Belgian tanker shipping company Euronav ended the first quarter of 2019 with a net gain of USD 19.5 million, compared to a net loss of USD 39.1 million seen in the corresponding period a year earlier.
EBITDA for Q1 2019 was USD 124 million, compared to USD 25.7 million recorded in Q1 2018.
“There are positive signals from the tanker market at present. Firstly, Euronav delivered VLCC rates of USD 35,000 per day (same as Q4) despite 1.2m bpd OPEC cuts and 28 new VLCC equivalents entering the global fleet during Q1,” Hugo De Stoop, current CFO and future CEO of Euronav, commented.
“Secondly, US crude exports are running around 30% higher year on year. Thirdly, asset prices which historically have been a key valuation indicator for investors, continue to rise in both new build and secondhand values,” he added.
During the quarter, Euronav delivered the Suezmax vessel Felicity to a supplier and operator of offshore floating platforms. The ship will be converted into an FPSO.
In addition, the company entered in Q1 2019 into a sale agreement regarding the LR1 Genmar Compatriot. Sold for USD 6.75 million, the vessel will be delivered to its new owners in the course of May 2019.
As part of its capital allocation strategy, Euronav has the option of buying its own shares back. The company started buying back shares on Euronext Brussels opportunistically in December 2018. As of the end of March 2019, Euronav retained around USD 785 million of liquidity.
In February 2019, Euronav’s CEO Paddy Rodgers announced his decision to step down from his role this year. The CFO Hugo De Stoop was selected to succeed Rodgers, effective from May 9, 2019. The company has now started a search for a new CFO.
With regards to the outlook for the remainder of the year, Euronav said that the resilience of freight rates during Q1 is “an encouraging signal”. However, some seasonal freight rate weakness during the spring/summer period is expected.
“Refinery maintenance programs are more detailed and more prolonged this year than previous years and are likely to bring seasonal freight rate pressure forward to the second quarter,” Stoop explained.
“However, with increased cargo supply expected in the second half along with reduced tanker capacity from IMO induced retrofitting and potentially more Iranian vessels leaving the trading fleet, the outlook for the second half is encouraging,” he concluded.
Based in Antwerp, Euronav currently owns and operates a fleet of 2 ULCCs, 43 VLCCs, 25 Suezmaxes and 2 FSO vessels — both owned in 50%-50% joint venture.