EARNINGS CALL Q4 2020
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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
- Q4 2020 HIGHLIGHTS
- FINANCIAL REVIEW
- CURRENT THEMES
- Q&A
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HIGHLIGHTS Q4 2020
- Sustained pressure freight rates during quarter
- Mix of reduced demand, OPEC cuts & too many vessels
- FSO extension to current contracts for further 10 years to 2032
- Fixed cash dividend of USD 3 cents p/share in line with distribution policy
- Additional USD 50 million share repurchase programme
- Outlook
- Q1 so far VLCC 46% fixed at around 16.4k USD per day
- Q1 so far Suezmax 54% fixed at around 9.2k USD per day
In USD per day | Q4 2020 | Q4 2019 |
VLCC | ||
Average spot rate (in TI pool)* | 20,500 | 61,700 |
Average time charter rate** | 44,700 | 35,700 |
SUEZMAX | ||
Average spot rate*** | 12,500 | 41,500 |
Average time charter rate** | 29,500 | 29,300 |
- Euronav owned ships in TI Pool
- Including profit share where applicable
- Excluding technical offhire days
70000 | VLCC | |||||||
60000 | ||||||||
Q4 | ||||||||
50000 | 19 | |||||||
USD/day | 40000 | |||||||
30000 | ||||||||
P&L | ||||||||
20000 | ||||||||
10000 | B/E | Q4 | ||||||
20 | ||||||||
0 | ||||||||
Suezmax
45000 | ||||||||
40000 | ||||||||
Q4 | ||||||||
35000 | ||||||||
19 | ||||||||
30000 | ||||||||
USD/day | 25000 | |||||||
P&L | ||||||||
20000 | ||||||||
15000 | B/E | |||||||
10000 | ||||||||
Q4 | ||||||||
5000 | ||||||||
20 | ||||||||
0 | ||||||||
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CAPITAL ALLOCATION
CONTINUES TO BE DYNAMIC ON ALL FRONTS
Going forward 2020 Delivery
Balance sheet | Cash | Buy Backs | Fleet | |||||
strength | Dividends | Equity & Bonds | Growth/Renewal | |||||
Low leverage & | Strong freight | Recycle capital via | ||||||
repayment | market = cash | $119.5m | ship sales & | |||||
schedule leaves | dividends of | returned FY20 | acquisition | |||||
leverage intact | $1.69 per share | maintaining | ||||||
fleet age | ||||||||
of | ||||||||
part | logistical chain | |||||||
Leverage | Min. 12c/year | $50m | in | Growth via 2x | ||||
crude oil supply | ||||||||
@50% target | cash dividend & | deployment into | eco-Suezmax + | |||||
permits $700m | commitment to | Euronav shares | capacity for | |||||
deployment | return 80% net | from balance | disciplined growth | |||||
potential | income remains | sheet | ||||||
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FINANCIAL HIGHLIGHTS - INCOME
KEY KPI's Q4
• Revenues : 138 M$
• EBITDA : 36 M$
• Net income : -58,7 M$
CASH BREAKEVEN
• VLCC : 18 k $/day
• Suezmax : 16 k $/day
DRY DOCKING FOCUS
27 dry dockings scheduled in during this winter season
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FINANCIAL HIGHLIGHTS
CASHFLOW & BALANCE SHEET
HIGHLIGHTS
1. Cashflow robust
Tough freight market but positive quarterly cash flow
2. Leverage
37.3% leverage to book value
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Euronav Clarksons, Source:
$m VLCC build New
VLCC build new as valuation EURN Implied
$m value of newbuild VLCC
65 | 70 | 75 | 80 | 85 | 90 | 95 | TERMLONGERFORBACKBUYSHARE CREATIONVALUE | |||
Jan-17 | backsBuy | +backsbuyvia$146mreturnedhasEuronav2018Since | ||||||||
Feb-17 | ||||||||||
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Apr-20 | $50m | |||||||||
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Jan-21 | ||||||||||
CONDUCIVE CONDITIONS FOR RECYCLING
WHICH ARE ALSO INTENSIFYING
Older tonnage values & freight rate outlook supportive of recycling…
Recycle value
VLCC >$18m
1 year TC rate < $25,000
VLCC | 1 year | VLCC* recycled | |
Recycle $m | TC rate | over next12 months | |
2010 | 18.6 | 19,800 | 20 |
2017 | 15.8 | 27,100 | 20 |
2018 | 18.2 | 22,900 | 42 |
…with catalyst of 62 VLCCs requiring
special surveys during 2021
20
18
16
6 | |||||||||||||
14 | 6 | ||||||||||||
12 | |||||||||||||
8 | |||||||||||||
10 | 4 | ||||||||||||
8 | 8 | ||||||||||||
8 | |||||||||||||
6 | 5 | ||||||||||||
4 | 5 | ||||||||||||
2 | 3 | 4 | 3 | ||||||||||
2 | |||||||||||||
0 | |||||||||||||
Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | ||||||||||
22.5 year survey | 20 year survey | 17.5 year survey | |||||||||||
Source: Clarksons | * VLCC equivalents including Suezmax |
CRUDE DEMAND RECOVERY TRAJECTORY INCREASING DEFERRED - NOW 2022
IEA global oil demand forecast - recovery deferred and current trajectory
for Q3 2022 before recover to 2019 peak levels of consumption
IEA global oil demand forecast m bpd
105
100,9
100
95
90
85
80
Q2 19 | Q3 19 | Q4 19 | Q1 20 | Q2 20 | Q3 20 | Q4 20 | Q1 21 | Q2 21 | Q3 21 | Q4 21 | Q1 22 | Q2 22 | Q3 22 | Q4 22 |
Jul 20 forecast | Jan 21 forecast | |||||||||||||
Source: IEA, EIA
OUTLOOK
TANKER MARKET AWAITING RECOVERY
Change from Q3 20
Demand for | Supply | Ton miles | Vessel Supply | Euronav |
Oil | of Oil | Balance sheet | ||
2nd wave restrictions | OPEC+ & Saudi | China ton miles | Fleet Age & | Leverage 37% |
lowering demand | driving | growing up but | Orderbook to fleet | + ADDITIONAL |
but vaccine to get | supply cuts but oil | OPEC production | ratios at | buyback |
traction | >$40/50 adds bbls | cuts biting | 20 year high/lows |
No Change | No Change | Downgrade | No Change | No Change |
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Q&A
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Euronav NV published this content on 04 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 February 2021 08:07:06 UTC.