Euronav(US:EURN)2023-04-11 16:00Geopolitical Impact - The Russian invasion of Ukraine has significantly impacted global oil trade, with Russian crude oil exports remaining broadly unchanged despite losing approximately 1.8 million barrels per day in the European market [540]. - The EU ban on Russian crude imports was formalized in December 2022, extending to refined products as of February 2023, affecting shipping operations and insurance coverage for vessels carrying Russian oil [540][541]. - The company has suspended operations with Russian customers, which previously represented an insignificant portion of its turnover [730]. Financial Performance - In 2022, total shipping revenues increased by 117%, or $520.9 million, to $966.0 million compared to $445.1 million in 2021 [634]. - Voyage charter and pool revenues rose by 112%, or $388.8 million, to $737.3 million for the year ended December 31, 2022, compared to $348.4 million in 2021 [635]. - 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 in 2021 [635]. - Gains on disposal of vessels/other tangible assets surged by 538%, or $81.1 million, to $96.2 million in 2022 compared to $15.1 million in 2021 [634]. - Net gain on the sale of assets increased by 536%, or $80.7 million, to $95.8 million in 2022 compared to $15.1 million in 2021 [641]. Operating Expenses - Elevated inflation and rising interest rates in the US and Eurozone are driving up operating expenses, potentially increasing the cost of capital for the company [547]. - Voyage expenses and commissions rose by 47%, or $56.4 million, to $(175.2) million for the year ended December 31, 2022, compared to $(118.8) million in 2021 [639]. - Total vessel operating expenses decreased by 2%, or $4.6 million, to $216.1 million in 2022 from $220.7 million in 2021 [644]. - General and administrative expenses rose by 60%, or $19.3 million, to $51.7 million in 2022 compared to $32.4 million in 2021, primarily due to legal fees related to potential merger discussions [650][651]. - Net finance expenses increased by 31%, or $25.3 million, to $105.9 million in 2022 compared to $80.6 million in 2021, mainly due to higher interest expenses on financial liabilities [657][658]. Fleet and Asset Management - The carrying value of the fleet as of December 31, 2022, was $3,076.4 million, an increase from $2,967.8 million in 2021 [580]. - The total number of vessels decreased from 64 in 2021 to 61 in 2022, with VLCCs decreasing from 42 to 39 [580]. - The company sold the Suezmax Cap Charles for $41.4 million, resulting in a net gain of $22.1 million recorded in Q1 2023 [587]. - The company has 8 newbuildings on order as of December 31, 2022, compared to 4 newbuildings on order in 2020 [589]. - The company acquired two eco-VLCCs for a total of $179 million in cash, which are the latest generation of ecotype VLCCs [599]. Market Trends - The global demand for oil transportation is recovering, with 2022 oil demand averaging 100.5 million barrels per day, an increase of 2.2 million barrels compared to 2021 [733]. - The tanker orderbook is at historically low levels, with the VLCC orderbook equal to 3% of the fleet and Suezmax orderbook equal to 2% of the current fleet [735]. - The medium-term outlook for freight markets is positive, driven by increased crude exports from the Atlantic basin to the Far East [734]. - The price of marine fuels has increased due to the self-sanctioning of Russian oil flows, negatively impacting the cost structure of vessels [730]. Sustainability and Future Outlook - The company is focused on sustainability, considering the steel industry's commitment to carbon neutrality by 2050, which may positively impact the price of scrap steel [558]. - The company anticipates a trend of increased recycling of older vessels due to regulatory requirements, with 15% of the VLCC fleet and 19% of the Suezmax fleet being 18+ years old [735]. - The company aims to enhance digital transformation efforts, focusing on AI-driven fuel consumption optimization and Robotics Process Automation (RPA) projects [614][623]. Debt and Financing - Cash and cash equivalents increased to $179.9 million as of December 31, 2022, from $152.5 million as of December 31, 2021 [667]. - Total indebtedness as of December 31, 2022, was $1,795.6 million, a slight decrease from $1,807.9 million as of December 31, 2021 [673]. - The company expects to finance its funding requirements through cash on hand, operating cash flow, and various debt financing options [675]. - The company completed a $200.0 million senior unsecured bond issuance on September 2, 2021, with a coupon of 6.25% and maturing in September 2026 [695].