Robust tanker demand has propelled Euronav’s financial results for the first quarter of 2016 to a net profit of USD 113.5 million against USD 80.8 million recorded in the same period last year.
According to Paddy Rodgers, CEO of Euronav, this was the strongest first quarter for eight years and a robust start to the second quarter with freight rates higher year-on-year.
“Demand continues to expand stimulated by a “lower for longer” oil price. The current vessel supply outlook is manageable consistent with our thesis that restricted access to finance is emerging as a barrier to entry, evidenced by virtually no new large tanker orders during the first quarter,” he said.
Antwerp-based tanker company repeated its commitment to distributing 80% of net income to shareholders, adding that the company believes that the outlook is positive and sustainable for Euronav and the tanker sector.
The argument is built on the fact that the oil price continues to stimulate demand to levels which should enable the increase in vessel supply to be adequately absorbed going forward. This is coupled with elevated levels of oil production which are likely to remain above demand even with an agreed output freeze, the company said.
Finally, Euronav expects that low ordering of VLCC and Suezmax should prevent an oversupply of tonnage in the years to come.
So far in the second quarter of 2016 the Euronav VLCC fleet operated in the Tankers International Pool has earned about USD 59,342 per day and 43% of the available days have been fixed. Euronav’s Suezmaxes trading on the spot market have earned about USD 32,595 per day on average with 41.5% of the available days fixed for the second quarter of 2016.
During the quarter, Euronav took delivery of the second and third vessels of the four VLCCs which were acquired as resales of existing newbuilding contracts- the VLCC Alice and VLCC Alex. In May 2016 Euronav is scheduled to take delivery of the fourth and last vessel – the VLCC Anne.