Highlights of recent developments
Strong start of the fourth quarter due to seasonal demand and improving fundamentals
Successful closing of new USD 340 million senior secured facility
Postponement of US Listing due to weakening capital markets conditions
ANTWERP, Belgium, 16 October 2014 – The executive committee of Euronav NV
(EURONEXT BRUSSELS: EURN) today reported its non-audited financial results for the
three months ended 30 September 2014.
*All figures mentioned in this press release have been prepared under IFRS (International Financial Reporting Standards) as adopted by the EU and have not been reviewed by our auditors. The comparative figures for 2013 have been restated following the application of IFRS 10 & IFRS 11 on Joint Arrangements. The figures have been prepared without taking into account any impact of deferred taxes.
**The number of shares outstanding on September 30, 2014 is 131, 050, 666 (including 1, 750, 000 treasury
shares).
For the third quarter 2014, the company had a net result of USD -20.6 million (third
quarter 2013: USD -27.1 million) or USD -0.16 per share (third quarter 2013: USD -0.54
per share). EBITDA for the same period was USD 36.3 million (third quarter 2013: USD
16.6 million). The financial result is affected by USD 12.4 million of amortization of financial
expenses (non-cash) of which the main part is related to the financing of the Maersk fleet
acquisition.
CHANGE IN ACCOUNTING POLICY: FIRST-YEAR ADOPTION OF IFRS 10 & IFRS 11
As announced in our first quarter earnings release, the company is applying the new
accounting standards IFRS 10 and IFRS 11 as of 1 January 2014. As a result, the
consolidation method applied to joint ventures has changed. Consequently, all the joint
ventures in which the Company has an interest have now been accounted for, using the
equity method and reported in the income statement under the line: ”Share of profit (loss)
of equity accounted investees”. For more details about the impact of the first-time adoption
of IFRS 10 and IFRS 11, please see note “v” included in the notes to the consolidated
financial statements for the period ended 31 December 2013 in our annual report 2013.
If the company would have continued to apply the proportionate consolidation method for
its joint ventures for the third quarter of 2014, the EBITDA would have been USD 53 million
(third quarter 2013: USD 31.2 million), the EBIT would have been USD 0.3 million (third
quarter 2013: USD -11 million) and the result after taxation would have remained the
same.
The average daily time charter equivalent rates (TCE) can be summarized as follows:
In USD per day Third quarter 2014
Third quarter 2013
VLCC Average spot rate 25, 000 14, 000
Suezmax
Average time-charter rate* 21, 500 21, 000
Average spot rate** 22, 750 17, 000
* Including profit share where applicable
** Excluding technical offhire days
RECENT HIGHLIGHTS
On 9 July 2014, the company raised 125 million USD through a private placement of
10, 556, 808 new shares to institutional investors selected through an accelerated book build
offering. The funds raised will be used by Euronav to partially finance its purchase of 4
VLCC vessels as announced on 8 July 2014.
On 14 October 2014 the company signed a new USD 340 million senior secured credit
facility comprising of (i) a USD 192 million term loan facility and (ii) up to USD 148 million
non-amortising revolving credit facility or the purpose of partially financing the acquisition
of 4 VLCCs announced on 8 July and refinancing 4 Suezmax.
On 15 October 2014 Euronav announced that it had decided that due to unfavourable
capital market conditions, to postpone its contemplated initial public offering of ordinary
shares in the United States and related offer to exchange the company’s outstanding
unregistered ordinary shares in Belgium for ordinary shares registered under the Securities
Act of 1933, as amended. However, the company will continue to evaluate the most
appropriate timing for the offerings as market conditions develop.
EURONAV TANKER FLEET
In July, the company took delivery of the following VLCCs (all part of the Maersk acquisition
announced on 5 January 2014): the Iris (2012 – 314, 000 dwt), the Nectar (2008 – 307, 284
dwt), the Neptun (2007 – 307, 284 dwt), the Noble (2008 – 307, 284 dwt), the Simone
(2012 – 314, 000 dwt) and the Sonia (2012 – 314, 000 dwt).
On 8 July 2014 the company announced that it had entered into an agreement for the
purchase of 4 modern Japanese-built VLCC vessels for an aggregate purchase price of USD
342 million. The vessels are on average 3 years old.
On 1 August 2014 the owners of the Cap Isabella (2013 – 157, 258 dwt), which the
company had on bareboat charter, decided to sell the vessel to an unrelated third party. As
announced in our press release of 19 March 2013, the company was entitled to a share of
the profit should the selling price exceed a certain threshold, therefore the company will
book a profit of USD 4.3 million in the fourth quarter of 2014 as the vessel was delivered to
its new owners on 8 October 2014.
On 8 September 2014 the VLCC Olympia (2008 – 315, 981 dwt) was delivered to its new
owners. The delivery took place earlier than expected resulting in an increased purchase
price and a corresponding gain on disposal of assets of USD 2.4 million which was recorded
in the third quarter of 2014.
Euronav operates its spot VLCC tonnage through the Tankers International Pool of which it
is a founding member. Since the 6th of October 2014, the Pool has been operating in a
joint venture with Frontline. This combination is the largest provider of spot VLCC tonnage
in the world and is operating under the name VLCC Chartering Ltd.
On 9 October 2014 Euronav took delivery of the fifteenth and last vessel of the Maersk
acquisition announced on 5 January 2014: the Sandra (2011 – 323, 527 dwt).
TANKER MARKET
Compared with the third quarter last year VLCC earnings are up 80% for the third quarter.
The outlook for the seasonally stronger fourth quarter is looking stronger than in the last
four years: the fleet growth is minimal and the average distance over which cargoes need
to be transported by ships is increasing. This is being further supported by a lower oil price
which is reducing voyage expenses and should stimulate demand for crude oil. Asset prices
have risen steadily since the start of the year on the expectation of improved prospects.
OUTLOOK
So far in the fourth quarter, the Euronav VLCC fleet operated in the Tankers International
pool has earned USD 32, 750 per day and 30.80% of the available days have been fixed.
Euronav’s Suezmaxes trading on the spot market have earned USD 19, 000 per day on
average with 35% of the available days fixed for the fourth quarter.
Announcement of fourth quarter results 2014: Friday, 6 February 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 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 52 double hulled vessels being 1 V-Plus, 2 FSO vessels (both
owned in 50%-50% joint venture), 27 VLCCs of which 1 in joint venture and 22 Suezmaxes (of which 4 in 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
