July 28, 2016 - 2:42 AM EDT
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Euronav NV - Preliminary Second Quarter & Half Year Results 2016

ANTWERP, Belgium, July 28, 2016 /PRNewswire/ --

HIGHLIGHTS

  • Strong first half year leading to proportionate EBITDA of USD 298.6 million
  • Q2 profits affected for non-recurring charge related to Suezmax joint ventures termination
  • Rates decline in June reflect seasonal trading patterns likely to persist through Q3
  • Interim dividend to be announced on 25 August with final half year results; returns policy re-affirmed

 

Euronav NV (NYSE:EURN & Euronext: EURN) ("Euronav" or the "Company") today reported its non-audited financial results for the second quarter and the first half of 2016.

EURONAV Logo

Paddy Rodgers, CEO of Euronav said: "The seasonal adjustment in freight rates has been exacerbated by a combination of factors acting simultaneously to press freight rates lower. Notwithstanding short term headwinds Euronav anticipates a seasonal rate recovery into the winter supported by recent upgrades in anticipated crude demand (IEA) and if current disrupting market factors dissipate. 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".   













































































The most important key figures (unaudited) are:


















in thousands of USD



First Quarter 2016



Second Quarter 2016



First Semester 2016



First Semester 2015


















Revenue



214,875



189,575



404,450



416,529



Other operating Income



1,724



1,978



3,702



4,296


















Voyage expenses and commissions



(11,348)



(13,507)



(24,855)



(37,667)



Vessel operating expenses



(38,397)



(41,694)



(80,091)



(76,779)



Charter hire expenses



(6,212)



(4,798)



(11,010)



(13,726)



General and administrative expenses



(10,485)



(11,236)



(21,721)



(21,127)



Net gain (loss) on disposal of tangible assets



13,821



(2)



13,819



2,126



Net gain (loss) on disposal of investments in equity accounted investees



-



(24,150)



(24,150)



-



Depreciation



(53,207)



(56,290)



(109,497)



(101,698)


















Net finance expenses



(9,529)



(9,546)



(19,074)



(27,035)



Share of profit (loss) of equity accounted investees



12,438



9,838



22,276



25,015



Result before taxation



113,680



40,168



153,849



169,934


















Tax Benefit (Expense)



(138)



(20)



(159)



3,315



Profit (loss) for the period



113,542



40,148



153,690



173,249


















Attributable to:    Owners of the company



113,542



40,148



153,690



173,249



                          Non-controlling interests



-



-



-



-































































The contribution to the result is as follows:



















in thousands of USD



First Quarter 2016



Second Quarter 2016



First Semester 2016



First Semester 2015


















Tankers



104,956



31,501



136,458



156,624



FSO



8,586



8,647



17,232



16,625



Result after taxation



113,542



40,148



153,690



173,249































































Information per share:

























in USD per share



First Quarter 2016



Second Quarter 2016



First Semester 2016



First Semester 2015


















Weighted average number of shares (basic) *



158,370,099



158,348,010



158,359,054



153,071,800



Result after taxation



0.72



0.25



0.97



1.13















































* The number of shares outstanding on 30 June 2016 is 159,208,949.







































EBITDA reconciliation (unaudited):






















in thousands of USD



First Quarter 2016



Second Quarter 2016



First Semester 2016



First Semester 2015


















Profit (loss) for the period



113,542



40,148



153,690



173,249



+ Depreciation



53,207



56,290



109,497



101,698



+ Net finance expenses



9,529



9,546



19,074



27,035



+ Tax Benefit (Expense)



138



20



159



(3,315)


















EBITDA



176,416



106,004



282,420



298,667


















+ Depreciation equity accounted investees



7,353



6,620



13,972



14,490



+ Net finance expenses equity accounted investees



1,239



971



2,210



2,917



+ Tax Benefit (Expense) equity accounted investees



-



-



-



-


















Proportionate EBITDA



185,007



113,595



298,603



316,074































































EBITDA reconciliation per share:


















in USD per share



First Quarter 2016



Second Quarter 2016



First Semester 2016



First Semester 2015


















Weighted average number of shares (basic) *



158,370,099



158,348,010



158,359,054



153,071,800



EBITDA



1.17



0.72



1.89



2.06















































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.


 

 

If the Company had continued to apply the proportionate consolidation method for its joint ventures for the second quarter of 2016, the proportionate EBITDA (a non IFRS-measure) would have been USD 113.6 million (second quarter 2015: USD 162.3 million), and the profit for the period would have remained the same.

