EURONAV NV INVESTOR UPDATE - JEFFERIES
A P R I L 2 0 2 0
EURONAV - WHO WE ARE EURONAV - WHO WE ARE
The world's largest, independent quoted crude tanker platform
46 VLCC inc 4 N/B | 26 Suezmax* | ||
2% | |||
24% | 23% | 16% | |
Av Age | 45% | Av Age 15% | |
7.3 Yrs | 11.1 Yrs | ||
29% | 46% | ||
0-5 yrs 6-10 yrs 11-14 yrs 15+ yrs | |||
0-5 yrs | 6-10 yrs 11-14 yrs 15+ yrs | ||
2 FSO* | 2 ULCC |
* Includes JV
International company - internationally connected
Headquarters in Antwerp
Euronav offices
Partnerships
Mix of long-term time charter and spot exposure
13%
Spot Days
Fixed Days
87%
2
EURONAV STRATEGY - SHAREHOLDER FOCUS
Shareholder returns since 2014 | Repayment schedule and RCF reductions |
400 | USD 3.11 DPS | ||||||||||||
since 2015* | |||||||||||||
300 | 270 | ||||||||||||
$1.035bn | |||||||||||||
back | |||||||||||||
dividend paid | |||||||||||||
Buy | |||||||||||||
200 | since 2004 | ||||||||||||
& | $16.95 p/s | ||||||||||||
Dividend | 123 | ||||||||||||
100 | |||||||||||||
77 | |||||||||||||
Income, | 45 | 23 | 32 | ||||||||||
7 | |||||||||||||
3 | |||||||||||||
$m net | 0 | ||||||||||||
-100 | |||||||||||||
-200 | |||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||
Net Income | Dividend | Share Buy Back | |||||||||||
Source: Bloomberg | * Includes proposed 29c final dividend for 2h 2019 |
600 | Leverage: | ||||||||||||||||||
Millions | 45%* book | ||||||||||||||||||
500 | value | ||||||||||||||||||
400 | |||||||||||||||||||
300 | |||||||||||||||||||
200 | |||||||||||||||||||
100 | |||||||||||||||||||
0 | |||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |||||
Reductions | Repayments | ||||||||||||||||||
Balloon to be refinanced | Bond Maturity | ||||||||||||||||||
Source: Euronav | *leverage as per December 31st 2019 | ||||||||||||||||||
including cash advance financed for | 3 | ||||||||||||||||||
three new vessels exc capex |
EURONAV STRATEGY - LIQUIDITY FOCUS
+$220m 3x VLCC DELIVERY Q4 20 Q1 21
4
EURONAV
OPERATIONAL LEVERAGE WITH CONTRACTUAL INCOME SUPPORT
Each $5,000 uplift in both VLCC and Suezmax rates | |
improves net revenue and EBITDA by $112mm | $1,232 |
$560
$336
$112
BASE
+$5,000 | +$15,000 | +$25,000 | +$55,000 | ||
per day | per day | per day | per day | ||
VLCC TCE rates | $25,000 | $30,000 | $40,000 | $50,000 | $80,000 |
Suezmax TCE rates | $20,000 | $25,000 | $35,000 | $45,000 | $75,000 |
+
FSO 5 year contract to 2022 | Long term TC 7 year contract to 2024 | Commercial TC relationships | 5 |
PRODUCTION GROWTH GOOD FOR TON MILES - FEARNLEYS
6
SAUDI TO US - FORGOTTEN TRADE LANE
SAUDI CRUDE EXPORTS MOVED FROM 1M BPD TO ALMOST ZERO - LIKELY RETURN TO AT LEAST 1M BPD+
7
US CRUDE EXPORTS
US EXPORTS AVERAGE 3.15MBPD PAST 12 MONTHS - LIKELY UNDER PRESSURE 2021 AS US SHALE HEDGES COME OFF
Average 3.15m bpd
8
CONTANGO HISTORY - STILL > 2015
$5 CONTANGO OVER 6 MONTHS $0.83 PER MONTH
9
CONTANGO 2020 STEEPER AND QUICKER THAN 2008 COUSIN
10
CONTANGO - HISTORY SUGGESTS CAN
MAKE A DIFFERENCE…AND PERSISTS
35 | 33 | 6 | ||||
32 31 | ||||||
30 | 5 | |||||
30 | ||||||
27 | 26 | 4 | ||||
market storage | 26 | |||||
25 | 23 | 23 | 24 | 3 | ||
per month | ||||||
20 | 2 | |||||
No of VLCCs in | 1 | Spread $ p/b | ||||
15 | 0 | |||||
10 | -1 | |||||
-2 | ||||||
5 | ||||||
-3 | ||||||
0 | -4 | |||||
2015 | 2016 | 2017 | 2018 | |||
storage | contango |
Source: Clarksons
11
WHAT COULD FLOATING STORAGE LOOK LIKE?
