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Euronav’s Results Propelled by Improved Tanker Marker Conditions

Euronav NV reported its non-audited financial results today for the fourth quarter ended 31 December 2022.

Hugo De Stoop, CEO of Euronav said: “Constrained vessel supply conditions within all segments of the large crude tanker market were supplemented further by two key factors during Q4 2022. Firstly, seasonal demand for crude gained traction as consumption rose into the 22/23 winter. Secondly, the EU embargo on Russian oil, effective 5 December 2022, created additional shipping demand as crude trading patterns required longer voyages and therefore captured more shipping capacity. These supportive catalysts helped drive freight rates to a 30-month high and we believe that the solid base of sector fundamentals (orderbook, fleet age, incoming regulations) will continue to underpin positive conditions within the tanker market for multiple quarters ahead.

Recent events have also been dynamic but have never affected the operational performance of the Company as we remain focused and committed to maintain our position of market leadership and have managed to rejuvenate the fleet at a critical time in the market cycle both in buying and ordering modern vessels at good prices as well as be patient and dispose of older assets when the value became interesting.

Whilst we regret the current situation, we will continue to act professionally and to work to a solution which is in the interests of all of our shareholders and stakeholders.”

For the fourth quarter of 2022, the Company realized a net profit of USD 234.7 million or USD 1.16 per share (fourth quarter 2021: a net loss of 72.2 USD million or USD (0.36) per share). Proportionate EBITDA (a non-IFRS measure) for the same period was USD 317.7 million (fourth quarter 2021: USD 38.8 million).


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


Fleet rejuvenation

Sale of older Suezmax vessels

On 19 October 2022, Euronav announced the sale of the Cap Phillippe (2006 – 158,920 dwt) generating a capital gain of USD 12.9 million.

On 10 November 2022 Euronav sold the Suezmax Cap Guillaume (2006 – 158,889 dwt), generating a capital gain of USD 14.6 million.

Sale ULCC Europe

On 17 October 2022, Euronav announced the sale of the ULCC (Ultra Large Crude Carrier)

Europe (2002 – 441,561 dwt). The sale generated a capital gain of USD 34.7 million.

Two new Eco-Suezmax contracted at Korean yard

Euronav has entered into an agreement with Daehan Shipbuilding Co. Ltd. for two Suezmax newbuilding contracts. The vessels will be sister ships to our Cedar (2022 -157,310 dwt) and Cypress (2022 – 157,310 dwt), built at the same yard. Both vessels are scheduled for delivery in the third quarter of 2024.

Capital gains on vessels sales during 2022

Euronav has deliberately accelerated fleet renewal during 2022 given prevailing elevated asset prices for older tonnage. Recycling such capital into newer, younger tonnage provides a more competitive platform for all stakeholders and a far lower environmental footprint.

Update – Newbuilding delivery schedule

Outstanding capital expenditure for the 8 vessels (3 VLCCs and 5 Suezmax) currently under construction at the end of Q4 2022 was USD 404 million, split as follows: USD 267 million in 2023 and USD 137 million in 2024.

On 10 January 2023, Euronav held a naming ceremony for two of our 3 VLCC newbuildings. The vessels are the Cassius and Camus. Euronav took delivery of the VLCC Cassius (2023

– 299,158 dwt) on 11 January 2023 and will take delivery of the Camus (2023- 299.158) early March 2023.


The comments made during Q3 2022 remain valid. The large crude tanker market is well positioned to continue a multi-year upcycle based on strong fundamentals and well supported tanker market specific catalysts:

•Orderbooks at 25 years plus lows
•Contracting constrained by high vessel prices & incoming regulations
•Shipbuilding capacity constrained until 2025/26 by LNG carrier and container orderbook
•Global fleet age average of VLCC & Suezmax segments – highest in 20 years
•Structural ton mile enhancement from Russian dislocation

Asset Value

The pace of asset price growth for crude tankers eased during Q4 2022 but remains very strong especially for older vessels. Newbuilding prices for VLCCs remain stable at USD 120 million but 5,10- and 15-year-old segments for VLCCs rose 8%, 8% and 14% respectively during Q4 2022.

