fleet. Cedar was
delivered on the 7th of January and Cypress on the 20th of January. Both were constructed
at Daehan shipbuilding (DHSC) in South Korea. Six more vessels are currently under
construction, of which three VLCCs that are scheduled for delivery in the first and second
quarter of 2023 and three Suezmaxes, of which one scheduled for delivery in the third
quarter of 2023, and two in the first quarter of 2024.
Outstanding capital expenditure for the six vessels at the end of Q1 2022 was USD 363.2
million.
Maintenance
On our existing fleet, we continue to take advantage of the current challenging freight rate
background to accelerate a number of scheduled dry dockings during 2022, with 16 dry
dockings scheduled (11 VLCCs and 5 Suezmaxes) and 2 Suezmaxes completed already.
Distribution to shareholders
Following the decision of the shareholders meeting of November 2021 to make the issue
premium reserve account available for distribution, the fixed distribution of USD 3 cents
related to Q4 2021 and for Q1 2022 will be paid via a repayment from that issue premium
reserve. This distribution approach will be optimal for shareholders as there will be zero
withholding tax (WHT) associated with such a payment. Shareholders will therefore receive
USD 6 cents per share subject to approval by the shareholders at the annual general
meeting on May 19.
FINANCING AND ACCOUNTING AT EURONAV
Liquidity
Euronav continues to maintain a strong financial base and excellent relationships with its
capital providers: commercial banks, equity and debt investors. At the end of March 2022,
the Company had liquidity of USD 614 million, comprised of USD 169.6 million cash and
USD 444.4 million undrawn committed credit facilities.
Euronav executes a 100% hedging programme to manage volatility of the Company's fuel
stock. This program continues to contribute positively to the company. The paper position
which is booked in the financial result of this quarter for a total amount USD -16.3 million
is more than compensated by the realised gains on consumption and unrealised gains on
the fuel stock for a total amount of USD 20.2 million.
PROPOSED MERGER WITH FRONTLINE
On April 7th, Euronav announced that it had signed a term sheet with Frontline to combine
businesses. We believe it is the most value creating strategy available, through maximizing
service levels and realizing significant synergies, in terms of business and sustainability.
The combined business would provide a platform that would extend Euronav's leading
position in sustainable shipping and would allow the combined company to further advance
Euronav's industry leading sustainability practices.
On a practical level, the global economy will still require crude oil for many years to come
as the global energy transition advances. The proposed combination with Frontline will
facilitate the emergence of a sustainable custodian in this process. The combination would
create a global independent oil tanker operator with leading operational break-even levels
for the combined fleet, improved overall utilization and cost synergies, unparalleled
leadership and expertise in the shipping industry, and the ability to attract and retain future
world-class talent.
The enlarged fleet would enable the combined group to provide better service to customers
on a global basis and maximize value creation throughout the tanker market cycle. We are
convinced that the plan we will present offers the best value, in the short and longer term,
to our shareholders and we will update the markets after our AGM.
EURONAV AGM MAY 19 2022
Euronav encourages all shareholders to exercise their right to vote at the company's annual
general meeting to be held next week in Antwerp. The resolutions include the (re-) election
of three Euronav directors which the Supervisory and Management Boards recommend to
vote in favour for. Three non-independent directors were proposed by CMB to be voted
onto the Supervisory board. Euronav strongly recommends voting against these
resolutions. Our positioning on this matter has been publicised in our recent press releases
including recommendations from the proxy advisor ISS.
(https://www.euronav.com/en/investors/company-news-reports/pressreleases/2022/euronav-opposes-resolutions-proposed-by-cmb)/ (Euronav - Leading proxy
advisory firm ISS supports all of Euronav's Supervisory Board candidates and recommends
against CMB's non-independent nominees)
TANKER MARKET & OUTLOOK
The tanker freight rate spectrum and market activity has been considerably and positively
impacted from disruption following the Russian invasion of Ukraine. This tragic catalyst has
been most impactful on Aframax and Suezmax segments of the market but also indirectly
into VLCC markets. Russia has never featured as a VLCC territory as these vessels are
physically unable to dock at Russian terminals. Before March Russia exported 4.5 million
bpd of crude, mostly to Europe. These barrels will require new markets most likely in the
Far East, and Europe will likely continue to increase both Atlantic (US, Brazil, Caribbean,
West Africa) barrels and those from the Middle East to replace Russian crude.
Put simply, on average Russian seaborne crude has an average voyage of 2,000 nautical
miles; the global average voyage is 5,000 nautical miles and crude transiting from the
Atlantic on average needs 9,000 nautical miles to reach its destination. Russian barrels will
have to travel further and imports to the EU will cover longer distances. US crude exports
have already increased by 1 million bpd based on 4 weeks rolling average since January
and the first VLCC cargo for two years between Abu Dhabi and Europe set sail in April.
Headwinds remain however with downgrades to the IEA crude demand 2022 forecasts, still
scheduled for growth, but now at 1.9 million bpd, a cut of 250k bpd from March. Recycling
remains elusive and puzzling with 1 VLCC and 6 Suezmax (all 6 in April 2022) exiting the
fleet this year despite record steel prices (VLCC scrap value USD 28.3 million and Suezmax
scrap value USD 15.3 million at the end of April 2022).
However, Aframax recycling is running at cycle highs of 4% and historically Aframax
recycling has been ahead of VLCC and Suezmax demolition rates in terms of timing for the
past three cycles. The lack of recycling dovetails with our thesis that the 60-70 VLCC and
35-45 Suezmax engaged in the illicit Iranian crude trade have been dominated by older,
privately held tankers that would ordinarily have been recycled by this stage of the cycle
but have been incentivised to continue trading illegally instead. The return of Iranian crude
to the global oil market remains an important potential catalyst for the large crude tanker
market.
