EURONAV ANNOUNCES FINAL YEAR RESULTS
2017
HIGHLIGHTS
- Challenging freight market driven by ship oversupply & OPEC
restrictions
- Medium term drivers for tanker market remain
positive
- Established returns to shareholder policy with minimum USD 0.12
per annum
- Balance sheet strength retained with substantial liquidity to
navigate the cycle
- Proposed merger with Gener8 Maritime creates leading
independent crude tanker company with 75 tankers - scheduled to
close Q2 2018
ANTWERP, Belgium, 21 March 2018 - Euronav NV (NYSE: EURN
& Euronext: EURN) ("Euronav" or the "Company")today
reported its final financial results for the full year to 31
December 2017.
Paddy Rodgers, CEO of Euronav said: "From an operational
perspective, 2017 was a challenging year for Euronav. The
concentrated delivery schedule of new tonnage coupled with
restricted crude supply from extended OPEC production cuts
maintained freight rates at low levels throughout the year. Despite
these headwinds, demand for oil continued to remain robust and
above long-term trend boosted by rising global economic growth and
a supportive oil price structure.
Elsewhere, we were active with the confirmation of a five-year
FSO contract extension and additional two seven-year time charters
(four in total), providing Euronav with additional fixed income
profile; a strength reflected in an upgraded return to shareholders
policy to a minimum fixed annual dividend of USD 0.12 per share.
Our balance sheet was further enhanced with a USD 150 million
unsecured bond offering during May and augmented further with sales
of older tonnage in the fourth quarter.
However, the key challenge for the tanker market remains the
concentration of deliveries of newbuildings in both the VLCC and
Suezmax sectors. If the illness is low freight rates then the cure
is low freight rates as that should drive more ships to be removed
from the active global fleet. Euronav notes an encouraging recent
rise in recycling activity but it needs to be sustained before an
inflection point in the cycle can be reached.
A dynamic year for Euronav culminated in the proposed merger
with Gener8 Maritime. The merger will create the leading
independent large crude tanker operator with 75 crude tankers
representing over 18 million dwt and balance sheet assets of over
USD 4 billion. The combined entity retains Euronav's capital
discipline with leverage of less than 50% and a liquidity position
estimated at more than USD 750 million.
Medium- and longer-term prospects for the tanker market remain
constructive, underpinned by a solid recurring demand for crude,
structural change in financing likely to constrain future vessel
supply growth and a likely acceleration in the retirement of older
ships from 2017 onward encouraged by environmental legislation on
ballast water treatment and particularly from sulfur emissions in
2020.
The duration of the current challenging freight rate environment
will be entirely dependent on the number of additional removals of
older ships that are not needed by the market and the number of
newbuildings added to the current order book. Until this inflection
point is reached, Euronav retains substantial balance sheet
capacity and fixed income visibility to navigate through such a
period of lower freight rates and/or to take advantage of expansion
opportunities."
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The most important key figures are: |
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(in
thousands of USD) |
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Fourth Quarter 2017 |
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Fourth Quarter 2016 |
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Full
Year 2017 |
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Full
Year 2016 |
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Revenue |
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117,978 |
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146,280 |
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513,368 |
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684,265 |
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Other
operating income |
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1,020 |
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1,463 |
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4,902 |
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6,996 |
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Voyage
expenses and commissions |
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(14,257) |
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(16,480) |
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(62,035) |
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(59,560) |
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Vessel
operating expenses |
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(33,952) |
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(37,361) |
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(150,427) |
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(160,199) |
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Charter
hire expenses |
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(7,844) |
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(2,920) |
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(31,173) |
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(17,713) |
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General
and administrative expenses |
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(13,736) |
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(11,418) |
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(46,868) |
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(44,051) |
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Net gain
(loss) on disposal of tangible assets |
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36,518 |
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36,576 |
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15,511 |
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50,395 |
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Net gain
(loss) on disposal of investments in equity accounted
investees |
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(24,150) |
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Depreciation |
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(56,427) |
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(59,180) |
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(229,872) |
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(227,763) |
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Net
finance expenses |
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(12,059) |
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(16,086) |
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(43,463) |
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(44,840) |
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Share of profit (loss) of equity accounted investees |
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2,053 |
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8,938 |
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30,082 |
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40,495 |
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Result before taxation |
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19,294 |
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49,812 |
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25 |
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203,875 |
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Tax benefit (expense) |
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61 |
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475 |
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1,358 |
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174 |
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Profit (loss) for the period |
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19,355 |
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50,287 |
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1,383 |
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204,049 |
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Attributable to: Owners of the company |
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19,355 |
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50,287 |
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1,383 |
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204,049 |
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The
contribution to the result is as follows: |
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(in
thousands of USD) |
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Fourth Quarter 2017 |
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Fourth Quarter 2016 |
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Full
Year 2017 |
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Full
Year 2016 |
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Tankers |
