Euronav NV: Preliminary Second Quarter & Half Year Results 2015

Jul 30, 2015, 02:03 ET from Euronav NV

ANTWERP, Belgium, July 30, 2015 /PRNewswire/ --

HIGHLIGHTS  

  • Sustained improvement in freight rates drives higher EBITDA to USD 142.3 million
  • Acquisition of four existing VLCCs under construction with option for four more sister vessels
  • Robust start of Q3 with freight rates for VLCC so far above $60,000/day and more than 50% of available days already fixed
  • Interim Dividend to be announced on August 20 with final half year results

Euronav NV (NYSE: EURN & Euronext: EURN) ("Euronav" or the "Company") today reported its preliminary financial results for the three months ended 30 June 2015 and for the 6 months ended 30 June 2015.

     (Logo: http://photos.prnewswire.com/prnh/20150206/728388 )

Paddy Rodgers, CEO of Euronav said: "Euronav has made further progress during Q2 by securing four modern VLCCs with the option for four more - at a very competitive price. This fleet rejuvenation was supported by a strong and stable rate environment during the second quarter which has continued into the current quarter. Improving demand for and increased supply of crude oil, rising sea-miles to serve that demand in the Far East and a manageable outlook for vessel supply all provide a supportive market structure. Management look forward with confidence."


   
The  most  important  key  figures  are:

                                               First       Second      First       First
                                               Quarter     Quarter     Semester    Semester
in thousands of USD                            2015        2015        2015        2014

Revenue                                        204,521     212,008      416,529     201,157
Other operating Income                           2,488       1,808        4,296       3,534
                                                                -
Voyage expenses and commissions                (21,916)    (15,749)     (37,665)    (54,586)
Vessel operating expenses                      (36,809)    (39,970)     (76,779)    (52,144)
Charter hire expenses                           (9,052)     (4,674)     (13,726)    (11,121)
General and administrative expenses            (10,020)    (11,106)     (21,126)    (17,223)
Net Gain (loss) on disposal                   
of tangible assets                               2,120           6        2,126      (1,026)


EBITDA                                         131,332     142,323      273,655      68,591

Depreciation                                   (49,116)    (52,583)    (101,699)    (67,684)
EBIT (result from operating activities)         82,216      89,740      171,956         907

Net finance expenses                           (16,534)    (10,501)     (27,035)    (36,515)
Share of profit (loss) of equity accounted
investees                                       13,624      11,391       25,015      14,393
Result before taxation                          79,306      90,630      169,936     (21,214)

Tax Benefit (Expense)                           1,549        1,766        3,315         (38)
Profit (loss) for the period                    80,855      92,396      173,251     (21,252)

Attributable to:      Owners of the company     80,855      92,396      173,251     (21,252)
                      Non-controlling intrests  -           -           -            -

The contribution to the result is as follows

                                               First       Second      First       First
                                               Quarter     Quarter     Semester    Semester
in thousands of USD                            2015        2015        2015        2014

Tankers                                        72,772      83,853      156,625     (35,388)
FSO                                             8,083       8,543       16,626      14,136
result after taxation                          80,855      92,396      173,251     (21,252)

Information per share:

                                               First       Second      First       First
                                               Quarter     Quarter     Semester    Semester
in USD per share                               2015        2015        2015        2014

Weighted average number
of shares (basic) **                        148,065,537 158,023,051 153,071,800 104,324,074
EBITDA                                         0.89        0.90        1.79         0.66
EBIT (operating result)                        0.56        0.57        1.12         0.01
result after taxation                          0.55        0.58        1.13        (0.20)

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 30 June 2015 is 159,208,949.

For the second quarter 2015, the Company had a net result of USD 92.4 million or USD 0.58 per share (second quarter 2014: minus USD 22.6 million and minus USD 0.19 per share). EBITDA (a non-IFRS measure) for the same period was USD 142.3 million (second quarter 2014: USD 22.1 million).

Euronav has applied the accounting standards IFRS 10 and IFRS 11 as of 1 January 2014. If the Company would have continued to apply the proportionate consolidation method for its joint ventures for the first half of 2015, the adjusted EBITDA (a non-IFRS measure) would have been USD 316.1 million (first half 2014: USD 108.5 million) and the result after taxation would have remained the same.

