2020 brought ups and downs for Belgian Euronav, which most recently saw one of the toughest tanker markets in modern times in the fourth quarter, and this has continued into the new year.
The coronavirus pandemic and a plunge in global oil demand contributed to a deficit of USD 58.3 million before taxes, according to the company’s interim report, published Thursday.
“(…) the return of 5-7 million bpd of crude consumption to be shipped would imply a requirement for circa 150 VLCCs”
Euronav in interim report
This stands in clear contrast to the beginning of 2020, when Euronav for the first six months reported a bottom line profit of USD 486,6 million.
In the beginning of 2021, the market remains unbalanced, with too many ships looking for cargoes. For the market to improve notably, a normalization in global oil consumption is needed, says CEO Hugo de Stoop.
“Whilst some encouraging signs are emerging, like the price of scrap steel driving the ship recycling activity, traction with crude consumption returning to more normalized pre-COVID-19 levels is required to drive a return to stock and sector profitability,” says the Euronav CEO in the report.
Around 150 supertankers could come into play
An increase in oil consumption will create more work for more supertankers, notes the report.
“(…) the return of 5-7 million bpd of crude consumption to be shipped would imply a requirement for circa 150 VLCCs,” writes Euronav.
The deficit of around USD 58.3 million before taxes for the fourth quarter represents a clear setback compared to the same period 2019, when the company reported a profit of USD 155.4 million.
However, the strong start to 2020 meant that Euronav bagged a large profit of USD 474.7 million for the full year, a significant improvement from USD 112.8 million in 2019.
From the beginning of 2021, Euronav has covered 46 percent of the VLCC spot fleet at USD 16,396 per day. For suezmaxes, a little over half the fleet is covered, 54 percent, at USD 9,207 per day.
The tough market at the start of the year also makes Euronav accelerate yard stays for a number of ships in its fleet. From the end of last year and the first quarter this year, the company plans for a total of 27 ships to visit docks.
The report also informs that Euronav will launch a share buyback program for USD 50 million.
English Edit: Daniel Logan Berg-Munch
Frontline and Euronav remain optimistic in spite of new oil peak scenarios
Euronav’s CEO points to hydrogen and ammonia as the fuel of the future
Euronav secures Poseidon-compliant loans and credits
