AGM Presentation Paddy Rodgers, CEO May 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 Company Overview & Financials 1 Current Industry Dynamics 2 Our Strategy 3 Current Themes 4 Outlook for 2017 5 3
Section 1 Company Overview and Financials 2 4
Euronav is the largest tanker company in the world INTRODUCTION FINANCIAL SUMMARY (USDm) • Leading provider of transportation and storage of Net interest bearing debt Adj. EBITDA crude oil 1,235 • The largest tanker ship owner in the world with a fleet of modern high quality tankers 921 • Best-in-class fully-integrated operating platform 830 • Strong relationships to oil majors and leading energy 648 companies 504 • Conservative financing strategy with a strong balance 239 sheet and high liquidity • Head quartered in Antwerp with ca 180 employees shore side and globally 3,000 seafarers 2014 2015 2016 • Listed on NYSE (TICKER: EURN) with a market capitalization of USD ~1.3 billion (as of 9 May 2017) Purchased 2 VLCCs Purchased 19 VLCCs IPO NYSE 4 Suezmax on 7 year Purchased 4 VLCCs TCE CURRENT FLEET – TOTAL 55 VESSELS – 13.7 MM DWT 1 V – PLUS (2) 2 FSO 19 SUEZMAX (+2 NBs) 31 VLCC Over 441,000 DWT 380k barrels Up to 330,000 DWT 150,000 – 165,000 DWT Only 4 in world fleet Stripped water capacity 1MM barrels 2MM barrels 3 MM barrels 2.8 MM barrels 5 1. Adjusted EBITDA (a non-IFRS measure) represents operating earnings including the share of EBITDA of equity accounted investees before interest expense, income taxes and depreciation expense attributable to Euronav 2. Only 4 V-Plus vessels in world fleet
2016 – Year of Consolidation Q1 Q2 Q3 Q4 Full Year In USD million EBITDA 185.0 113.6 74.6 130.1 503.3 Net Income 113.5 40.1 0.07 50.0 203.7 EPS c per share 72.0 25.0 0.0 32.0 129.0 ACTIVE PORTFOLIO MANAGEMENT A YEAR OF TWO HALVES Suezmax and VLCC Joint Ventures Very strong 1h with challenging but consolidated profitable 2h 1 2 Fleet renewal - 2 VLCCs resales bought Robust market fundamentals continued into September 2016 2017 DIVIDEND – COMMITMENT DELIVERED EXTENDING POOLING TO SUEZMAX SECTOR Policy to return 80% net income* - delivered Marketing Joint Venture established May 2016 3 4 May 2016: $ 0.82 Sept 2016: $ 0.55 May Diamond S Shipping & Frontline partners - 40 2017: $ 0.22 vessels in total 6 * Pre capital gains.
Highlights – Q1 2017 VLCC In USD per day First quarter 2017 First quarter 2016 70000 VLCC 60000 Q1 16 40,528 60,638 Average spot rate (TI Pool) 50000 Average time charter rate* 41,147 40,847 40000 USD/day Q1 17 SUEZMAX 30000 Cash 20000 23,957 38,386 Average spot rate** B/E 10000 Average time charter rate* 23,880 32,251 0 * Including profit share where applicable ** Excluding technical off hire Suezmax 45000 1 Respectable Q1 rate performance – ahead of Q4 2016 ($33k VLCC 40000 & $21k Suezmax for Q4 2016) 35000 Q1 16 2 Increased ton miles reflected in more Atlantic to Far East activity 30000 25000 USD/day 3 Q1 17 Challenging rate environment Q2; seasonality & OPEC cuts begin to bite 20000 Cash B/E 15000 10000 4 Outlook Q2 VLCC so far: 42% fixed at 32,000 USD per day 5000 0 Q2 Suezmax so far: 47% fixed at 22,000 USD per day 7