EURONAV FLEET  

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


   
                                               
    In USD per day                             

                                   Second       Second         First        First
                                   quarter      quarter       Semester     Semester
                                    2015         2014          2015         2014
    VLCC
    Average spot rate (in TI
    Pool)                          55,570       21,464        53,370       27,032
    Average time-charter rate*     38,148       27,655        41,705       32,380
    Suezmax
    Average spot rate**            41,886       18,445        42,364       19,612
    Average time-charter rate*     35,258       19,797        37,954       24,972

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

EURONAV TANKER FLEET  

As announced in our first quarter earnings press release, on 9 April 2015 Euronav took delivery of the VLCC Hakata (2010 - 302,550 dwt) which was the last vessel to be delivered as part of the acquisition of four modern Japanese-built VLCC vessels announced on 8 July 2014.

CORPORATE  

On 16 June 2015, Euronav announced the acquisition through resale of newbuilding contracts of four VLCCs - currently completing construction at Hyundai Heavy Industries for an aggregate purchase price of USD 384 million. The vessels are due for prompt delivery starting September 2015. In addition and against the payment of an option fee of an aggregate amount of USD 8 million, the seller has also agreed to grant Euronav an option to acquire up to a further 4 VLCCs sisters of the ones acquired at a price of USD 98 million each.

This transaction is consistent with three core company principles:

Firstly, these vessels are ex-yard resales, which do not add supply to the market and therefore meet our stated aim to only add existing vessels to our fleet and not to order new ships.

Secondly, the time lag between the purchase and the deliveries to the company will be very similar to buying a fleet on the water, therefore allowing the capital deployed to be rewarded by the freight market imminently.

Last, Euronav actively looks to regularly rejuvenate its fleet and enhance its operational strength. This will be achieved as these four vessels are of the latest design and similar or better to the ones acquired in July 2014.

THE TANKER MARKET  

The key feature of the tanker market during Q2 was its stability. Freight rates throughout the three months to the end of June were consistently strong in both the VLCC and Suezmax categories. Tanker owners exhibited resolute discipline during the period which continues to be encouraging since it has been applied throughout 2015 so far.

Global oil demand projections were consistently upgraded during Q2 with the IEA, OPEC and EIA all raising forecasts to arrive at a consensus of 1.34m bpd growth in both 2015 and 2016 - up from 1.15m bpd at the end of Q1. The lower oil price - as we intimated at the end of Q1 - has stimulated and continues to boost demand.

The orderbook of tanker vessels has increased during Q2 2015 with further orders at the shipyards but this order flow has remained modest by historical standards - especially given the positive freight rate background. The impact on the global fleet in both VLCC and Suezmax will not be seen until the second half of 2016. Euronav remains of the view that the current schedule of vessel supply is manageable given the robust fundamentals of the tanker sector but as it has been the case in the past, additional orders may result in overcapacity and lead to destruction of the market.

The supply of crude oil is continuing to be driven higher with record output witnessed during Q2 in a number of key territories most notably Saudi Arabia, Iraq and Russia.

An important and growing theme is port congestion. This is taking capacity out of the market and is being driven by excess supply of crude unable to find storage on shore. The congestion seen currently is being treated as normal commercial delay but this de facto storage may soon become recognized storage under normal storage terms.

This is only likely to be resolved in three ways: (1) reduced production - which looks as unlikely given OPEC production plans and the potential return of Iranian output (2) increased demand utilizing this supply - this would be positive for tankers as it would increase the demand for shipping or (3) potentially increase the contango spread on oil prices - this in turn would increase the demand for additional storage and part of that storage is likely to be done offshore onboard tanker vessels.

OUTLOOK  

The current quarter has started positively with freight rates rising in what is usually a seasonally weak period. Industry fundamentals remain healthy with limited vessel supply, growing demand stimulated by a lower oil price, increased supply of oil from record production and the continuing theme of ton mile expansion of Atlantic Basin Oil heading East.

So far, in the third quarter, the Euronav VLCC fleet operated by Tankers International pool earned on average just under USD 61,000 per day (TCE) and 52.6% of the available days have been fixed. Euronav's Suezmax fleet trading on the spot market have earned on average USD 42,750 per day (TCE) and 50% of the available spot days have been fixed.

Euronav is well positioned to continue to benefit from these positive sector trends well into 2016, is conservatively leveraged, has a strong focus on maximizing returns for shareholders in the form of dividends and is disciplined in terms of future growth opportunities.  

CONFERENCE CALL   

Euronav will host a conference call at 9:30 a.m. EST / 3:30 p.m. CET on Thursday 30 July 2015 to discuss the results for the quarter.

