Thursday, January 24, 2019

Tankers: Belgium's Euronav Returns to Black, Expects Further Freight Rate Recovery

From World Maritime News:

Belgian tanker shipping giant Euronav reported a net profit of USD 0.1 million in the fourth quarter of 2018, tapping into the market recovery.
The results indicate a return to black compared on a quarterly basis, as Euronav had a net loss of USD 58.7 million in the third quarter of 2018. However, year-on-year the profit was lower, as Euronav’s profit in the fourth quarter of 2017 stood at USD 19.4 million.

“The VLCC trading performance in Q4 2018 gives an important signal on the structure of the large crude tanker market. VLCC freight rates trading at rates not seen in the last two years demonstrate an already tight balance between tanker demand and supply. The factors impacting the crude tanker market are very dynamic and likely to remain so for the foreseeable future. The fundamentals such as oil demand, ton mile expansion and vessel supply remain on an improving trajectory that should be reflected in a healthy rate environment,” Paddy Rodgers, CEO of Euronav, said.
The tanker shipping company said the results were affected by a number of exceptional non-cash items, including a capital loss of USD 3 million on the sale of the Suezmax Felicity despite being transacted at values well -above market.

Commenting on the market fundamentals, the company pointed to returning OPEC barrels, rising US exports and record Chinese imports, incentivized by the 35% fall in the price of crude during Q4, boosting usual Q4 seasonal uplift.

“US-China trade tensions have largely bypassed oil markets as US crude exports to China have diverted to similar ton mile destinations, e.g. South Korea, Japan and Taiwan. More recently direct US crude exports to China have restarted,” the company added.

Market Outlook
Even though recycling activity understandably slowed during the quarter, the large tanker fleet has matured with the average VLCC age in the global fleet rising 24% to 9,5 years since 2014, Euronav continued. This along with restricted access to capital for many operators implies time expired vessels will be a consistent feature going forward, driving a persistent level of recycling activity and restraining fleet growth....MORE
We last visited Euronav in June, 2018's "Euronav Just Bought the Second of Two Very-Ultra-Supertankers Left In the World":
File photo shows the ULCC TI Europe, one of two 3 million barrel capacity oil tankers currently in the world. Photo: Euronav