Crude oil demand

China remains key! Chinese crude imports for 2022 were 7% below 2020 levels (source Bloomberg). The energy consultancy FGE forecast a snapback in Chinese oil demand post the Lunar new year and reflective of Covid restrictions being lifted on January 8th, 2023. This recovery will be a key driver supported by recent IEA reports which forecasts global

oil consumption will rise to a record 101.7 million barrels per day – a rise of 1.9 million barrels per day during 2023 and back above pre-pandemic levels for the first time.

Vessel Supply

New incoming regulations (EEXI) and further pressure on vessel supply imply a supportive tanker market background. But given owner confidence in the cycle, it is not surprising that only 1x VLCC and 1x Suezmax left the global fleet in Q4 2022 (4 VLCC & 7 Suezmax during 2022; source Clarksons). However, it remains encouraging that higher new build prices, restricted shipyard availability and uncertainty over application of new emissions technology all coalesced to severely restrict new contracting to just two VLCCs during all of 2022 and no orders during Q4.

Volatile freight rates

Suezmax markets have remained consistent and buoyant, underpinned by increasing ton miles and robust demand for Q4 and most of Q1 so far.

VLCC freight rates did slip from mid-November. US to China volumes fell due to Covid outbreaks, reducing activity and oil price differentials impacting China-WTI spreads. January activity saw a rising demand from China post lifting of Covid restrictions and until the Chinese Lunar new year.

Previous cycles have shown that the time charter market will develop further in favour of tanker owners on duration, term and economics if the spot market remains at healthy levels on average. This feature will take several quarters to mature but will provide optionality and opportunity for owners as the cycle unwinds.

Sequential quarter on quarter improvement in freight rates may be challenging given the in-built seasonality hard wired into crude tanker markets. Regular observers will recognise that seasonal factors tend to reduce cargo volumes during Q2 and Q3 (owing to refinery maintenance programmes, lower energy consumption during northern hemisphere spring, inventory planning etc).

So far in the first quarter of 2023, the Euronav VLCC fleet in the Tankers International Pool earned ~ USD 55,000 per day and 50% of the available days have been fixed. Euronav’s Suezmax fleet trading on the spot market has earned ~ USD 54,000 per day on average with 50% of the available days fixed.


The return to profitability in the second half of 2022 should allow Euronav to reward all its shareholders. 80% of annual net income after adjusting for capital gains (which are not available for distribution) implies a return to shareholders of more than USD 87 million or USD 43 cents per share for the full year of which USD 9 cents have been distributed in previous quarters (Q1, Q2 and Q3).

However, under the Combination Agreement (as defined below) Euronav and Frontline plc agreed a maximum of dividend payments that could be made (Euronav USD 9 cents per share total, Frontline USD 15 cents per share total) until the settlement of the exchange offer. So far, Euronav already distributed USD 6 cents out of the USD 9 cents available. As we continue to comply with our obligations under the Combination Agreement , which could not be lawfully terminated by Frontline, only USD 3 cents can be distributed today.

Euronav takes this opportunity to remind investors that in our two most recent distributions above our minimum fixed dividend in 2020, the company divided the distribution between cash dividends and share buy backs as our equity price was trading substantially below its intrinsic value. Euronav reserves the right to return capital to shareholders in the future in the form of dividends or share buybacks depending on where the share price is trading in relation to its intrinsic value.

Euronav maintains its stated policy of distributing a minimum fixed dividend of USD 3 cents per share per quarter.

A dividend of USD 3 cents per share will thus be paid to shareholders on 2 March 2023.


In November 2022, Euronav agreed a new USD 377 million sustainability-linked loan facility, which brings Euronav’s funding with an integrated sustainability component to 52% of the Company’s total financing. The facility has been concluded with several commercial banks and has a duration of 5 years.

This is the fourth sustainability linked financing Euronav has undertaken in the last 2 years. The credit facility incorporates a number of KPI’s which, if met, will reduce Euronav’s interest rate cost by 10 basis points.