The call will be a webcast with an accompanying slideshow. You can find details of this conference call below and on the "Investor Relations" page of Euronav's website at http://investors.euronav.com/.


   
    Webcast Information
    Event Type:         Audio webcast with user-controlled slide presentation
    Event Date:         30 July 2015
    Event Time:         9:30 a.m. EST / 3:30 p.m. CET
    Event Title:        "Euronav Q2 2015 Earnings Call"
    Event Site/URL      http://services.choruscall.com/links/euronav150730

Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN conference call registration link: http://dpregister.com/10069401. Pre-registration fields of information to be gathered: name, company, email.

Telephone participants who are unable to pre-register may dial in to 1-866-807-9684 on the day of the call. The international dial-in number is 1-412-317-5415.

A replay of the call will be available until 7 August 2015, beginning at 11:30 a.m. EST / 5:30 p.m. CET on 30 July 2015 by dialing 1-877-344-7529 or 1-412-317-0088 and referencing the conference number 10069401.

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, drydocking 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.

Announcement of Final First Half Results 2015: Thursday 20 August 2015  

About Euronav  

Euronav 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, 2 FSO vessels (both owned in 50%-50% joint venture), 27 VLCCs (of which 1 in 50%-50% joint venture) and 23 Suezmaxes (of which 4 in 50%-50% joint venture). Deliveries of the recently acquired VLCCs will increase the Euronav tanker fleet by another 4 VLCCs. 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.  


   
    Condensed  consolidated  statement  of  financial  position
    (in thousands of USD except per share amounts)

                                                   June 30, 2015  December 31, 2014
    ASSETS

    Current assets
    Trade and other receivables                      225,424        194,733
    Current tax assets                                    33             36
    Cash and cash equivalents                        148,224        254,086
    Non-current assets held for sale                     -           89,000

    Total current assets                             373,681        537,855

    Non-current assets
    Vessels                                        2,322,408      2,258,334
    Assets under construction                        122,790            -
    Other tangible assets                              1,129          1,226
    Prepayments                                        8,001         16,601
    Intangible assets                                     83             29
    Receivables                                      269,364        258,447
    Investments in equity-accounted investees         17,576         17,332
    Deferred tax assets                                9,815          6,536

    Total non-current assets                       2,751,166      2,558,505

    TOTAL ASSETS                                   3,124,847      3,096,360

    EQUITY and LIABILITIES

    Equity
    Share capital                                    173,046        142,441
    Share premium                                  1,215,228        941,770
    Translation reserve                                 (12)            379
    Hedging reserve                                      -              -
     Treasury shares                                 (15,354)       (46,062)
    Other equity interest                                -           75,000
    Retained earnings                                451,945        359,180

    Equity attributable to owners of the Company   1,824,853      1,472,708

    Current Liabilities
    Trade and other payables                          87,846        125,555
    Tax liabilities                                      136              1
    Bank loans                                       167,139        146,303
    Convertible and other Notes                          -           23,124
    Provisions                                           449            412

    Total current liabilities                        255,570        295,395

    Non-current liabilities
    Bank loans                                     1,035,333      1,088,026
    Convertible and other Notes                          -          231,373
    Other payables                                       494            489
    Deferred tax liabilities                             -              -
    Employee benefits                                  2,096          2,108
    Amounts due to equity-accounted joint ventures     5,880          5,880
    Provisions                                           621            381

    Total non-current liabilities                  1,044,424      1,328,257

    TOTAL EQUITY and LIABILITIES                   3,124,847      3,096,360


   
    Condensed  consolidated  statement  of  profit  or  loss
    (in thousands of USD except per share amounts)

                                                              2015            2014

                                                             Jan. 1 -       Jan. 1 -
                                                           Jun. 30, 2015  Jun. 30, 2014
    Shipping revenue
    Revenue                                                 416,529         201,157
    Gains on disposal of vessels/other tangible assets        2,128           6,390
    Other operating income                                    4,296           3,534
    Total shipping revenue                                  422,953         211,081

    Operating expenses
    Voyage expenses and commissions                         (37,665)        (54,586)
    Vessel operating expenses                               (76,779)        (52,144)
    Charter hire expenses                                   (13,726)        (11,121)
    Losses on disposal of vessels/other tangible assets          (2)            -
    Impairment on non-current assets held for sale              -            (7,416)
    Depreciation tangible assets                           (101,688)        (67,674)
    Depreciation intangible assets                              (11)            (10)
    General and administrative expenses                     (21,126)        (17,222)
    Total operating expenses                               (250,997)       (210,173)

