Euronav NV (NYSE:EURN) Q1 2024 Earnings Call Transcript May 8, 2024
Euronav NV isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Alexander Saverys: Welcome to the earnings call of Euronav and CMB.TECH. My name is Alexander Saverys. I’m the CEO of Euronav and CMB.TECH, and I’m joined by our CFO, Ludovic Saverys. We have a couple of topics we would like to touch upon with you today. We will start with our first quarter financials and highlights. We’ll then zoom in on the marine division and a market update per segment, our time charter performance and the market outlook, and then we’ll close with a conclusion and have time for questions-and-answers. I’d like to hand over to Ludovic.
Ludovic Saverys: Yes. Good afternoon, everybody, and thanks for joining this earnings call. We’re happy to share with you a strong result for Q1 within Euronav CMB.TECH. We did a net profit on the quarter of $495.2 million. There has been a significant uplift in profit, thanks to the capital gains on some sale of vessels, more notably the second half of the deal with Frontline, which was widely discussed previously. If we take the capital gains out, we have a nice underlying profit of $88 million for the quarter. At the same time, we were able to end the quarter with a very strong liquidity of over $1.2 billion. This is obviously even after the conclusion of the purchase of CMB.TECH, which was a highlight we will mention later on.
In our rewarding the shareholder strategy, there was already a distribution announced of $4.57. The board has concluded, based on the strong results of Q1, to propose to another special general meeting, in additional $1.15 distribution per share, which is again, going to be a mix of dividends and distribution out of issue premium as mentioned in the press release. At the same time, the company has also started a share buyback program within the latest months where we have concluded about 8 million shares purchased at around $15.50, which is another reward for our shareholders. On the business side, we have continued to optimize our fleet. We’ve added 10 – we’ve contracted 10 more new buildings and sold another three older tankers, as well as launching the inauguration of our first hydrogen production and refueling station in Africa, and an announcement of our first hydrogen-powered vessel in Africa.
Next slide, please. Zooming in on the various marine divisions, as a repeat, we have Euronav and the tankers, Bocimar dry bulk, Delphis with the container vessels, Bochem on the chemical tankers, and Windcat, which is our offshore wind division. The company has about 47 oceangoing vessels on the water, with another 45 new buildings on orders, as shown on the slide on the various divisions. On top of that, we have about 53 CTVs, which are small passenger craft bringing the engineers to the windmills, and 12 CTVs or CSOVs on order. On the bottom side of the slide, you can see the P&L breakeven of the various divisions as a mix. You can see that the Q1 time charter equivalent, we are well above all the P&L breakevens in all the divisions, which obviously is an explanation for the very profitable quarter we had in Q1.
In terms of guidance of Q2, we’ve also highlighted there that on the tanker side, we’re still around $46,000 on a roughly booked days in the tanker sides. $37,000 on the Nukes. I think this is one we like to highlight. We have a big order book on Newcastlemax super-eco vessels coming onstream that Alex will touch upon, but we are happy to say that we have already booked $37,000 on this fixed days in that quarter. We have a current backlog on contracts accumulated throughout the divisions of about $2 billion, which is testimony, I think, to the diversification and decarbonization strategy we’re trying to implement. Next slide. This is a highlight again for everybody to see what the strength of the platform is in terms of available days and open days for 2024, 2025, 2026, where we respectively have roughly 19,000 total days in 2024, 24,000 in 2025, and up to 30,000 total days in 2026.
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