The broader and medium-term outlook for the tanker sector however remains constructive.
We believe that core fundamentals - orderbook/fleet ratio (25-year lows at 7% VLCC and
6% for Suezmax), aged fleet (27% VLCC aged over 15 years with same ratio at 31% for
Suezmax) and incoming emissions regulations (e.g. EEXI in 2023) - provide a supportive
base for recovery. The catalyst for recapturing higher and sustained freight rates will come
from delivery in oil supply, consumption, and inventory restocking that key commentators
such as the IEA are forecasting for later this 2022.
So far in the second quarter of 2022, the Euronav VLCC fleet that operated in the Tankers
International Pool has earned about USD 14,000 per day and 43% of the available days
have been fixed. Euronav's Suezmax fleet trading on the spot market has earned about
USD 19,700 per day on average with 44% of the available days fixed.
SUSTAINABILITY ACTIVITY
Award recognition for sustainability financing
Euronav has been awarded the 'Sustainability linked deal of the year 2021' by Marine
Money 2022 for our 80 million sustainability linked credit facility signed with a number of
commercial banks. This additional financing agreed last year matches a key proportion of
our operational costs (in Euro currency) in the same currency and has performance
features embedded within the facility. Euronav will therefore benefit from a lower coupon
should we meet or beat emission-based targets, but will also pay a higher coupon should
we not meet such targets. The banks included with the financing are KBC, ABN AMRO,
Belfius, ING Belgium, Société Générale, BNP Paribas Fortis and Gigarant - infrastructure
funding arm of Flemish Government. Euronav now has over 40% of its funding with
sustainability linked features.
Sustainability Presentation May 5th
On May 5th 2022 Euronav management gave a comprehensive and detailed outline on how
we intend to be net zero by 2050. Details on this presentation are given below.
https://www.euronav.com/en/investors/company-newsreports/presentations/2022/presentation-euronavs-road-to-decarbonization/
CONFERENCE CALL
The call will be a webcast with an accompanying slideshow. You can find details of this
conference call below and on the "Investor Relations" page of the Euronav website at
http://investors.euronav.com.
Webcast Information
Event Type: Audio webcast with user-controlled slide presentation
Event Date: 12 May 2022
Event Time: 8 a.m. EST / 2 p.m. CET
Event Title: "Q1 2022 Earnings Conference Call"
Event Site/URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=H9J
aHF5q
Telephone participants may avoid any delays by pre-registering for the call using the
following link to receive a special dial-in number and PIN conference call registration link:
https://dpregister.com/sreg/10165326/f236a9051c Pre-registration fields of
information to be gathered: name, company, email.
Telephone participants located in the U.S. who are unable to pre-register may dial in to
+1-877-328-5501 on the day of the call. Others may use the international dial-in number
+1-412-317-5471.
A replay of the call will be available until 19 May 2022, beginning at 9 a.m. EST / 3 p.m.
CET on 12 May 2022. Telephone participants located in the U.S. can dial +1-877-344-
7529. Others can dial +1-412-317-0088. Please reference the conference number
10165326.
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Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to provide prospective
information about their business. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than statements of
historical facts. The Company desires to take advantage of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The words "believe", "anticipate",
"intends", "estimate", "forecast", "project", "plan", "potential", "may", "should", "expect",
"pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions,
many of which are based, in turn, upon further assumptions, including without limitation,
our management's examination of historical operating trends, data contained in our
records and other data available from third parties. Although we believe that these
assumptions were reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could
cause actual results to differ materially from those discussed in the forward-looking
statements include: the failure of counterparties to fully perform their contracts with us,
the strength of world economies and currencies, general market conditions, including
fluctuations in charter rates and vessel values, changes in demand for tanker vessel
capacity, changes in our operating expenses, including bunker prices, dry-docking and
insurance costs, the market for our vessels, availability of financing and refinancing,
charter counterparty performance, ability to obtain financing and comply with covenants
in such financing arrangements, changes in governmental rules and regulations or actions
taken by regulatory authorities, potential liability from pending or future litigation, general
domestic and international political conditions, potential disruption of shipping routes due
to accidents or political events, vessels breakdowns and instances of off-hires and other
factors. Please see our filings with the United States Securities and Exchange Commission
for a more complete discussion of these and other risks and uncertainties.
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Contact:
Brian Gallagher - Head of IR, Research and Communications & Management Board
member
Tel: +44 20 78 70 04 36
Email: [email protected]
Annual General Meeting 2022: Thursday 19 May 2022
About Euronav
Euronav is an independent tanker company engaged in the ocean transportation and storage of crude oil. The
Company is headquartered in Antwerp, Belgium, and has offices throughout Europe and Asia. Euronav is listed
on Euronext Brussels and on the NYSE under the symbol EURN. Euronav employs its fleet both on the spot and
period market. VLCCs on the spot market are traded in the Tankers International pool of which Euronav is one
of the major partners. Euronav's owned and operated fleet consists of 2 V-Plus vessels, 40 VLCCs (three of which
on a bareboat in contract and three of which time chartered in) with further three under construction, 26
Suezmaxes (of which two vessels are time chartered in) with a further three under construction and 2 FSO vessels
(both owned in 50%-50% joint venture).
The condensed consolidated statements(unaudited) are: to be found in attachment.