Euronav NV - Earnings in red; losses to shrink over next two quarters
Earnings in red; losses to shrink over next two quartersEuronav NV (EURN) recently announced its 1Q21 results and it was the most challenging time for the company since 3Q18 as spot TCE rates of crude carriers remained under pressure. EURN’s operating revenue slumped 72.4% YoY to USD 115.8mn in 1Q21 from USD 419.9mn in 1Q20. Moreover, its TCE revenue also plunged 75.6% to USD 94.6mn from USD 387.3mn in the same quarter a year ago as
average spot TCE rates of VLCCs and Suezmaxes nosedived ~81% YoY to USD 14,000pd and USD 11,500pd respectively. This sharp decline in spot earnings of crude carriers was primarily due to lower crude oil transportation demand and ample tonnage availability on major trading routes. Operating expenses inched up 2.4% YoY to USD 157mn primarily due to an expanded fleet. The company’s EBITDA
crashed 93.2% YoY to USD 21.4mn in 1Q21 from USD 316.2mn in 1Q20. EURN reported a net loss of USD 71mn in 1Q21 compared with an elevated net profit of USD 225.6mn in 1Q20, which translates to a loss of USD 0.35 per share compared with an EPS of USD 1.05 in 1Q20. Although EURN’s earnings remained in the red in the past two quarters, we expect net losses to decline in 2Q21 as the demand for crude transportation is expected to improve gradually. We expect spot earnings of crude carriers to inch up that will improve revenue and reduce losses of EURN over the next two quarters. Going forward, the company is expected to register net profits in 4Q21, which will rise further in 1Q22. The crude tanker market bottomed out during 2H20 and we expect it to revive by 2H21.
Euronav is a provider of maritime shipping and offshore services engaged primarily in the transportation and storage of crude oil. As of Apr. 4, 2017, Co. owned and operated a modern fleet of 55 vessels (including four chartered-in vessels) with an aggregate carrying capacity of approximately 13.7 million deadweight tons, or dwt, consisting of 31 very large crude carriers, one ultra large crude carrier, 21 Suezmax vessels, and two floating, storage and offloading vessels. Co. has two operating segments: the operation of crude oil tankers on the international markets (tankers) and the floating production, storage and offloading operations.
Drewry, since 1970, has been providing research and advisory services on the global Maritime and Shipping industries and has established itself as a firm with long history of credibility and expertise on various aspects of the maritime industry. Leveraging this in-depth market knowledge and understanding, we have extended our offering to deliver a unique, independent investment research service on globally listed companies operating in the maritime industry. Under the brand Drewry Maritime Equity Research and in accordance with the FCA, DMER led by Rahul Kapoor and his team, offers fundamental analysis on listed companies. DMER analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. By combining these market-leading resources with seasoned sector expertise and commercial awareness, we are able to offer a highly differentiated and comprehensive investment research service to prospective investors in listed maritime companies. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.
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