Euronav NV - Earnings in red but set to improve in 2022
Euronav NV (EURN) recently announced its 4Q21 results, which was the most challenging one since 2015 as the realised spot TCE rates for its fleet was the lowest over the past seven years. EURN’s operating revenue declined by 11.7% YoY to USD 120.6mn in 4Q21 from USD 136.5mn in 4Q20. Consequentially its TCE revenue also plummeted by 22.1% to USD 85.3mn from USD 109.6mn in the samequarter a year ago as average spot TCE rates of VLCCs and Suezmaxes dropped by 39% and 10% YoY to USD 12,500pd and USD 11,300pd respectively. This sharp fall in spot earnings of crude carriers despite rising crude consumption was primarily due to drawdown of oil inventories, continued lack of crude oil trade volumes and ample tonnage availability on major trading routes. Meanwhile, operating
expenses inched up by 1.0% YoY to USD 147mn, primarily due to an expanded fleet. The company’s EBITDA plunged by 42.1% YoY to USD 24.3mn in 4Q21 from USD 41.9mn in 4Q20. EURN reported a net loss of USD 72.6mn in 4Q21 compared with a net loss of USD 58.2mn in 4Q20, which translates to a loss of USD 0.36 per share compared with a loss of USD 0.29 per share in 4Q20. Although
EURN’s earnings remained in the red in the past five quarters, the losses narrowed down and are expected to decline over the next year as demand for crude transportation is expected to improve gradually. Presently, the crude tanker market is under pressure because of inventory drawdown and moving forward, we expect the spot earnings of crude carriers to improve over next two years, which should
inturn prove favourable for the company’s topline.
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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