For the first half of 2016 the Company had a net result of USD 153.7 million or USD 0.97 per share (first half 2015: USD 173.2 million and USD 1.13 per share). Proportionate EBITDA for the same period was USD 298.6 million (first half 2015: USD 316.1 million).

The result is negatively affected by a non-recurring charge (non-cash) related to the termination of the joint ventures with Bretta Tanker Holdings, Inc. covering four Suezmax vessels as announced on 20 May 2016. Euronav assumed full ownership of the two youngest vessels, the Captain Michael (2012- 157,648 dwt) and the Maria (2012 – 157,523 dwt) in early June. In accordance with IFRS 3 (Business Combinations), Euronav is accounting this transaction as a step acquisition and therefore had to re-measure to fair value Euronav's non-controlling equity interest in the two joint ventures it acquired as well as to measure at fair value the consideration transferred, including Euronav's interest in the other two joint ventures. On that basis, Euronav has recognized a loss (non-cash) of USD 24.2 million in the second quarter.

As a consequence of the termination of the joint ventures, the Company will account directly for the two entities owning the Suezmax vessels, instead of accounting for 50% of four vessels using the equity method. Euronav has compensated Bretta Tanker Holdings, Inc. for the difference in value due to the younger age profile of the ships it took over as well as the voyages in progress and has paid the sum of USD 15.1 million upon closing the transaction.

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

 

In USD per day

 

Second
quarter
2016

Second
quarter
2015

First
Semester
2016

First
Semester
2015

VLCC



Average spot rate (in TI Pool)

47,864

55,570

54,156

53,370

Average time-charter rate*

44,382

38,148

42,461

41,705

Suezmax



Average spot rate**

33,119

41,886

35,729

42,364

Average time-charter rate*

26,363

35,258

29,307

37,954

* Including profit share where applicable

** Excluding technical offhire days

 

EURONAV TANKER FLEET

On 13 May 2016 Euronav took delivery of the VLCC Anne (2016 – 299,533 dwt), the fourth and last vessel from the acquisition of four sister vessels announced in June 2015. Euronav has no outstanding capital expenditure commitments going forward.   

VALUE CREATION FOR SHAREHOLDERS

As per past practice, Euronav will announce the interim dividend for 2016 together with the release of the final results for the first half year on 25 August. Euronav confirms its return to shareholders policy which can be consulted on our website.

Euronav's return to shareholders policy is based on the conviction that a significant portion of the operational returns made from the capital base of the business should be distributed to shareholders in return for their investment, absent any exceptional event. Consistent with this, any exceptional items such as any surplus from the sale of vessels, will not be included in the calculation of the amount available for distribution of dividends. Therefore the capital gain from the Famenne (USD 13.8m) will not be included in net income for the purpose of determining the dividend for the year.

During the second quarter of the financial year, Euronav bought back 192,415 shares at an average price of EUR 7.94 per share. This brings the total amount of shares bought back during the first half of 2016 to 692,415 shares. Euronav may continue to buy back its own shares opportunistically, under the authority of the Board of Directors. 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.   

The Company believes there may be attractive investment opportunities in today's market for a long term industrial player such as Euronav. Falling asset values are constructive as they represent the replacement cost of the business and are therefore an expense. Asset prices are approaching historically low valuations which do not accurately reflect the longer term earnings capability of vessels on the water. When combined with Euronav's relatively low leverage and sustained access to capital markets this may provide a number of potentially interesting prospects that would create long lasting shareholder value above and beyond direct returns to shareholders.

CORPORATE

On 2 June 2016 Euronav announced the formation of a commercial joint venture, called Suezmax Chartering, with Diamond S Shipping LLC and Frontline Ltd. The aim of the joint venture is to create a single point of contact for cargo owners to access a large fleet of 43 modern Suezmax vessels, including newbuildings, operated on the spot market.

A larger fleet will provide more flexibility and more options for cargo owners, reduce voyage related expenses through optimization of voyages and thereby reduce greenhouse gas emissions as a direct consequence of using less fuel for cargo movements.

TANKER MARKET

Toward the end of the quarter the anticipated seasonal adjustment in freight rates has been exacerbated by a combination of factors acting simultaneously to press freight rates lower.

