EARNINGS CALL Q3 2019
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FORWARD LOOKING STATEMENTS
Matters discussed in this presentation may constitute forward-looking statements under U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the Company's current views with respect to future events and financial performance and may 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. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, the delivery of vessels, the outlook for tanker shipping rates, general industry conditions future operating results of the Company's vessels, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. 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 obligations to us, the strength of the world economies and currencies, general market conditions, including changes in tanker vessel charter hire rates and vessel values, changes in demand for tankers, changes in our vessel operating expenses, including dry-docking, crewing and insurance costs, or actions taken by regulatory authorities, ability of customers of our pools to perform their obligations under charter contracts on a timely basis, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. We undertake no obligation to publicly update or revise any forward looking statement contained in this presentation, whether as a result of new information, future events or otherwise, except as required by law. In light of the risks, uncertainties and assumptions, the forward looking events discussed in this presentation might not occur, and our actual results could differ materially from those anticipated in these forward-looking statements.
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CONTENT
- Q3 2019 HIGHLIGHTS
- FINANCIAL REVIEW
- CURRENT THEMES
- OUTLOOK
- Q&A
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HIGHLIGHTS Q3 2019
•Robust crude tanker fundamentals reflected in improving freight market
•Euronav to pay quarterlydividends starting in 2020 | USD/day | ||
•Very strong start to Q4 with VLCC rates booked at USD 60,900 per day so far | |||
•Euronav has 90% of trading fleet exposed to spot market for 4Q19/Q120 | |||
•Outlook - Q4 so far VLCC 60% fixed at around 60.9k per day | |||
Q4 so far Suezmax 48% fixed at around 27.3k per day | |||
In USD per day | Third quarter 2019 | Third quarter 2018 | |
VLCC | |||
Average spot rate (in TI pool)* | 25,036 | 17,773 | |
Average time charter rate** | 32,790 | 31,374 | |
USD/day | |||
SUEZMAX | |||
Average spot rate*** | 17,121 | 14,919 | |
Average time charter rate** | 29,884 | 29,624 | |
*Euronav owned ships in TI Pool **Including profit share where applicable *** Excluding technical offhire days
30000
25000
20000
15000
10000
5000
0
30000
25000
20000
15000
10000
5000
0
VLCC
P&L | ||
Q3 | ||
B/E | ||
19 | ||
Suezmax
P&L
B/E
Q3
19
Q3
18
Q3
18
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FINANCIAL HIGHLIGHTS - INCOME
The most important key figures (unaudited) are:
(in thousands of USD) | First | Third quarter | ||
Semester | ||||
2019 | 2019 | |||
Revenue | 401,936 | 175,287 | ||
Other operating income | 3,160 | 1,419 | ||
Voyage expenses and commissions | (74,501) | (35,300) | ||
Vessel operating expenses | (107,375) | (50,949) | ||
Charter hire expenses | - | - | ||
General and administrative expenses | (36,376) | (14,972) | ||
Net gain (loss) on disposal of tangible assets | 381 | 14,406 | ||
Depreciation | (168,541) | (84,603) | ||
- | - | |||
Net finance expenses | (47,376) | (30,948) | ||
Bargain purchase | - | - | ||
Share of profit (loss) of equity accounted | 7,660 | 4,160 | ||
investees | ||||
Result before taxation | (21,032) | (21,500) | ||
Tax benefit (expense) | 2,002 | (1,403) | ||
Profit (loss) for the period | (19,030) | (22,903) | ||
Attributable to: Owners of the company | (19,030) | (22,903) |
Year-to- | Year-to- | |
Date 2019 | Date 2018 |
577,223 | 363,917 |
4,579 | 3,538 |
(109,801) | (96,924) |
(158,324) | (131,980) |
- | (23,270) |
(51,348) | (50,255) |
14,787 | 19,102 |
(253,144) | (192,210) |
- | - |
(78,324) | (50,561) |
- | 36,261 |
11,820 | 12,293 |
(42,532) | (110,089) |
599 | (260) |
(41,933) | (110,349) |
(41,933) | (110,349) |
- Q3 drivers similar to Q2 with extended refinery maintenance & preparation ahead of IMO 2020
Information per share: | |||||||
