Euronav’s Earnings Drop amid Challenging Freight Market

Belgian tanker owner Euronav witnessed a drop in its fourth quarter of 2017 net profit as the freight market remained under pressure.

The company delivered a net profit of USD 19.2 million, for the quarter ended December 31, 2017, down from a net profit of USD 50.3 million seen in the same period a year earlier.

The company’s average daily time charter equivalent rates (TCE) for very large crude carriers was at USD 35,399 in the quarter, down from USD 43,833 from a year earlier, while average Suezmax rate reached USD 21,417, declining from USD 24,662 seen in the fourth quarter of 2016.

“Whilst freight rates improved sequentially over the third quarter, the typical seasonal rate pattern for the fourth quarter was not observed. Excess tonnage in key markets combined with a short-term change to OPEC export trading patterns kept the freight market under pressure,” Paddy Rodgers, CEO of Euronav, said.

“Euronav retains both now and going forward substantial balance sheet capacity and fixed income visibility to navigate through such periods and remains confident on the medium-term trends for the crude tanker market,” Rodgers added.

During the quarter, the company sold three of its vessels, generating USD 36.5 million capital gains. Two were sold in November, namely the 298,330 dwt VLCC Artois and the 146,652 dwt Suezmax Cap Georges, while the third, the VLCC Flandre, was disposed of in December.

Other events during the fourth quarter included a stock-for-stock merger agreement between Euronav and Gener8 Maritime, following which Gener8 would become a wholly-owned subsidiary of Euronav. The merger will create an 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.

“Work on the transaction is proceeding as planned and we look forward to updating investors with the filing of a proxy statement/prospectus in February,” Euronav said.