Euronav NV(CMBT) - 2021 Q4 - Annual Report

COVID-19 Impact - The company faced significant challenges in crew changes due to COVID-19, resulting in additional costs of $1.2 million and lost revenues of$0.9 million[457]. - The tanker market started weak in 2022, impacted by ongoing oil supply issues and the lingering effects of the COVID-19 pandemic[458]. - The company reported a total of 97.7 days impacted by COVID-19, with specific segments experiencing 31.4 days for Suezmax and 66.3 days for VLCC, leading to additional costs of $0.2 million and$1.0 million respectively[464]. - The company continues to monitor the economic impact of COVID-19 on oil demand and its operations, making future financial results difficult to quantify[460]. - Current forecasts indicate that overall tanker demand is expected to rise above pre-pandemic levels next year[459]. Financial Performance - Total shipping revenues decreased by 65%, or $790.4 million, to$430.0 million for the year ended December 31, 2021, compared to $1,220.5 million for 2020[538]. - Voyage charter and pool revenues decreased by 68$749.2 million, to $348.4 million for the year ended December 31, 2021, compared to$1,097.6 million for 2020[539]. - Time charter revenues decreased by 37%, or $41.4 million, to$71.3 million for the year ended December 31, 2021, compared to $112.7 million for 2020[539]. - Revenue for 2021 was weak, below 2020 rates and breakeven levels, with a net loss of$(118.8) million compared to $(125.4) million in 2020[543]. - Net gain on sale of assets decreased by 34$(7.7) million, to $15.1 million in 2021 from$22.7 million in 2020[544]. Vessel and Fleet Information - The carrying value of the fleet as of December 31, 2021, was $2,967,787,000, an increase from$2,865,308,000 as of December 31, 2020[491]. - The fleet consisted of 64 vessels as of December 31, 2021, including 42 VLCCs and 22 Suezmax vessels[491]. - The estimated market values of certain vessels may have declined below their carrying amounts, with six VLCCs having an aggregate carrying value exceeding market value by approximately $44.9 million as of December 31, 2021[494]. - The company has newbuilding contracts for two eco-Suezmax vessels at a total cost of$113 million, expected for delivery in January 2022[500]. - The company has a total of eight newbuildings on order as of December 31, 2021, compared to four as of December 31, 2020[496]. Expenses and Costs - Total vessel operating expenses increased by 1%, or $2.3 million, to$220.7 million in 2021 compared to $218.4 million in 2020[548]. - Time charter-in expenses increased by 7$0.5 million, to $8.5 million in 2021 compared to$8.0 million in 2020[552]. - General and administrative expenses decreased by 13%, or $4.9 million, to$32.4 million in 2021 compared to $37.3 million in 2020[554]. - Depreciation and amortization expenses increased by 8$25.2 million, to $345.0 million in 2021 compared to$319.8 million in 2020[560]. - Finance expenses increased by 4%, or $4.0 million, to$95.5 million in 2021 compared to $91.6 million in 2020[563]. Debt and Financing - Total indebtedness increased from$1,375.5 million as of December 31, 2020, to $1,807.9 million as of December 31, 2021, representing a growth of approximately 31.3$1,691.7 million, up from $1,227.2 million as of December 31, 2020, indicating a year-over-year increase of about 37.8$713.0 million Sustainability Linked Senior Secured Credit Facility rose from $185.0 million in 2020 to$524.1 million in 2021, reflecting a significant increase of approximately 183.8%[590]. - The company plans to finance funding requirements through cash on hand, operating cash flow, and various debt financing options, including potential equity raises or asset sales if cash flow is insufficient[580]. - The company has a total of 41% of its commercial bank financing linked to sustainability components as of December 31, 2021[591]. Strategic Initiatives - The company is focused on sustainability and the potential positive impact on scrap steel prices from end-of-life vessels due to the steel industry's commitment to carbon neutrality by 2050[471]. - The company has implemented the FAST platform on 30 vessels, with plans for full implementation across all vessels in 2022[520]. - The company has retrofitted 10 vessels with Variable Frequency Drives (VFDs) to reduce electrical power consumption[516]. - The company acknowledges increased cybersecurity risks and has implemented appropriate mitigating actions[619]. - Regulatory requirements for low sulfur fuel and EEXI compliance starting in 2023 may lead to older vessels being removed from the trading fleet[626]. Market Outlook - Global oil demand is expected to increase by 4.6 million barrels per day in 2022 compared to 2021, approaching pre-COVID levels[624]. - The tanker market is currently experiencing pressure from reduced demand, but the outlook for the remainder of 2022 is more positive with expected increases in freight levels[625]. - The VLCC orderbook is currently 8% of the fleet, while the Suezmax orderbook is 6% of the fleet, indicating a measured supply of tankers[626]. - A $1,000 increase in spot tanker freight rates would have increased profit by$21.3 million in 2021[877]. - 14% of the VLCC fleet and 17% of the Suezmax fleet are over 18 years old, prompting potential divestment considerations by shipowners[626].