    RESULT FROM OPERATING ACTIVITIES                        171,956             908

    Finance income                                              389             623
    Finance expenses                                        (27,424)        (37,138)
    Net finance expenses                                    (27,035)        (36,515)

    Share of profit (loss) of equity accounted investees
    (net of income tax)                                      25,015          14,393

    PROFIT (LOSS) BEFORE INCOME TAX                         169,936         (21,214)

    Income tax benefit (expense)                              3,315             (38)

    PROFIT (LOSS) FOR THE PERIOD                            173,251         (21,252)

    Attributable to:
    Owners of the company                                   173,251         (21,252)

    Basic net income/(loss) per share                          1.13           (0.20)
    Diluted net income/(loss) per share                        1.13           (0.20)

    Weighted average number of shares (basic)            153,071,800     104,324,074
    Weighted average number of shares (diluted)          153,957,157     104,324,074

    Consolidated statement of comprehensive income
    (in thousands of USD except per share amounts)

    Profit/(loss) for the period                            173,251         (21,252)

    Other comprehensive income, net of tax
    Items that will never be reclassified to profit or loss:
    Remeasurements of the defined benefit liability (asset)     -               -

    Items that are or may be reclassified to profit or loss:
    Foreign currency translation differences                   (391)            (54)
    Cash flow hedges - effective portion of changes in fair
    value                                                       -             1,291
    Equity-accounted investees - share of other
    comprehensive income                                        718             960

    Other comprehensive income, net of tax                      327           2,197

    Total comprehensive income for the period               173,578         (19,055)

    Attributable to:
    Owners of the company                                   173,578         (19,055)


   
Condensed  consolidated  statement  of  changes  in  equity
(in thousands of USD except per share amounts)

                                          Share    Share    Translation Hedging  Treasury
                                          capital  premium  reserve     reserve  shares
Balance at January 1, 2014                58,937   365,574      946     (1,291)  (46,062)

Profit (loss) for the period                 -        -         -          -         -
Total other comprehensive income             -        -         (54)     1,291       -
Total comprehensive income                   -        -         (54)     1,291       -

Transactions with owners of the company
Issue of ordinary shares                  41,645   308,355      -          -         -
Issue and conversion convertible Notes    20,103    89,597      -          -         -
Issue and conversion perpetual
 convertible preferred equity             10,281    64,718      -          -         -
Equity-settled share-based payment           -         -        -          -         -
Total transactions with owners            72,029   462,670      -          -         -

Balance at June 30, 2014                 130,966   828,244      892        -     (46,062)

                                          Share    Share    Translation Hedging  Treasury
                                          capital  premium  reserve     reserve  shares
Balance at January 1, 2015               142,441   941,770      379        -     (46,062)

Profit (loss) for the period                 -         -        -          -         -
Total other comprehensive income             -         -       (391)       -         -
Total comprehensive income                   -         -       (391)       -         -

Transactions with owners of the company
Issue of ordinary shares                  20,324   208,739      -          -         -
Issue and conversion convertible Notes       -                  -          -         -
Issue and conversion perpetual
 convertible preferred equity             10,281    64,719      -          -         -
Dividends to equity holders                  -         -        -          -         -
Treasury shares                              -         -        -          -      30,708
Equity-settled share-based payment           -         -        -          -         -
Total transactions with owners            30,605   273,458      -          -      30,708

Balance at June 30, 2015                 173,046 1,215,228      (12)       -     (15,354)

Table continues…  


   
Condensed  consolidated  statement  of  changes  in  equity (continued...)
(in thousands of USD except per share amounts)

                                                     Capital    Other
                                          Retained   and        equity    Total
                                          earnings   reserves   interest  equity
Balance at January 1, 2014                422,886    800,990      -       800,990

Profit (loss) for the period              (21,252)   (21,252)     -       (21,252)
Total other comprehensive income              960      2,197      -         2,197
Total comprehensive income                (20,292)   (19,055)     -       (19,055)

Transactions with owners of the company
Issue of ordinary shares                   (8,601)   341,399      -       341,399
Issue and conversion convertible Notes     (7,422)   102,278      -       102,278
Issue and conversion perpetual
 convertible preferred equity              (3,500)    71,499   75,000     146,499
Equity-settled share-based payment          2,210      2,210      -         2,210
Total transactions with owners            (17,313)   517,386   75,000     592,386