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17,499 |
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41,920 |
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(28,485) |
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169,614 |
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FSO |
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1,856 |
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8,367 |
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29,868 |
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34,435 |
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Result after taxation |
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19,355 |
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50,287 |
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1,383 |
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204,049 |
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Information per share: |
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(in USD
per share) |
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Fourth Quarter 2017 |
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Fourth Quarter 2016 |
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Full
Year 2017 |
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Full
Year 2016 |
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Weighted
average number of shares (basic) * |
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158,166,534 |
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158,166,534 |
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158,166,534 |
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158,262,268 |
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Result
after taxation |
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0.12 |
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0.32 |
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0.01 |
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1.29 |
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* The number of shares issued on 31 December 2017 is
159,208,949. |
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EBITDA reconciliation (unaudited): |
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(in
thousands of USD) |
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Fourth Quarter 2017 |
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Fourth Quarter 2016 |
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Full
Year 2017 |
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Full
Year 2016 |
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Profit
(loss) for the period |
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19,355 |
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50,287 |
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1,383 |
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204,049 |
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+
Depreciation |
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56,427 |
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59,180 |
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229,872 |
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227,763 |
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+ Net
finance expenses |
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12,059 |
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16,086 |
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43,463 |
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44,840 |
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+ Tax
expense (benefit) |
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(61) |
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(475) |
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(1,358) |
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(174) |
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EBITDA |
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87,780 |
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125,078 |
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273,360 |
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476,478 |
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+
Depreciation equity accounted investees |
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4,555 |
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4,776 |
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18,071 |
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23,774 |
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+ Net
finance expenses equity accounted investees |
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(14) |
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521 |
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829 |
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3,212 |
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+ Tax
expense (benefit) equity accounted investees |
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3,365 |
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99 |
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1,488 |
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215 |
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Proportionate EBITDA |
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95,686 |
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130,474 |
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293,748 |
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503,679 |
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Proportionate EBITDA per share: |
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(in USD
per share) |
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Fourth Quarter 2017 |
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Fourth Quarter 2016 |
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Full
Year 2017 |
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Full
Year 2016 |
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Weighted
average number of shares (basic) |
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158,166,534 |
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158,166,534 |
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158,166,534 |
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158,262,268 |
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Proportionate EBITDA |
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0.60 |
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0.82 |
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1.86 |
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3.18 |
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All figures have been prepared under IFRS as adopted by the EU
(International Financial Reporting Standards). |
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Procedures of the independent auditor:
The statutory auditor, KPMG Bedrijfsrevisoren - Réviseurs
d'Entreprises, represented by Götwin Jackers, has confirmed that
the audit procedures, which have been substantially completed, have
not revealed any material misstatement in the accounting
information included in the Company's annual announcement.
PROPOSED MERGER BETWEEN EURONAV AND GENER8 MARITIME
On 21 December 2017 the boards of Euronav and Gener8 Maritime
announced agreement on a stock-for-stock merger for the entire
issued and outstanding share capital of Gener8 pursuant to which
Gener8 would become a wholly-owned subsidiary of Euronav (the
"Combined Entity"). The merger will create the leading independent
large crude tanker operator with 75 crude tankers, of which 44
VLCCs and 28 Suezmax crude tankers representing over 18 million dwt
in the aggregate.
The Combined Entity balance sheet assets of over USD 4 billion
will have marked-to-market leverage of less than 50% and a
liquidity position estimated at more than USD 750 million,
including cash on hand and undrawn amounts available under existing
credit facilities.
Work on the transaction is proceeding as planned with an
anticipated closing in the second quarter of 2018. Full details on
the proposed transaction can be found on our website:
www.euronav.com.
2017 Dividend
A full year gross dividend of USD 0.12 per share has been
recommended by management and proposed by the Board of Directors
for approval at the AGM on 9 May 2018. Taking into account the
interim dividend paid as of 5 October 2017, and subject to
shareholders' approval, a final dividend of USD 0.06 per
share will be paid after the Annual General Meeting of
Shareholders.
In August 2017 we announced an upgraded new
return to shareholders policy. Going forward Euronav intends to (1)
pay a fixed minimum dividend of USD 0.12 per share every year
(equivalent of USD 0.06 for each half year) and; (2) if the results
per share are positive and exceed the amount of the fixed dividend,
that additional income, as adjusted for exceptional gains
(excluded) and losses (included), will be allocated to additional
dividends, debt repayment or buying back shares or, of
course, accretive vessel or fleet acquisitions, as the Board at
that time deems most valuable for the shareholders in the long
term.