First, crude production disruption in a number of countries (Nigeria, Venezuela) has negatively impacted ton mile demand growth. Consequently ton miles have reduced as certain markets (e.g. India) have sourced their marginal barrels during Q2 from short (Middle East) rather than longer haul destinations (Atlantic Basin). Second, a significant number of vessels without vettings or less commercially preferred, have disrupted regular market pricing. These vessels are newbuilding deliveries (five VLCCs in May and five VLCCs in June), vessels returning from dry dock (29 vessels in May and June alone) and older vessels (>20 years). Third, congestion in a number of ports (Qingdao, Basrah) has eased to further decrease voyage times which, combined with some tonnage released from storage toward the end of Q2, increased supply of tonnage into the market at a time of seasonally lower levels of activity.

The fall in the value of tanker prices that continued during Q2, has been interpreted as a confirmation that the freight rate cycle has peaked. Euronav believes this is not the case and largely reflects the structural changes that have occurred in the financing of the tanker sector. Indeed, pressure on commercial banks from both regulatory sources and balance sheet losses intensified during Q2 and is reducing access to capital for tanker companies.

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

OUTLOOK

The longer and medium term fundamentals of the crude tanker market gained strength in the first half due to very limited additions to the order book (three VLCCs, two Suezmaxes) and the IEA now forecast 1.4m bpd and 1.3m bpd demand growth for 2016 and 2017 respectively, instead of 1.2m bpd in each year.

Euronav believes that the current market condition of lower seasonal freight rates are exacerbated by a combination of short term disruptive factors highlighted above and could persist through Q3. Notwithstanding short term headwinds, Euronav anticipates a seasonal rate recovery into Q4 supported by recent upgrades in anticipated crude demand (IEA) and current disrupting market factors dissipating. However, it will be mainly owners' sentiment that will determine the timing of any pick up in rates as demand for crude remains robust and cargo volumes very consistent.

So far in the third quarter of 2016, the Euronav VLCC fleet operated in the Tankers International Pool has earned about USD 31,800 per day and 50% of the available days have been fixed and Euronav's Suezmax trading on the spot market have earned about USD 20,900 per day on average with 39% of the available days fixed for the third quarter of 2016.

CONFERENCE CALL

Euronav will host a conference call at 9:30 a.m. EDT / 3:30 p.m. CET on Thursday 28 July 2016 to discuss the results for the second quarter 2016.

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 the Euronav website at http://investors.euronav.com.

 

Webcast Information


Event Type: 

Audio webcast with user-controlled slide presentation

Event Date:

28 July 2016

Event Time:

9:30 a.m. EDT / 3:30 p.m. CET

Event Title: 

"Euronav Q2 2016 Earnings Call"

Event Site/URL:  

 http://services.choruscall.com/links/euronav1607282IuSwBBR

Telephone participants may avoid 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/10089522.  Pre-registration fields of information to be gathered: name, company, email.

Telephone participants located in the U.S. who are unable to pre-register may dial in to
1-877-328-5501 on the day of the call. Others may use the international dial-in number +1-412-317-5471.

A replay of the call will be available until August 4 2016, beginning at 11:30 a.m. EDT / 5:30 p.m. CET on 28 July 2016. Telephone participants located in the U.S. can dial 1-877-344-7529. Others can dial +1-412-317-0088. Please reference the conference number: 10089522.

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 and supply of 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. This press release should be read in conjunction with the Belgian annual report and the documents filed with the United States Securities and Exchange Commission ("SEC"), including but not limited to the annual report on form 20-F, for a more complete discussion of these and other risks and uncertainties.

Announcement of final half year results 2016: 25 August 2016

About Euronav

Euronav is an independent tanker company engaged in the ocean transportation and storage of crude oil and petroleum products. 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 one V-Plus vessel, 30 VLCCs (of which 1 in 50%-50% joint venture), 20 Suezmaxes 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.








