Euronav NV(CMBT) - 2023 Q4 - Annual Report

Oil Trading and Market Impact - The company reported a significant impact on oil trading due to the EU ban on Russian crude imports, which began in December 2022, resulting in a loss of approximately 1.8 million barrels per day in the European export market[508]. - The company anticipates that the re-routing of Russian crude oil will lead to increased demand growth, particularly benefiting oil exports to India and China[508]. - The company noted that nearly 10% of global seaborne crude oil transited the Bab-el-Mandeb strait last year, with 52% being Russian crude, and disruptions in this area could lead to increased freight rates due to longer shipping routes[513]. - The company is closely monitoring the impacts of the EU embargo on Russian oil and the development of a "dark fleet" to cover Russian business, which may affect overall fleet supply and trading patterns[509]. Financial Performance - Total shipping revenues increased by 69%, or $664.9 million, to$1,630.9 million for the year ended December 31, 2023, compared to $966.0 million for 2022[607]. - Voyage charter and pool revenues rose by 46$336.9 million, to $1,074.2 million for the year ended December 31, 2023, driven by improved freight rates[608]. - Time charter revenues increased by 37$43.5 million, to $160.9 million for the year ended December 31, 2023, due to a higher number of vessels in long-term charters[609]. - Net gain on sale of assets increased by 289$276.6 million, to $372.4 million for the year ended December 31, 2023, compared to a net gain of$95.8 million for 2022[612]. Vessel Operations and Fleet Management - The company sold 24 VLCC tankers for a total of $2.35 billion, with 11 delivered before December 31, 2023, and 13 booked as held for sale with a total carrying value of$862.6 million[553]. - The fleet development shows a decrease in VLCCs from 40 at the start of 2023 to 34 at the end, with 6 acquisitions and 12 disposals during the year[557]. - The company has 5 newbuildings on order as of December 31, 2023, down from 8 in 2022[557]. - The carrying value of VLCCs decreased from $2,229,373,000 in 2022 to$712,107,000 in 2023, reflecting significant market volatility[548]. Expenses and Financial Liabilities - Total vessel operating expenses rose by 7%, or $14.9 million, to$231.0 million during the year ended December 31, 2023, primarily due to the acquisition of FSO Asia and FSO Africa[614]. - General and administrative expenses increased by 21%, or $10.8 million, to$62.5 million for the year ended December 31, 2023, attributed to higher legal and service fees[618]. - Finance expenses rose by 29%, or $38.9 million, to$171.9 million for the year ended December 31, 2023, primarily due to increased interest expenses on financial liabilities[623]. Cash Flow and Indebtedness - As of December 31, 2023, cash and cash equivalents amounted to $429.4 million, up from$179.9 million as of December 31, 2022[630]. - Net cash from operating activities for the year ended December 31, 2023 was $837.4 million, compared to$255.6 million for the year ended December 31, 2022[636]. - Total indebtedness decreased from $1,696.3 million as of December 31, 2022 to$930.7 million as of December 31, 2023[637]. - The company entered into a $1,290.0 million secured loan facility on November 7, 2023, to refinance 30 vessels and finance four newbuilding Suezmax vessels[640]. Strategic Initiatives and Partnerships - The company has established a centralized big data platform for sensor data collection across all vessels, enhancing operational efficiency and decision-making capabilities[586]. - A strategic partnership with ZeroNorth was announced to enhance the FAST digital platform, ensuring continued growth and innovation in maritime digitalization[593]. - The company completed the acquisition of 100$1.150 billion in cash, enhancing its fleet and aligning with its strategy for diversification and decarbonization[665][676]. Shareholder Returns and Financial Obligations - The company proposed a distribution of $4.57 per share to shareholders, combining a dividend and repayment from the share issue premium[670]. - The company recognized a financial liability of$124.4 million related to the sale and leaseback of three VLCCs, which were repurchased in 2023[650]. - The company has a purchase obligation of $7.39 million at the end of the bareboat contract for the Suezmax Cypress, with an outstanding amount of$75.7 million as of December 31, 2023[651]. Market Conditions and Future Outlook - The company anticipates sustained production cuts from OPEC+ into 2024, which may lead to a plateau in cargo counts[603]. - The large tanker market has shown resilience, with demand returning to pre-pandemic levels, although growth in 2024 may be limited[606]. - The tanker orderbook is at historically low levels, with VLCC orderbook at 5% and Suezmax orderbook at 13% of the current fleet[684]. Risk Factors and Financial Controls - The company’s assumptions regarding future cash flows are highly subjective and may change materially, impacting the evaluation of potential impairments[542]. - The company maintains effective internal control over financial reporting as of December 31, 2023, based on COSO criteria[937]. - There were no changes in internal controls over financial reporting that materially affected the company during the reporting period[943].