Highlights 2017
January
On January 12 and 20, 2017 Euronav took delivery
of two VLCCs (acquired as resales of contract), the Ardeche (2017 -
298,642 dwt) and the Aquitaine (2017 - 298,767 dwt), from Hyundai
Heavy Industries - Samho yard, South Korea.
April
On April 20, 2017 Euronav signed an additional
two long-term time charter contracts of seven years each with
Valero Energy, Inc. for Suezmax vessels with specialized Ice Class
1C capability starting in late 2018. This brings to four the number
of long-term (seven years) Suezmax time charter contracts the
Company has within its portfolio. In order to fulfil these
contracts, Euronav ordered an additional two high specification Ice
Class Suezmax vessels from Hyundai Heavy Industries shipyard in
South Korea.
On April 25, 2017, Euronav signed a 12-year USD
110 million Export Credit Agency (ECA) financing with commercial
banks and Ksure for the financing of the two VLCC newbuildings the
Aquitaine (2017 - 298,767 dwt) and the Ardeche (2017 - 298,642 dwt)
the Company took delivery of in January.
May
On May 11, 2017 the General Meeting of
Shareholders approved the annual accounts for the year ended
December 31, 2016, as well as a gross dividend of USD 0.22 per
share.
On May 14, 2017 Euronav and its joint venture
partner, International Seaways, signed a contract for five years
for the FSO Africa (2002 - 442,000 dwt) and FSO Asia (2002 -
442,000 dwt) in direct continuation of the current contractual
service. The contract was signed with North Oil Company, the new
operator of the Al Shaheen oil field, whose shareholders are Qatar
Petroleum Oil & Gas Limited and Total E&P Golfe
Limited.
On May 16, 2017 Euronav Luxembourg SA, a
wholly owned subsidiary of the Euronav group, announced the
successful launch of a USD 150 million unsecured bond with a coupon
of 7.50% and maturity in May 2022. This was Euronav's first entry
into the debt capital markets.
June
On June 1, 2017 Euronav announced the sale of
the VLCC TI Topaz (2002 - 319,430 dwt) for USD 21 million recording
a loss of USD 21 million. The TI Topaz joined the Euronav fleet in
the first quarter of 2005 and contributed positively over the years
to the results of Euronav, especially during strong freight rate
years such as 2005, 2006, 2008, 2010, 2015 and 2016.
In June, 2017 the Company started a treasury
note program (Commercial Paper) and placed approximately EUR 50
million in the market for various short-term maturities at a
pricing of 60 bps over Euribor. This was not additional debt but
rather an opportunity to decrease the cost of borrowing by
systematically using the proceeds to repay part of the Company's
revolving loan facilities.
August
On August 23, 2017, Euronav received a
transparency notification, dated August 22, 2017, pursuant to which
M&G Investment Management Limited, following the acquisition of
voting securities or voting rights on August 21, 2017 held 5.04% of
the voting rights in the Company and thus crossed the 5%
threshold.
September
On September 8, 2017 the Global Maritime Forum
of which Euronav is a founding partner was launched. The Global
Maritime Forum is a global platform for high-level leaders from the
entire maritime spectrum and aims to effect positive long-term
change for the industry and for society.
October
Euronav paid an interim dividend of USD 0.06 per
share for the first half of 2017. This was the first payment under
the new dividend policy as announced on August 10, 2017. The
dividend was payable as from October 5, 2017.
On October 23, 2017 the USD 150 million senior
unsecured bonds issued by Euronav Luxembourg SA and guaranteed by
Euronav NV were admitted to listing on the Oslo Stock Exchange.
November
On November 8, 2017 the Company received a
transparency notification from Châteauban SA, a holding company
part of the CLdN-Cobelfret group whose main activities are in bulk
shipments, ro-ro shipments and port companies. Following the
acquisition of voting securities or voting rights on November 7,
2017, Châteauban SA held 5.15% of the voting rights in the Company
and thus crossed the 5% threshold.
On November 10, 2017 Euronav sold the VLCC
Flandre (2004 - 305,688 dwt) for USD 45 million to a global
supplier and operator of offshore floating platforms. A gain
of USD 20 million on the sale was recorded. The vessel was
delivered in December 2017 for conversion into an FPSO by her new
owner and would therefore leave the worldwide VLCC trading
fleet.
On November 16, 2017 the Suezmax Cap Georges
(1998 - 146,652 dwt) was sold to its new owners. The vessel was
sold for USD 9 million and was delivered on November 29, 2017. The
Company recorded a gain of USD 9 million. The sale of the Cap
Georges came in anticipation of the delivery of the first of four
Suezmax vessels early in 2018 currently under construction at the
Hyundai yard in South Korea (HHI). Those vessels are part of a
seven-year contract for four vessels with a leading global refinery
player.