Condensed consolidated statement of financial position

(in thousands of USD except per share amounts)


















June 30, 2016



December 31, 2015

ASSETS














Non-current assets







Vessels



2,592,723



2,288,036

Assets under construction



-



93,890

Other tangible assets



853



1,048

Prepayments



5



2

Intangible assets



202



238

Other receivables



174,818



259,908

Investments in equity accounted investees



26,721



21,637

Deferred tax assets 



762



935








Total non-current assets



2,796,084



2,665,694








Current assets







Trade and other receivables 



174,662



219,079

Current tax assets



151



114

Cash and cash equivalents



100,488



131,663

Non-current assets held for sale



-



24,195








Total current assets



275,301



375,051








TOTAL ASSETS



3,071,385



3,040,745















EQUITY and LIABILITIES














Equity







Share capital 



173,046



173,046

Share premium



1,215,227



1,215,227

Translation reserve



206



(50)

Treasury shares



(16,102)



(12,283)

Retained earnings



552,074



529,808








Equity attributable to owners of the Company



1,924,451



1,905,748








Total non-current liabilities







Bank loans



965,056



952,426

Other payables



534



590

Employee benefits



2,114



2,038

Provisions



205



436








Total non-current liabilities



967,909



955,490








Current Liabilities







Trade and other payables



70,475



79,078

Tax liabilities



98



1

Loans and borrowings



108,125



100,022

Provisions



327



406








Total current liabilities



179,025



179,507








TOTAL EQUITY and LIABILITIES



3,071,385



3,040,745















 








Condensed consolidated statement of profit and loss

(in thousands of USD except per share amounts)


















2016



2015




Jan. 1 - Jun. 30, 2016



Jan. 1 - Jun. 30, 2015

Shipping revenue







Revenue



404,450



416,529

Gains on disposal of vessels/other tangible assets



13,821



2,128

Other operating income



3,702



4,296

Total shipping revenue



421,973



422,953








Operating expenses







Voyage expenses and commissions



(24,855)



(37,667)

Vessel operating expenses



(80,091)



(76,779)

Charter hire expenses



(11,010)



(13,726)

Loss on disposal of vessels/other tangible assets



(2)



(2)

Loss on disposal of investments in equity accounted investees



(24,150)



-

Impairment on non-current assets held for sale







Depreciation tangible assets



(109,447)



(101,687)

Depreciation intangible assets



(50)



(11)

General and administrative expenses



(21,721)



(21,127)

Total operating expenses



(271,326)



(250,999)








RESULT FROM OPERATING ACTIVITIES



150,647



171,954








Finance income



1,884



389

Finance expenses



(20,958)



(27,424)

Net finance expenses



(19,074)



(27,035)








Share of profit(loss) of equity accounted investees (net of income tax) 



22,276



25,015








PROFIT (LOSS) BEFORE INCOME TAX



153,849



169,934








Income tax expense



(159)



3,315








PROFIT (LOSS) FOR THE PERIOD



153,690



173,249








Attributable to:







   Owners of the company



153,690



173,249

   Non-controlling interests



-



-








Basic net income/(loss) per share



0.97



1.13

Diluted net income/(loss) per share



0.97



1.11








Weighted average number of shares (basic)



158,359,054



153,071,800

Weighted average number of shares (diluted)



158,575,911



155,915,594








 








Condensed consolidated statement of comprehensive income

(in thousands of USD except per share amounts)


















2016



2015




Jan. 1 - Jun. 30, 2016



Jan. 1 - Jun. 30, 2015








Profit/(loss) for the period



153,690



173,249








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 



256



(391)

Equity-accounted investees - share of other
comprehensive income



548



718








Other comprehensive income, net of tax



804



327








Total comprehensive income for the period



154,494



173,576








Attributable to:







   Owners of the company



154,494



173,576

 











Condensed consolidated statement of changes in equity

(in thousands of USD except per share amounts)












Share capital

Share premium

Translation reserve

Hedging reserve

Treasury shares

Retained earnings

Capital and reserves

Other

Total equity











Balance at January 1, 2015

142,441

941,770

379

-

(46,062)

359,180

1,397,708

75,000

1,472,708











Profit (loss) for the period

-

-

-

-

-

173,249

173,249

-

173,249

Total other comprehensive income

-

-

(391)

-

-

718

327

-

327

Total comprehensive income

-

-

(391)

-

-

173,967

173,576

-

173,576











Transactions with owners of the company










Issue of ordinary shares

20,324

208,738

-

-

-

(19,357)

209,705

-

209,705

Issue and conversion convertible Notes

10,281

64,719

-

-

-

-

75,000

(75,000)

-

Issue and conversion perpetual convertible preferred equity










Dividends to equity holders

-

-

-

-

-

(39,656)

(39,656)

-

(39,656)

Treasury shares

-

-

-

-

30,708

(23,158)