In December 2022, for the third year running Euronav has been awarded a “B” rating by CDP for our positive awareness and actions on climate change. CDP is a non-profit organisation and a highly regarded form of accreditation on climate action. Each year the stipulations and hurdle requirements become more onerous meaning Euronav’s position has improved year on year.

In January 2023, Euronav was included in the Bloomberg Gender-Equality Index (GEI) for the sixth year, since the Index was established in 2018. For 2023, our score sequentially improved from 2022. Euronav remains committed to such initiatives and looks forward to continuously improving its ranking year after year.


Combination with Frontline

On 11 July 2022 we announced that Euronav and Frontline entered into a definitive agreement for a stock-for-stock combination based on an exchange ratio of 1.45 Frontline shares for every Euronav share (the “Combination Agreement”), which was unanimously approved by all the members of Frontline’s Board of Directors and by all members of Euronav’s Supervisory Board.

On 9 January 2023 Frontline announced that it had unilaterally decided to terminate the Combination Agreement. Euronav determined that unilateral action pursuing the termination of the Combination Agreement has no basis under the terms of the Combination Agreement and that Frontline failed to provide a satisfactory reason for its decision to pursue termination.

On 18 January 2023, Euronav announced that it filed an application request for urgent interim and conservatory measures in relation to Frontline’s unilateral action in pursuing the termination of the Combination Agreement. Euronav is requesting to suspend such termination pending a determination on the merits pursuing primarily the specific performance of the Combination Agreement.

On 30 January 2023 Euronav announced that it has filed an application request for arbitration on the merits in relation to Frontline’s unilateral action in pursuing the termination of the Combination Agreement.

A judgement in the pending emergency arbitration proceedings is expected on 7 February 2023.

In the meantime, Famatown Finance Limited, a related-party to Frontline’s largest shareholder has continued to accumulate shares of Euronav. The total of these transactions means that Famatown (together with Frontline), hold 50,426,748 shares in Euronav, or 24.99% of the shares outstanding (excluding treasury shares). The Supervisory Board of Euronav has reached out pro-actively to Famatown to understand its intentions and intends to maintain a constructive dialogue, as it pursues with all Euronav shareholders and stakeholders.

CMB and affiliates

CMB NV and its affiliates (“CMB”) jointly own 25% of the voting shares of Euronav (excluding treasury shares).

On 16 January 2023, Euronav received a letter from CMB requesting that the Supervisory Board convene a general meeting of Euronav with the agenda items and proposed decisions attached to the letter which is available on Euronav’s website via the following link: https://www.euronav.com/investors/legal-information/agm/2023/.

A special general meeting (‘SGM’) of shareholders shall be convened in accordance with the Belgian Code of Companies and Associations.

Euronav notes that the agenda items are intended to replace the entire current Supervisory Board, composed solely of independent members, with members nominated by CMB, an unprecedented request by a minority shareholder.

Considering the significant impact such change may have on Euronav, its business and all its shareholders and stakeholders, the Supervisory Board of Euronav has reached out to CMB for further information on its strategy and intentions for Euronav.

On the basis of the information that will be available to it, Euronav is and will be analysing this proposal and the Supervisory Board will issue its recommendation, in accordance with applicable law and corporate governance principles.

We believe that governance tailored to all of Euronav’s shareholders and stakeholders, supportive of Euronav’s strategy, should remain Euronav’s goal, which would require retaining a proportional independence and a high degree of continuity of our Board to ensure value protection for all shareholders. An immediate and abrupt replacement of the entire board, without any transitioning or succession planning, is not in line with those principles and Belgian corporate governance standards. Euronav therefore cannot support or recommend such an idea. Euronav shall also ensure that its strategy, track record and approach are clearly summarised for all of its shareholders ahead of the SGM.

We would prefer to continue to seek a constructive discussion with all our shareholders including CMB as we intend to work to a solution which is in the interests of all of our shareholders.

Full Report

Source: Euronav NV

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