18025%
168
160
No of VLCC
140
120
100
80
60
40
20
0
70
38
20 20 20
Iranian | IMO/fuel | Structural | Current | Potential | Total | ||
sanctioned | oil storage | storage | contango | contango | |||
VLCC | storage | storage | |||||
# VLCC | % of fleet | ||||||
20%
15%
10%
5%
0%
% of VLC fleet
12
CAVEAT - TANKER MARKET WILL NEED DEMAND TO GAIN TRACTION POST STOCK BUILD
13
TON MILES - CHANGING LANES
Demand growth all from Far East - but Saudi move sees return of Middle East to US
Super utilisation triangulation
Atlantic Basin - Far East route | Middle East - Asia Pacific route |
1mbpd x 365 days = 365m barrels | 1mbpd x 365 days = 365m barrels |
365m barrels / 2m capacity per VLCC = 183 cargoes | 365m barrels / 2m capacity per VLCC = 182 cargoes |
183 cargoes / 4.5 annual journeys for VLCC Atlantic - F East | 182 cargoes / 9 annual journeys for VLCC MEG - F East |
= 40 VLCCs | = 20 VLCCs |
Middle East - USA route
1mbpd x 365 days = 365m barrels
365m barrels / 2m capacity per VLCC = 182 cargoes 182 cargoes / 6 annual journeys for VLCC MEG - F East
= 30 VLCCs
China
Middle East
West Africa
US/LatAm / Caribs | 22 |
40VLCCs
VLCCs
14
price oil of % as contango VLCCrate
0 | 20,000 | 40,000 | 60,000 | 80,000 | 100,000 | 120,000 | 140,000 |
Q1-2008
Q2-2008
Q3-2008
Q4-2008
Q1-2009
Q2-2009
Q3-2009
Q4-2009
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
Q3-2011
Q4-2011
Q1-2012
Q2-2012
Q3-2012
Q4-2012
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Q1-2018
Q2-2018
Q3-2018
Q4-2018
Q1-2019
Q2-2019
Q3-2019
Q4-2019
Q1-2020
1.0- | 0 | 1.0 | 2.0 | 3.0 | 4.0 | 5.0 | 6.0 |
- CONTANGO AND RATES FREIGHT VLCC CORRELATION CLOSE
15
change yoy inventory rates vlcc
VLCC rates
0 | 20,000 | 40,000 | 60,000 | 80,000 | 100,000 | 120,000 | 140,000 | 160,000 | 180,000 |
Q2-2001
Q4-2001
Q2-2002
Q4-2002
Q2-2003
Q4-2003
Q2-2004
Q4-2004
Q2-2005
Q4-2005
Q2-2006
Q4-2006
Q2-2007
Q4-2007
Q2-2008
Q4-2008
Q2-2009
Q4-2009
Q2-2010
Q4-2010
Q2-2011
Q4-2011
Q2-2012
Q4-2012
Q2-2013
Q4-2013
Q2-2014
Q4-2014
Q2-2015
Q4-2015
Q2-2016
Q4-2016
Q2-2017
Q4-2017
Q2-2018
Q4-2018
Q2-2019
Q4-2019
Q2 2020
300- | 200- | 100- | 0 | 100 | 200 | 300 | 400 | 500 | 600 |
OECD inventory crude m bbl
HISTORICALLY PERFORM RATES TANKER BUILDS INVENTORY DURING
16
CRUDE DEMAND - WHAT HAPPENED IN 2008/9 FINANCIAL CRISIS
17
VLCC AGE AND ORDERBOOK DYNAMICS WILL DRIVE ADJUSTMENT IF RATES FALL
Orderbook as % of fleet
60 | 10.0 | |
50 | 9.5 | |
fleet | ||
40 | 9.0 | global VLCC |
30 | 8.5 | |
age of | ||
20 | 8.0 | Average |
10 | 7.5 | |
0 | 7.0 |
