Transcript Presentation results fourth quarter 2016

Earnings Call Q4 2016
26 January 2017
1
Forward Looking Statements
Matters discussed in this presentation may constitute forward-looking statements under U.S. federal securities
laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the
Company’s current views with respect to future events and financial performance and may 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. All statements, other than statements of
historical facts, that address activities, events or developments that the Company expects, projects, believes or
anticipates will or may occur in the future, including, without limitation, the delivery of vessels, the outlook for
tanker shipping rates, general industry conditions future operating results of the Company’s vessels, capital
expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters,
are forward-looking statements. Although the Company believes that its expectations stated in this presentation
are based on reasonable assumptions, actual results may differ from those projected in the forward-looking
statements. 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 obligations
to us, the strength of the world economies and currencies, general market conditions, including changes in tanker
vessel charter hire rates and vessel values, changes in demand for tankers, changes in our vessel operating
expenses, including dry-docking, crewing and insurance costs, or actions taken by regulatory authorities, ability of
customers of our pools to perform their obligations under charter contracts on a timely basis, potential liability
from future litigation, domestic and international political conditions, potential disruption of shipping routes due to
accidents and political events or acts by terrorists. We undertake no obligation to publicly update or revise any
forward looking statement contained in this presentation, whether as a result of new information, future events or
otherwise, except as required by law. In light of the risks, uncertainties and assumptions, the forward looking
events discussed in this presentation might not occur, and our actual results could differ materially from those
anticipated in these forward-looking statements.
2
Agenda
1
Q4 2016 Highlights
2
Financial Review
3
Current themes
4
Outlook
5
Q&A
3
Highlights Q4 2016
Fourth quarter
2016
In USD per day
VLCC
Fourth quarter
2015
70000
VLCC
60000
33,161
61,482
50000
Average time charter rate*
43,833
41,776
40000
SUEZMAX
Average spot rate**
21,243
41,596
Average time charter rate*
24,662
36,042
USD/day
Average spot rate (TI Pool)
Q4 15
30000
20000
Q4 16
Cash
B/E
10000
0
* Including profit share where applicable
** Excluding technical off hire
Suezmax
2
3
4
45000
Rate environment – not typical Q4; seasonal overhang from Q3 but good
recovery into Q1 2017
40000
Q4 15
35000
Balance sheet management – sale & leaseback and refinancing of facility
FSO – letter of award for 5 year from end of current contract in Q3 2017
Outlook
Q1 VLCC so far: 48.5% fixed at 48,098 USD per day
30000
USD/day
1
25000
20000
15000
10000
5000
Q1 Suezmax so far: 41.5% fixed at 24,070 USD per day
4
0
Cash
B/E
Q4 16
Financial Highlights – Income Statement
HIGHLIGHTS
1
Q3 weaker rate legacy
impacting Q4
2
Exceptional gain USD 37m
from sale & leaseback
3
Indicative dividend USD 0.22
per share to be paid May
The most important key figures (unaudited) are:
Fourth
Quarter 2016
Fourth
Quarter 2015
Full Year
2016
Full Year
2015
Revenue and other operating income
147,743
226,798
691,261
853,933
Voyage expenses and commissions + charter hire expenses
Vessel operating expenses
General and administrative expenses
(19,401)
(37,361)
(11,418)
(22,394)
(38,812)
(16,122)
(77,273)
(160,199)
(44,051)
(97,086)
(153,718)
(46,251)
Net gain (loss) on disposal
of tangible assets
36,576
11,165
50,395
5,300
Net gain (loss) on disposal
of investments in equity
accounted investees
-
-
(24,150)
-
Depreciation
(59,125)
(54,896)
(227,709)
(210,206)
Net finance expenses
Share of profit (loss) of
equity accounted investees
Result before taxation
(16,095)
(9,799)
(44,849)
(47,630)
(in thousands of USD)
Tax benefit (expense)
Profit (loss) for the
period
Attributable to:
Owners of the company
Non-controlling interests
8,637
13,520
40,194
51,592
49,556
109,461
203,619
355,934
475
(4,602)
174
(5,633)
50,031
104,859
203,793
350,301
50,031
104,859
203,793
350,301
158,166,534
0.32
158,628,151
0.66
158,262,268
1.29
155,872,171
2.25
-
-
-
-
Information per share:
(in USD per share)
Weighted average number of shares (basic) *
Result after taxation
* The number of shares issued on 31 December 2016 is 159,208,949
Financial Highlights – Balance Sheet
2016
2015
dec/31
dec/31
206.6
131.5
0.1
0.1
166.7
243.4
86.1
93.9
2,383.2
2,288.0
203.9
283.8
3,046.7
3,040.8
Current liabilities
189.1
179.5
Long term debt
966.4
952.4
3.4
3.1
1,887.7
1,905.7
3,046.7
3,040.8
(in $ million)
Cash
Restricted cash
Other current assets
HIGHLIGHTS
1
Long term assets:
Newbuildings
Vessels
Other long term assets
Total assets
Other long term liabilities
Equity
Total liabilities and stockholders' equity
LIQUIDITY POSITION (31 DECEMBER 2016)
Cash & Cash equivalent (incl. share of JV):
USD
240m
Undrawn secured revolving facility
USD
297m
Undrawn unsecured credit line
USD
60m
Total Liquidity :
USD
597m
6
Leverage remains within
company imposed limits at
45% marked to market
(38% book value)
2
Liquidity position
strengthened – providing
optionality for cycle
3
Sale & Leaseback of 4 VLCCs
opens new option on funding
4
Refinancing of term loan
facility means Euronav credit
facilities mostly revolvers
5
Remaining CAPEX and Debt Capacity
(31 Dec 2016)
• Newbuilding Capex (2 VLCC + 2 Suezmax)
= USD 212m
• Total estimated lending capacity
• = USD 190m
Current themes – rates respectable; peak supply to come
9
120,000
Source: Clarkson’s
8
80,000
6
5
60,000
4
40,000
3
2
20,000
1
0
0
SEASONALITY- NORMAL,
MACRO – HIGHER OIL
PRICE, TRUMP
OPEC CUTS – SHORT TERM
IMPACT FROM LATE Q1
2017
INCREASED
CAPACITY/VESSELS
WITHOUT VETTINGS
OWNER SENTIMENT WEAK
7
VLCC freight rate
No of VLCC delivered per month
100,000
7
Current themes – incoming regulation a positive but not
a panacea; impact likely to be spread out
VLCC SCRAPPINGS VS. NO. OF VLCSS TURNING
15 AND 20 YEARS OLD
45
VLCC Scrapping Forecast
No. Of VLCCs turning 15 years old
40
No. Of VLCCs turning 20 years old
35
30
25
20
15
10
5
0
Source: DNB
Source: Gibsons
8
Outlook
1
Headwinds for 2017 – now 3 amber lights from 2 on last earnings call
2
Balance Sheet strengthened providing optionality to Euronav
3
Medium term structure for tanker markets positive
Demand for Oil
Supply of Oil
ROBUST
OPEC CUTS
COMING
Ton Miles
Vessel Supply
S/TERM
HEADWINDS
CHANGEABLE
L/TERM
MANAGEABLE
9
Financing
NEW BARRIER
TO ENTRY
Section 5
Q&A
10
5