(in USD per share) | First | Third quarter | Year-to- | Year-to- | |||
Semester | |||||||
2019 | 2019 | Date 2019 | Date 2018 | ||||
Weighted average number of shares (basic) * | 216,994,426 | 215,080,810 | 216,349,544 | 182,893,823 | |||
Result after taxation | (0.09) | (0.11) | (0.19) | (0.60) | |||
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FINANCIAL HIGHLIGHTS - BALANCE SHEET
HIGHLIGHTS
2019 | 2018 | ||
(in $ million) | Sep-19 | Dec-18 | |
Cash | 183.7 | 173.0 | |
Restricted cash | 0.0 | 0.1 | |
Other current assets | 467.7 | 348.0 | |
Long term assets: | |||
Newbuildings | 0.0 | 0.0 | |
Vessels | 3,263.8 | 3,520.1 | |
Other long term assets | 149.8 | 86.2 | |
Total assets | 4,065.1 | 4,127.4 | |
Current liabilities | 346.6 | 287.1 | |
Long term debt | 1,549.6 | 1,569.6 | |
Other long term liabilities | 11.3 | 10.1 | |
Equity | 2,157.5 | 2,260.5 | |
Total liabilities and stockholders' equity | 4,065.1 | 4,127.4 |
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2
Leverage
44% marked to market
(46% book value)
Fleet Development
- No outstanding capex for Euronav
- Sale of VK Eddie in Q3
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CONSOLIDATION - ALREADY HAPPENING
- Over 70 VLCCs on one platform from 2020
- Active commercial consolidation
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Clarksons Source:
VLCC TCE year 1
Breakeven
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VLCC 1 year TCE
0 | 10,000 | 20,000 | 30,000 | 40,000 | 50,000 | 60,000 | 70,000 | 80,000 | 90,000 | 100,000 | SECTORTANKERFORFOUNDATIONS SOLIDRATESFREIGHTFORCATALYSTPROVIDES STORAGE INDUCED IMO | |
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Clarksons Source:
VLCC TCE year 1
Breakeven
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VLCC 1 year TCE
0 | 10,000 | 20,000 | demand)oil2hVLCCs, | fundamentalstermshort onstorageboost,(IMO40,000 | 60,000 | 70,000 | 80,000 | 90,000 | 100,000 | SECTORTANKERFORFOUNDATIONS SOLIDRATESFREIGHTFORCATALYSTPROVIDES STORAGE INDUCED IMO | ||
30,000 | 50,000 | |||||||||||
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SOLID FOUNDATIONS FOR TANKER SECTOR
IMO INDUCED STORAGE PROVIDES CATALYST FOR FREIGHT RATES
VLCC 1 year TCE
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
long term fundamentals
(Fleet age profile, Orderbook <10% fleet)
short term fundamentals
(IMO boost, storage on VLCCs, 2h oil demand)
Jan-15Mar-15May-15Jul-15Sep-15Nov-15Jan-16Mar-16May-16Jul-16Sep-16Nov-16Jan-17Mar-17May-17Jul-17Sep-17Nov-17Jan-18 | Mar-18May-18Jul-18 | Sep-18Nov-18Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22 | ||
1 year | TCE VLCC | Breakeven | ||
Source:Clarksons | 10 |
SOLID FOUNDATIONS FOR TANKER SECTOR
IMO INDUCED STORAGE PROVIDES CATALYST FOR FREIGHT RATES
VLCC 1 year TCE
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
temporary factors
(Retrofits, Sanctions, Oil supply outages)
long term fundamentals
(Fleet age profile, Orderbook <10% fleet)
short term fundamentals
(IMO boost, storage on VLCCs, 2h oil demand)
Jan-15Mar-15May-15Jul-15Sep-15Nov-15Jan-16Mar-16May-16Jul-16Sep-16Nov-16Jan-17Mar-17May-17Jul-17Sep-17Nov-17Jan-18 | Mar-18May-18Jul-18 | Sep-18Nov-18Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22 | ||
1 year | TCE VLCC | Breakeven | ||
Source:Clarksons | 11 |
EURONAV - ACTIVE PREPARATION FOR IMO 2020
Preparation
Procurement team purchased LSFO
- Security of Supply
- Safety & Reliability
- Quality Control
- Lower Emissions
Procurement & Testing | Deployment | |||||
560 | ||||||
545 | ||||||
540 | ||||||
520 | ||||||
fuel cost | 500 | |||||
480 | ||||||
$ per ton | ||||||
460 | ||||||
447 | ||||||
440 | ||||||
420 | ||||||
400 | ||||||
0.5% Fuel Oil | Current HSFO price | |||||
Singapore |
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OUTLOOK
STRONG START TO Q4 - VESSEL SUPPLY UPGRADED
Demand for | Supply | Ton miles & | Vessel | Euronav |
Oil | of Oil | IMO 2020 | Supply | Balance |
sheet | ||||
Change from Q2
Robust | US v Saudi | Positive | IMO to help | Flexibility |
No change | No change | No change | CHANGE | No Change |
UPGRADE | ||||
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Q&A
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Disclaimer
Euronav NV published this content on 29 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2019 09:16:06 UTC