Euronav NV(CMBT) - 2024 Q4 - Annual Report

Geopolitical Impact - The company reported a significant impact on oil trading due to the Russian invasion of Ukraine, with Russia losing approximately 1.8 million barrels per day in the European export market [513]. - The introduction of sanctions against Russia's energy sector has affected over 180 vessels and numerous oil traders, aiming to constrain Russia's financial capabilities amid geopolitical tensions [517]. - The Red Sea conflict has led to over 90% decrease in vessel transits through the Bab-el-Mandeb Strait year-over-year, prompting shipping companies to reroute vessels, increasing operational costs by adding approximately 15 days to journeys [519]. - Container ship trade patterns have been affected, with Red Sea transits accounting for over 20% of trade, resulting in a removal of over 12% of fleet capacity [520]. - The company has observed a 134% increase in traffic around the Cape of Good Hope due to rerouting from the Red Sea conflict [519]. Financial Performance - Total shipping revenues for the year ended December 31, 2024 were $1,625.9 million, a slight decrease of 0.3$1,630.9 million in 2023 [631]. - Voyage charter and pool revenues decreased by 36%, or $391.6 million, to$682.7 million in 2024, primarily due to a reduction in pool revenue [632]. - Time charter revenues increased by 60%, or $96.7 million, to$257.6 million in 2024, attributed to a higher number of vessels engaged in long-term time charters [633]. - Other operating income rose by 117%, or $27.3 million, to$50.7 million in 2024, mainly due to the sale of Euronav Ship Management Hellas and liquidated damages from vessel sales [634]. - Net gain on sale of assets increased by 70%, or $262.6 million, to$635.0 million in 2024, compared to $372.4 million in 2023 [636]. Operating Expenses - Total vessel operating expenses decreased by 14$31.4 million, to $199.6 million in 2024, primarily due to the sale of 24 VLCCs [639]. - General and administrative expenses increased by 24$15.2 million, to $77.8 million in 2024, mainly due to the acquisition of CMB.TECH [640][641]. - Depreciation and amortization expenses decreased by 25$55.0 million, to $166.0 million in 2024, attributed to the sale of vessels [643]. - Income tax expenses decreased by 68$4.1 million, to $1.9 million in 2024, compared to$6.0 million in 2023 [650]. Cash Flow and Indebtedness - Cash and cash equivalents decreased significantly from $429.4 million in 2023 to$38.9 million in 2024 [653]. - Net cash from operating activities decreased to $459.1 million in 2024 from$837.4 million in 2023, indicating a significant decline in cash flow due to reliance on the spot market and cyclical vessel rates [657]. - Total indebtedness increased to $2,622.3 million as of December 31, 2024, compared to$930.7 million in 2023, primarily due to the acquisition of CMB.TECH Enterprises [660]. - The company has a total interest-bearing debt of $2,635.9 million as of December 31, 2024, compared to$904.1 million in 2023, showing a substantial increase in leverage [662]. - Outstanding balances for the $1,290.0 million senior secured credit facility were$750.0 million in 2024, up from $415.7 million in 2023, reflecting increased borrowing [664]. Fleet Composition and Development - As of December 31, 2024, the total carrying value of the fleet is$2,783,068,000, an increase from $2,500,414,000 in 2023, reflecting a growth of approximately 11.3$1,456,325,000, down from 39 tankers valued at $1,629,570,000 in 2023, indicating a reduction of about 11$870,844,000 in 2023 to $165,583,000 in 2024, reflecting a significant reduction of approximately 81$96.9 million, resulting in a net gain of $27.5 million, recognized upon delivery on January 14, 2025 [563]. - The company sold 11 VLCCs for a total of$2.35 billion to Frontline, with the sale completed by the end of 2023 [618]. - The company sold three Suezmax vessels for a combined net sale price of $39.0 million,$38.2 million, and $42.3 million, generating a total capital gain of$71.1 million [622][623]. Financing and Credit Facilities - The company expects to finance its 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 [661]. - The company has secured multiple credit facilities totaling €3.5 million, €2.8 million, and $152.0 million among others, with a significant portion being senior secured credit facilities [705]. - The company maintains a cash balance of at least$30.0 million and an aggregate amount of cash and cash equivalents of at least $50.0 million or 5% of total indebtedness [705]. - The company’s financing agreements include change of control clauses that could be triggered by significant shareholder acquisitions [709]. - The company is required to maintain a ratio of net funded debt to total capitalization of no more than 70% [715].