Euronav NV(CMBT) - 2022 Q4 - Annual Report

Oil Trade and Market Dynamics - The company reported a significant impact on oil trade due to the EU ban on Russian crude imports, with Russian exports losing approximately 1.8 million barrels per day in the European market but remaining broadly unchanged in 2023 [536]. - The company anticipates that the average ballast time will increase due to changes in trade routes for Russian oil, requiring more tonnage to move the same volume of cargo [540]. - The company is experiencing a shift in the tanker market dynamics due to the development of a "dark fleet" for Russian oil trade, which may affect mainstream fleet operations [537]. - The company is closely monitoring the implications of geopolitical events, such as the war in Ukraine, on the supply and demand of crude oil and tanker shipping [535]. - The global demand for oil transportation is expected to align with or exceed pre-COVID levels, with 2022 oil demand averaging 100.5 million barrels per day, an increase of 2.2 million barrels compared to 2021 [710]. - The company has suspended operations with Russian customers, which previously represented an insignificant portion of turnover [698]. Financial Performance - Total shipping revenues increased by 117%, or $520.9 million, to$966.0 million for the year ended December 31, 2022, compared to $445.1 million for 2021 [620]. - Voyage charter and pool revenues rose by 112$388.8 million, to $737.3 million for the year ended December 31, 2022, compared to$348.4 million for 2021 [621]. - Time charter revenues increased by 65%, or $46.1 million, to$117.4 million for the year ended December 31, 2022, compared to $71.3 million for 2021 [621]. - Gains on disposal of vessels/other tangible assets surged by 538$81.1 million, to $96.2 million for the year ended December 31, 2022, compared to$15.1 million for 2021 [622]. - The net gain on the sale of assets increased by 536%, or $80.7 million, to$95.8 million for the year ended December 31, 2022, compared to a net gain of $15.1 million for 2021 [627]. Operating Expenses and Costs - The company noted that elevated inflation and rising interest rates are affecting operating expenses and may lead to a higher cost of capital [542]. - Voyage expenses and commissions rose by 47$56.4 million, to $(175.2) million for the year ended December 31, 2022, compared to$(118.8) million for 2021 [625]. - Total vessel operating expenses slightly decreased by 2%, or $4.6 million, to$216.1 million during the year ended December 31, 2022, compared to $220.7 million for 2021 [630]. - General and administrative expenses increased by 60$19.3 million, to $51.7 million for the year ended December 31, 2022, compared to$32.4 million for 2021 [634]. - Net finance expenses recognized in profit or loss increased by 31%, or $25.3 million, to$105.9 million for the year ended December 31, 2022, compared to $80.6 million for 2021 [641]. Fleet Management and Development - The carrying value of the fleet as of December 31, 2022, was$3,076,393,000, an increase from $2,967,787,000 in 2021 [573]. - The total number of vessels decreased from 71.5 in 2021 to 64.0 in 2022, with 12.5 vessels disposed of during the year [580]. - The company has three newbuilding VLCCs scheduled for delivery in Q1 2023, costing$186 million in total [585]. - The company acquired two eco-VLCCs for $179 million in total cash, enhancing its fleet with the latest generation of vessels [587]. - The company has five newbuilding Suezmaxes contracted for a total cost of$199.2 million, with deliveries expected in late 2023 and early 2024 [586]. Cash Flow and Liquidity - Net cash from operating activities for the year ended December 31, 2022 was $255.6 million, a significant improvement compared to$(25.3) million for the year ended December 31, 2021 [653]. - The company expects continued volatility in market rates for vessels, affecting short- and medium-term liquidity [648]. - The company has sufficient working capital resources to meet its requirements for the next 12 months from the date of the annual report [654]. - The company expects to finance its funding requirements through cash on hand, operating cash flow, and bank debt, with potential alternatives including raising equity or selling assets if cash flow is insufficient [655]. Debt and Financing - Total indebtedness as of December 31, 2022 was $1,795.6 million, slightly down from$1,807.9 million as of December 31, 2021 [654]. - The outstanding balance on the $713.0 million Sustainability Linked Senior Secured Credit Facility was$350.8 million as of December 31, 2022, down from $524.1 million as of December 31, 2021 [666]. - The outstanding balance on the$200.0 million Senior Secured Credit Facility was $90.0 million as of December 31, 2022, compared to$55.0 million as of December 31, 2021 [662]. - The company has a new €80 million ($100 million) unsecured revolving credit facility, which includes sustainability and emission reduction components in its margin pricing [667]. - The Group's credit facilities contain financial covenants requiring a minimum cash balance of at least$30.0 million and a stockholders' equity to total assets ratio of at least 30% [680]. Regulatory and Environmental Adaptation - The company is adapting to regulatory changes such as IMO 2020, which reduces sulfur emissions from ships, impacting operational practices [535]. - The new credit facilities are linked to sustainability performance, allowing for interest rate reductions upon achieving specific sustainability KPIs [669]. Strategic Focus and Relationships - The company is focusing on maintaining and growing customer relationships as a key factor for future operational success [535]. - The company is actively pursuing a constructive dialogue with Famatown, which holds 24.99% of the shares outstanding [705].