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Euronav NV — First Quarter Results 2016

ANTWERP, Belgium, April 27, 2016 /PRNewswire/ --

HIGHLIGHTS

  • EBITDA USD 164 million: year-on-year growth in freight rates
  • Tanker fundamentals: demand is robust and growing & vessel supply manageable
  • Almost no vessels ordered in Q1 globally because of restricted access to finance
  • Dividend USD 0.82 per share (ex dividend date 17 May 2016)

Euronav NV ("Euronav" or the "Company") today reported its non-audited financial results for the first quarter 2016.

Paddy Rodgers, CEO of Euronav said: "The strongest first quarter for eight years and a robust start to the second quarter with freight rates higher year-on-year are providing Euronav with a strong platform for further growth. 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. Euronav remains committed to its policy of distributing 80% of net income to shareholders (excluding exceptional items such as gains on the disposal of vessels). We believe that the outlook is positive and sustainable for Euronav and the tanker sector."

The most important key figures (unaudited) are:







in thousands of USD



First quarter 2016


First quarter 2015

Revenue



214,875


204,521

Other operating Income


1,724


2,488







Voyage expenses and commissions


(11,348)


(21,916)

Vessel operating expenses


(38,397)


(36,809)

Charter hire expenses


(6,212)


(9,052)

General and administrative expenses


(10,485)


(10,020)

Net Gain (loss) on disposal of tangible assets


13,821


2,120

EBITDA



163,978


131,332

Depreciation



(53,207)


(49,116)

EBIT (result from operating activities)


110,771


82,216

Net finance expenses


(9,529)


(16,534)

Share of profit (loss) of equity accounted investees


12,438


13,624






Result before taxation


113,680


79,306

Tax Benefit (Expense)


(138)


1,549

Profit (loss) for the period


113,542


80,855







Attributable to:

Owners of the company


113,542


80,855


Non-controlling interests


-


-

The contribution to the result is as follows:








in thousands of USD



First quarter 2016



First quarter 2015

Tankers



104,956



72,772

FSO



8,586



8,083

Result after taxation


113,542



80,855








Information per share:













in USD per share



First quarter 2016



First quarter 2015

Weighted average number of shares (basic) *


158,370,099



148,065,537

EBITDA



1.04



0.89

EBIT (operating result)


0.70



0.56

Result after taxation


0.72



0.55

All figures have been prepared under IFRS as adopted by the EU (International Financial Reporting Standards) and have not been audited nor reviewed by the statutory auditor.

*The number of shares outstanding on 31 March 2016 is 159,208,949.

For the first quarter 2016 the Company had a net result of USD 113.5 million or USD 0.72 per share (first quarter 2015: USD 80.9 million and USD 0.55 per share). EBITDA for the same period was USD 164.0 million (first quarter 2015: USD 131.3 million).

If the Company had continued to apply the proportionate consolidation method for its joint ventures for the first quarter of 2016, the adjusted EBITDA (a non IFRS-measure) would have been USD 185.0 million (first quarter 2015: USD 153.8 million), the adjusted EBIT would have been USD 124.4 million (first quarter 2015: USD 97.4 million) and the profit for the period would have remained the same.

The average daily time charter equivalent rates (TCE, a non IFRS-measure) can be summarized as follows:

In USD per day

First quarter 2016

First quarter 2015

VLCC

Average spot rate (in TI pool)*

60,638

50,845

Average time charter rate**

40,847

44,547

SUEZMAX

Average spot rate*

38,386

41,944

Average time-charter rate**

32,251

41,593

* Excluding technical offhire days ** Including profit share where applicable

EURONAV TANKER FLEET

On 15 January 2016 Euronav sold the VLCC Famenne (2001 – 298,412 dwt), one of its two oldest VLCC vessels, for USD 38.4 million. The vessel was wholly owned by Euronav. The capital gain on that sale of about USD 13.8 million was recorded at delivery on 9 March 2016.

On 26 January and 24 March 2016 Euronav took delivery of the second and third vessels of the four VLCCs which were acquired as resales of existing newbuilding contracts as announced on 16 June 2015: VLCC Alice (2016 - 299,320 dwt) and VLCC Alex (2016 - 299,445 dwt). In May 2016 Euronav is scheduled to take delivery of the fourth and last vessel – the VLCC Anne (2016 – 300,000 dwt). All vessels are fully financed.

CORPORATE

Euronav is fully funded in its current structure and retains a strong conviction that tanker markets are well balanced. The last VLCC to be delivered next month has remaining capex of USD 65.3 million. With the vast majority of its fleet currently on the water, Euronav is ideally positioned to benefit from this positive freight market environment and will remain disciplined as a good steward of shareholder capital.

DIVIDEND

As reported on 17 March 2016, Euronav proposes to pay a final dividend covering the second half of the 2015 financial year of USD 0.82 per share. This dividend will need to be approved at the Annual General Meeting of Shareholders which will be held in Antwerp on 12 May 2016.

SHARE BUY BACK

As reported on 26 January 2016, Euronav has bought back 500,000 shares at an average cost of EUR 9.5256 per share. The Board of Directors remains authorized to buy shares back. The extent to which it does and the timing of these purchases will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations.

TANKER MARKET

The fundamental drivers for the tanker market continue to be positive for the short and medium term. Demand for crude and therefore for its transportation continues to grow. The volatility in the underlying oil price has masked its new affordability within the energy complex. Brent was on average 21% lower during the first quarter of 2016 than the fourth quarter of 2015 (source:Bloomberg). A lower oil price has helped stimulate demand with the IEA now forecasting 1.2 mbpd growth for every year until 2020. We believe that this demand growth should translate into an annual requirement of between 36 and 49 VLCCs.

Therefore, we believe this demand structure is adequate to absorb the increase in vessel supply for the rest of 2016 and 2017(30 net scheduled remaining VLCC deliveries in 2016 and 37 in 2017). Further support for a positive outlook is provided when looking at world fleet age profile and at vessels that will turn 20 years old during that period. Worldwide vessel supply remains manageable in our view. Freight rates in the first quarter of 2016 were higher year-on-year despite the delivery of ten VLCCs (and two Suezmaxes) into the global fleet during the quarter.

During the first quarter only one VLCC and two Suezmax orders were recorded (source:Clarksons) reflecting the emerging barrier to entry of access to capital to the tanker sector. We believe that further vessel supply should remain constrained for the foreseeable future. The consequences of the financial crisis continue to have an impact on bank lending capacity but also on shipyard's ability to sell and produce newbuildings.

In these circumstances, the Company does not intend to place speculative newbuilding orders. Absent of long-term contract for employment with a customer or an equivalent vessel to scrap, increasing the order book and the world fleet cannot make sense for anyone regardless of the price in view of the current market outlook which while promising does not require further supply growth.

We encourage investors to visit our website to access our presentations which are updated regularly at http://investors.euronav.com/.

OUTLOOK

With year-on-year improvement in freight rates the market structure for larger crude tanker remains constructive. The oil...


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