On November 17, 2017 Euronav sold the VLCC
Artois (2001 - 298,330 dwt) for USD 22 million. The Artois was the
oldest vessel in the Company's VLCC fleet. The Company recorded a
gain of USD 8 million on the sale. The vessel was delivered to its
new owners in early December.
December
On December 21, 2017 Euronav and Gener8
Maritime, Inc. (NYSE: GNRT) ("Gener8")announced that they reached
an agreement on a stock-for-stock merger for the entire issued and
outstanding share capital of Gener8 pursuant to which Gener8 would
become a wholly-owned subsidiary of Euronav.
Events occurred after the end of the
financial year ending 31 December 2017
On January 23, 2018 Euronav was included in the
Bloomberg Gender-Equality Index ("GEI"). The reference index
measures gender equality across internal company statistics,
employee policies, external community support and engagement, and
gender-conscious product offerings. Euronav is the first Belgian HQ
Company and only transportation or shipping company in the
index.
On February 1, 2018 the Company received a
transparency notification from Châteauban SA, a holding company
part of the CLdN-Cobelfret group whose main activities are in bulk
shipments, ro-ro shipments and port companies. Following the
acquisition of voting securities or voting rights on January 31,
2018, Châteauban SA held 10% of the voting rights in the
Company.
Financial calendar 2018
Tuesday 3 April 2018 (or before)Annual
report 2017 available on website
Wednesday 25 April 2018Announcement of
first quarter results 2018
Wednesday 9 May 2018Annual General
Meeting of Shareholders 2018
Thursday 9 August 2018Announcement of
final half year results 2018
Thursday 16 August 2018Half year report
2018 available on website
Tuesday 30 October 2018Announcement of
third quarter results 2018
Thursday 24 January 2019Announcement of
fourth quarter results 2018
The Board of Directors, represented by Carl
Steen, its Chairman, and the Executive Committee, represented by
Paddy Rodgers, Chief Executive Officer, and Hugo De Stoop, Chief
Financial Officer, hereby confirm, in the name and for account of
Euronav that, to the best of their knowledge the consolidated
financial statements as of and for the year ended 31 December 2017
presented herein were established in accordance with applicable
accounting standards (IFRS as adopted by the EU) and give a true
and fair view, as defined by these standards, of the assets,
liabilities, financial position and results of Euronav NV.
On behalf of the Board of Directors:
Paddy
Rodgers
Carl SteenChief Executive
Officer
Chairman of the Board of Directors
Forward-Looking Statements
Matters discussed in this press release may constitute
forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements 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. The Company desires to take
advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The
words "believe", "anticipate", "intends", "estimate", "forecast",
"project", "plan", "potential", "may", "should", "expect",
"pending" and similar expressions identify forward-looking
statements.
The forward-looking statements in this press release are based
upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, our management's
examination of historical operating trends, data contained in our
records and other data available from third parties. Although we
believe that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible
to predict and are beyond our control, we cannot assure you that we
will achieve or accomplish these expectations, beliefs or
projections.
In addition to these important factors, other 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 contracts with us,
the strength of world economies and currencies, general market
conditions, including fluctuations in charter rates and vessel
values, changes in demand for tanker vessel capacity, changes in
our operating expenses, including bunker prices, dry-docking and
insurance costs, the market for our vessels, availability of
financing and refinancing, charter counterparty performance,
ability to obtain financing and comply with covenants in such
financing arrangements, changes in governmental rules and
regulations or actions taken by regulatory authorities, potential
liability from pending or future litigation, general domestic and
international political conditions, potential disruption of
shipping routes due to accidents or political events, vessels
breakdowns and instances of off-hires and other factors. Please see
our filings with the United States Securities and Exchange
Commission for a more complete discussion of these and other risks
and uncertainties.
** *
Contact:
Mr. Brian Gallagher - Euronav Investor RelationsTel: +44 20
7870 0436Email: IR@euronav.com
Annual report 2017 available on website:
Tuesday, 3 April 2018
About EuronavEuronav is an independent tanker company
engaged in the ocean transportation and storage of crude oil. The
Company is headquartered in Antwerp, Belgium, and has offices
throughout Europe and Asia. Euronav is listed on Euronext Brussels
and on the NYSE under the symbol EURN. Euronav employs its fleet
both on the spot and period market. VLCCs on the spot market are
traded in the Tankers International pool of which Euronav is one of
the major partners. Euronav's owned and operated fleet consists of
53 double hulled vessels being 1 V-Plus vessel, 28 VLCCs, 18
Suezmaxes, four Suezmaxes under construction and two FSO vessels
(both owned in 50%-50% joint venture). The Company's vessels mainly
fly Belgian, Greek, French and Marshall Island flags.
Regulated information within the meaning of the Royal Decree of
14 November 2007.
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