Financial Highlights – Balance Sheet BALANCE SHEET HIGHLIGHTS Leverage: 2017 2016 1 mrt/17 dec/31 43% marked to (in $ million) market (36% book Cash 106.6 206.6 value) Restricted cash 0.1 0.1 Other current assets 179.1 166.7 Long term assets: Newbuildings 12.5 86.1 Liquidity position 2 Vessels 2,503.4 2,383.2 Further strengthened Other long term assets 212.7 204.2 – providing optionality Total assets 3,014.5 3,046.9 for cycle Current liabilities 174.4 189.1 Long term debt 913.9 966.4 Other long term liabilities 3.6 3.4 CAPEX and newbuild debt 3 Equity 1,922.6 1,887.9 capacity (current) Total liabilities and stockholders' equity 3,014.5 3,046.9 • Newbuilding Capex (4 Suezmax w/ contracts) = USD 236m LIQUIDITY POSITION (31 MARCH 2017) • Total estimated lending capacity Cash & Cash equivalent (incl. share of JV): USD 149m = USD 175m Undrawn secured revolving facility USD 411m Undrawn unsecured credit line USD 60m Total Liquidity : ca. USD 620m 8
Section 2 Current Industry Dynamics 5 9
Oil Tankers – 5 key medium term drivers Vessel Supply S/TERM Financing & Demand for Oil Supply of Oil Ton Miles HEADWINDS Regulation BALANCED CHANGEABLE ROBUST L/T NEW BARRIER MANAGEABLE TO ENTRY • Oil demand growing ONLY IF • Atlantic sourced • OPEC cut = Non OPEC last 25 years with yearly barrels been replaced by OWNERS ARE increase supply • New regulations average 1.1 mbpd primarily by Middle East DISCIPLINED (Basel 3 & 4) restricting supply reducing ton • USA production shale lending miles • IEA forecast 1.4 mbpd New Swing Producer pa growth 2017 • Seasonal trends very resilient & impacted by factors • Distress in shipping • USA crude exports to responsive increasing tonnage loans has reduced risk increase ton miles from • Only 2 negative years appetite 2017 of growth since 1990 for • Contracting rate fallen • OPEC cuts may have global crude demand substantially & shipyards impact but for how under reform pressure long? 1 2 3 5 4 Assuming no 10 speculative building
Demand for Oil – robust and steady 1 THE IEA ESTIMATES FOR OIL Y/Y CHANGE IN GLOBAL DEMAND FOR OIL Demand growth (million bpd) Average 1.1 million barrels per day 3.5 Million barrels per day 3.1 3.1 1.8 3 2.5 1.6 1.9 2.0 1.6 2 1.8 1.7 1.5 1.6 1.6 1.5 1.5 1.4 1.5 1.3 1.1 1.4 1.4 1.0 1.0 1.0 1.4 1.4 1.4 1 0.8 0.7 0.7 0.8 0.7 1.3 0.5 0.5 0.3 0.3 0.3 1.2 0 1.2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -0.5 -0.7 -1 -0.9 1 OIL PRICE OUTLOOK 0.8 Lack of disruption/market 90 share game Demand Destructive 80 0.6 70 Neutral USD per barrel 60 0.4 Demand 50 stimulating 40 0.2 30 20 Demand/supply Disruptive 0 Capex cuts in 10 E&P Nov 16 Dec 16 Jan 17 Feb 17 0 2016 forecast for oil demand 2017 forecast for oil demand 2015 2016 2017 2018 2019 2020 2021 2022 2023 11 Source IEA, McQuilling, Bernstein, Barclay, Petrowin and Bloomberg
Supply of oil – driven by Shale & new supplier dynamics 2 SHALE OIL SPEED TO PRODUCTION IS KEY MOST SHALE PRODUCTION KICKS IN AGAIN @ USD 50 90 Average field development (approval to start up) time by resource USD [years, selected areas] 80 70 5.7 60 5.0 4.6 50 4.4 40 3.5 3.3 3.1 3.0 30 2.5 20 10 0.6 0 Source SBC Analysis, Rystad Source CLSA GLOBAL OIL SUPPLY IS GROWING OIL SUPPLY ELEVATED BUT PRICE CAPPED mbpd 98,000 96,000 94,000 92,000 90,000 88,000 86,000 84,000 2012 2013 2014 2015 2016 2017 12 Source Economist Source IEA
Recommend
More recommend