7,550

-

7,550

Equity-settled share-based payment

-

-

-

-

-

967

967

-

967

Total transactions with owners

30,605

273,457

-

-

30,708

(81,204)

253,566

(75,000)

178,566











Balance at June 30, 2015

173,046

1,215,227

(12)

-

(15,354)

451,944

1,824,851

-

1,824,851
































Share capital

Share premium

Translation reserve

Hedging reserve

Treasury shares

Retained earnings

Capital and reserves

Other

Total equity











Balance at January 1, 2016

173,046

1,215,227

(50)

-

(12,283)

529,808

1,905,748

-

1,905,748











Profit (loss) for the period

-

-

-

-

-

153,690

153,690

-

153,690

Total other comprehensive income

-

-

256

-

-

548

804

-

804

Total comprehensive income

-

-

256

-

-

154,238

154,494

-

154,494











Transactions with owners of the company










Dividends to equity holders

-

-

-

-

-

(129,846)

(129,846)

-

(129,846)

Treasury shares

-

-

-

-

(3,819)

(2,338)

(6,157)

-

(6,157)

Equity-settled share-based payment

-

-

-

-

-

212

212

-

212

Total transactions with owners

-

-

-

-

(3,819)

(131,972)

(135,791)

-

(135,791)











Balance at June 30, 2016

173,046

1,215,227

206

-

(16,102)

552,074

1,924,451

-

1,924,451











 

 








Condensed consolidated statement of cash flows

(in thousands of USD except per share amounts)


















2016



2015



Jan. 1 - Jun. 30, 2016


Jan. 1 - Jun. 30, 2015

Cash flows from operating activities







Profit (loss) for the period



153,690



173,249








Adjustments for:



116,750



99,507

     Depreciation of tangible assets



109,447



101,687

     Depreciation of intangible assets



50



11

     Loss (gain) on disposal of investments in equity accounted investees



24,150



-

     Provisions



(248)



263

     Tax (benefits)/expenses



159



(3,315)

     Share of profit of equity-accounted investees, net of tax



(22,276)



(25,015)

     Net finance expense



19,075



27,035

     (Gain)/loss on disposal of assets



(13,819)



(2,126)

     Equity-settled share-based payment transactions



212



967








Changes in working capital requirements



35,804



(55,873)

     Change in cash guarantees



59



(39)

     Change in trade receivables



(541)



10,581

     Change in accrued income



10,441



(12,696)

     Change in deferred charges



(7,457)



3,737

     Change in other receivables



45,669



(32,370)

     Change in trade payables



(800)



16,746

     Change in accrued payroll



(915)



(620)

     Change in accrued expenses



(5,174)



(4,348)

     Change in deferred income



(5,393)



3,062

     Change in other payables



(158)



(39,926)

     Change in provisions for employee benefits



73



-








Income taxes paid during the period



73



173

Interest paid



(16,428)



(33,460)

Interest received



98



188

Dividends received from equity-accounted investees



778



275








Net cash from (used in) operating activities



290,765



184,059








Acquisition of vessels



(199,778)



(271,743)

Proceeds from the sale of vessels



38,016



91,065

Acquisition of other tangible assets



(43)



(8,114)

Acquisition of intangible assets



(15)



(63)

Proceeds from the sale of other (in)tangible assets



-



63

Loans from (to) related parties



22,047



12,835

Proceeds from capital decreases in joint ventures



3,737



1,500

Acquisition of subsidiaries, net of cash acquired



(6,755)



-








Net cash from (used in) investing activities



(142,791)



(174,457)








Proceeds from issue of share capital



-



229,063

Transaction costs related to issue of share capital



-



(19,357)

(Purchase of) Proceeds from sale of treasury shares



(6,157)



7,550

Proceeds from new borrowings



262,300



338,770

Repayment of borrowings



(304,952)



(631,317)

Dividends paid



(129,847)



(39,656)








Net cash from (used in) financing activities



(178,656)



(114,947)






















Net increase (decrease) in cash and cash equivalents



(30,682)



(105,345)








Net cash and cash equivalents at the beginning of the period



131,663



254,086

Effect of changes in exchange rates



(493)



(515)








Net cash and cash equivalents at the end of the period



100,488



148,224

 

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/euronav-nv---preliminary-second-quarter--half-year-results-2016-300305353.html

SOURCE Euronav NV


Source: PR Newswire (July 28, 2016 - 2:42 AM EDT)

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