Jan-05Jun-05Nov-05Apr-06Sep-06Feb-07Jul-07Dec-07May-08Oct-08Mar-09Aug-09Jan-10Jun-10Nov-10Apr-11Sep-11Feb-12Jul-12 | Dec-12May-13Oct-13Mar-14Aug-14Jan-15Jun-15Nov-15Apr-16Sep-16Feb-17Jul-17Dec-17May-18Oct-18Mar-19Aug-19Jan-20 | |||||
VLCC Orderbook % Fleet | Average Age VLCC fleet | 18 | ||||
OVER PAST DECADE VLCC FLEET QUICKLY ADJUSTED TO LOWER FREIGHT RATES
VLCC rates
When freight rates low since | ||
2013 seen fleet adjustment | ||
40,000 | 10 | |
35,000 | 9 | |
8 | ||
30,000 | ||
7 | recycled | |
25,000 | 6 | |
VLCCof | ||
4 | ||
20,000 | 5 | |
15,000 | No | |
3 | ||
10,000 | ||
2 | ||
5,000 | 1 | |
0 | 0 |
VLCC leaving fleet | VLCC rates | |
19
...MEANTIME FLEET SUPPLY LOOKS GOOD
CONTRACTING
RISING BARRIERS | ORDER BOOK 23 YR LOW | |
FLEET AGE
AVG AGE RISING (VLCC) | 20 YEAR SURVEY (VLCC) | |
FINANCING
BANKS & CAPITAL
MARKETS
REGULATION
IMO 2030,
BASEL IV
TECHNOLOGY IN FUEL PROPULSION
LONG TERM
CRUDE DEMAND
60 | |||||||||||
50 | |||||||||||
fleet | |||||||||||
% of VLCC | 40 | ||||||||||
30 | |||||||||||
as | |||||||||||
Orderbook | 20 | ||||||||||
10 | |||||||||||
0 | |||||||||||
Q3-1997 | Q4-1999 | Q1-2002 | Q2-2004 | Q3-2006 | Q4-2008 | Q1-2011 | Q2-2013 | Q3-2015 | Q4-2017 | Q1-2020 |
10.0 | 40 | 37 | ||
36 | ||||
35 | ||||
9.5 | ||||
30 | 28 | 28 | ||
9.0 | ||||
25 | 22 | |||
8.5 | 20 | |||
15 | ||||
8.0 | ||||
10 | ||||
7.5 | ||||
5 | ||||
7.0 | 0 |
20
AGE PROFILE WILL DRIVE ADJUSTMENT SHOULD FREIGHT RATES STRUGGLE
50 | 0% | ||||
0 | -5% | ||||
today | end 2020 | end 2021 | end 2022 | ||
-50
VLCCs | -100 |
No of | |
-150
-200
-250
-10%fleetVLCC of%
-106
-15%
-144
-170
-20%
-192
-25%
VLCC >17.5 years old | VLCC to be delivered | VLCC >17.5 years old % of fleet | ||
21
OUTLOOK
WHAT IS CHANGING
Demand for | Supply | Ton miles | Vessel | IMO 2020 |
Oil | of Oil | Supply | ||
Change from Q4
2020 -ve | Saudi/UAE/ | Switch to AG | IMO to help | Flexible |
Russia | ||||
ST Coronavirus | ST Positive | Neutral | No Change | No Change |
22
APPENDIX
A P R I L 2 0 2 0
GLOBAL OIL INVENTORY - BEEN RISING LARGELY SINCE 2015
M bbls global oil inventory
Oil inventory
550
500
450
400
350
300
250
24
PAST INVENTORY BUILDS: ASIAN CRISIS
Sept 97 - May 98
Oil demand fell 0.5m bpd Inventory rose 54 m bbls or 19% Oil price fell $21 to $15 or 29% EURN share price N/A
60,000 | 350 | ||||||
340 | |||||||
50,000 | 330 | ||||||
40,000 | 320 | ||||||
310 | |||||||
30,000 | 300 | ||||||
290 | |||||||
20,000 | 280 | ||||||
10,000 | 270 | ||||||
260 | |||||||
0 | 250 | ||||||
19/09/1997 | 19/10/1997 | 19/11/1997 | 19/12/1997 | 19/01/1998 | 19/02/1998 | 19/03/1998 | 19/04/1998 |