Balance at June 30, 2014                  385,281  1,299,321   75,000   1,374,321

                                                     Capital   Other
                                           Retained  and       equity    Total
                                           earnings  reserves  interest  equity
Balance at January 1, 2015                359,180  1,397,708   75,000   1,472,708

Profit (loss) for the period              173,251    173,251      -       173,251
Total other comprehensive income              718        327      -           327
Total comprehensive income                173,969    173,578      -       173,578

Transactions with owners of the company
Issue of ordinary shares                  (19,357)   209,706      -       209,706
Issue and conversion convertible Notes        -          -        -           -
Issue and conversion perpetual
 convertible preferred equity                 -       75,000  (75,000)        -
Dividends to equity holders               (39,656)   (39,656)     -       (39,656)
Treasury shares                           (23,158)     7,550      -         7,550
Equity-settled share-based payment            967        967      -           967
Total transactions with owners            (81,204)   253,567  (75,000)    178,567

Balance at June 30, 2015                  451,945  1,824,853      -     1,824,853

   

Condensed  consolidated  statement  of  cash  flows

(in thousands of USD except per share amounts)

                                                            2015              2014
                                                          Jan. 1 -          Jan. 1 -
                                                        Jun. 30, 2015     Jun. 30, 2014

Cash flows from operating activities

Profit (loss) for the period                                173,251           (21,252)

Adjustments for:                                             99,507            93,079

Depreciation of tangible assets                             101,688            67,674

Depreciation of intangible assets                                11                10

Impairment on non-current assets held for sale                  -               7,415

Provisions                                                      262               -

Tax benefits (expenses)                                      (3,315)               38

Share of profit of equity-accounted investees, net of tax   (25,015)          (14,393)

Net finance expense                                          27,035            36,515

Capital gain (loss) on disposal of assets                    (2,126)           (6,390)

Equity-settled share-based payment transactions                 967             2,210

Changes in working capital requirements                     (55,875)          (52,668)

Change in cash guarantees                                       (39)              -

Change in trade receivables                                  10,581            (7,332)

Change in accrued income                                    (12,697)          (11,483)

Change in deferred charges                                    3,737           (25,603)

Change in other receivables                                 (32,370)          (15,134)

Change in trade payables                                     16,746            (1,817)

Change in accrued payroll                                      (620)             (825)
 
Change in accrued expenses                                   (4,348)           10,132

Change in deferred income                                     3,062            (2,454)

Change in other payables                                    (39,927)            1,828

Change in provisions for employee benefits                      -                  20

Income taxes paid during the period                             173               129

Interest paid                                               (33,460)          (27,564)
 
Interest received                                               188               244

Dividends received from equity-accounted investees              275             9,410

Net cash from (used in) operating activities                184,059             1,378

Acquisition of vessels                                     (271,743)         (452,096)

Proceeds from the sale of vessels                            91,065            27,900

Acquisition of other tangible assets                         (8,114)          (88,239)

Acquisition of intangible assets                                (63)               (5)

Proceeds from the sale of other (in)tangible assets              63                 2

Loans from (to) related parties                              12,835               (38)

Proceeds of disposals of joint ventures, net of cash disposed 1,500               -

Purchase of joint ventures, net of cash acquired                 -                -

Net cash from (used in) investing activities                (174,457)        (512,476)

Proceeds from issue of share capital                         229,063          350,000

Transaction costs related to issue of share capital          (19,357)          (8,601)

Proceeds from issue of perpetual convertible preferred equity    -            150,000

Transaction costs related to issue perpetual convertible
preferred equity                                                 -             (3,500)

Proceeds from sale of treasury shares                          7,550              -

Proceeds from new long-term borrowings                       338,770          536,399

Repayment of long-term borrowings                           (631,317)        (300,834)

Transaction costs related to issue of loans and borrowings       -            (11,886)

Dividends paid                                               (39,658)             -

Net cash from (used in) financing activities                (114,949)         711,578

Net increase (decrease) in cash and cash equivalents        (105,347)         200,480

Net cash and cash equivalents at the beginning of the period 254,086           74,309

Effect of changes in exchange rates                             (515)            (302)

Net cash and cash equivalents at the end of the period       148,224          274,487

Contact: Mr. Brian Gallagher - Euronav Investor Relations, Tel: +44-20-7870-0436, Email: IR@euronav.com

SOURCE Euronav NV