VLCC rates | Crude oil inventory |
25
PAST INVENTORY BUILDS: FINANCIAL CRISIS
Oil demand fell 1.3m bpd Inventory rose 61 m bbls or 20% Oil price $113 to $70 fell 38% EURN share price -38%
Apr 08 - Aug 09
370 | 180,000 | |
160,000 | ||||||||||||
350 | ||||||||||||
140,000 | ||||||||||||
330 | 120,000 | |||||||||||
100,000 | ||||||||||||
310 | ||||||||||||
80,000 | ||||||||||||
290 | 60,000 | |||||||||||
40,000 | ||||||||||||
270 | ||||||||||||
20,000 | ||||||||||||
250 | Jun 08 | Aug 08 | 0 | |||||||||
Apr 08 | May 08 | Jul 08 | Sep 08 | Oct 08 | Nov 08 | Dec 08 | Jan 09 | Feb 09 | Mar 09 | Apr 09 | ||
Crude oil inventory | VLCC rates |
Apr 08 - Aug 09 | ||||||
370 | 60 | |||||
350 | 50 | |||||
330 | 40 | |||||
310 | 30 | |||||
290 | 20 | |||||
270 | 10 | |||||
250 | Jun 08 | Aug 08 | 0 | |||
Apr 08 | Oct 08 | Dec 08 | Feb 09 | Apr 09 | ||
Crude oil inventory | VLCC Storage |
26
PAST INVENTORY BUILDS: OPEC MARKET SHARE
Sept 14 - Apr 15
500 | 80,000 | 500 | ||||||
70,000 | ||||||||
450 | 450 | |||||||
60,000 | ||||||||
400 | 50,000 | 400 | ||||||
40,000 | ||||||||
350 | 30,000 | 350 | ||||||
20,000 | ||||||||
300 | 300 | |||||||
10,000 | ||||||||
250 | 0 | 250 | ||||||
Sep 14 | Oct 14 | Nov 14 | Dec 14 | Jan 15 | Feb 15 | Mar 15 | Apr 15 | Sep 14 |
Global oil inventory | VLCC rates |
Oil demand ROSE 0.7m bpd Inventory rose 130 m bbls or 39% Oil price fell $91 to $59 or 35% EURN Share price +68%
Sept 14 - Apr 15
45
40
35
30
25
20
15
10
5
0
Oct 14 | Nov 14 | Dec 14 | Jan 15 | Feb 15 | Mar 15 | Apr 15 | ||
Global oil inventory | VLCC Storage | |||||||
27
PAST INVENTORY BUILDS: OPEC PRODUCTION CUTS
Oil demand fell 0.6m bpd Inventory rose 88 m bbls or 22% Oil price fell$73 to $58 or 21% EURN share price +10%
Sept 18 - June 19 | Sept 18 - June 19 | ||||||||||||||||||
510 | 60,000 | 510 | 32 | ||||||||||||||||
490 | 50,000 | 490 | 30 | ||||||||||||||||
470 | 470 | ||||||||||||||||||
450 | 40,000 | 450 | 28 | ||||||||||||||||
430 | 30,000 | 430 | 26 | ||||||||||||||||
410 | 20,000 | 410 | 24 | ||||||||||||||||
390 | 390 | ||||||||||||||||||
370 | 10,000 | 370 | 22 | ||||||||||||||||
350 | 0 | 350 | 20 | ||||||||||||||||
Sep 18 | Oct 18 | Nov 18 | Dec 18 | Jan 19 | Feb 19 | Mar 19 | Apr 19 | May 19 | Jun 19 | Sep 18 | Oct 18 | Nov 18 | Dec 18 | Jan 19 | Feb 19 | Mar 19 | Apr 19 | May 19 | Jun 19 |
Global Oil inventory | VLCC rates | Global Oil inventory | VLCC Storage |
28
Attachments
- Original document
- Permalink
Disclaimer
Euronav NV published this content on 09 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 April 2020 10:22:03 UTC
