Euronav(US:EURN)2024-04-10 22:34Global Oil Trade Impact - The Russian invasion of Ukraine has significantly impacted global oil trade, with Russia losing approximately 1.8 million barrels per day in the European export market but maintaining exports to India and China [491]. - The EU ban on Russian crude imports has led to the development of a "dark fleet" to facilitate Russian oil trade, which is expected to tighten fleet supply and benefit the international spot fleet [492][494]. - 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 are expected to increase ton-miles and positively affect freight rates [497]. 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 [597]. - Voyage charter and pool revenues rose by 46%, or $336.9 million, to $1,074.2 million for the year ended December 31, 2023, driven by improved freight rates [598]. - Gains on disposal of vessels increased by 289%, or $276.6 million, to a net gain of $372.4 million for the year ended December 31, 2023, compared to a net gain of $95.8 million for 2022 [602]. - Total vessel operating expenses increased 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 [606]. - General and administrative expenses rose by 21%, or $10.8 million, to $62.5 million for the year ended December 31, 2023, compared to $51.7 million for 2022 [610]. - Finance income increased by 147%, or $40.0 million, to $67.2 million for the year ended December 31, 2023, compared to $27.1 million for 2022 [615]. Vessel Operations and Valuation - The company has reassessed the residual value of its vessels, changing it from nil to a value based on lightweight tonnage multiplied by forecast scrap value per ton [509][512]. - The useful economic life of vessels is estimated at 20 years, with FSO service vessels having an estimated life of 30 years, and contracts extended until 2032 [505][520]. - The average ballast time for vessels engaged in Russian oil trade is expected to increase, requiring more tonnage to move the same volume of cargo [495]. - The carrying value of VLCCs decreased from $2,229,373,000 in 2022 to $712,107,000 in 2023, while Suezmax values increased from $615,982,000 to $720,706,000 [533]. - The estimated future cash flows for vessels with market value declines are expected to exceed their carrying values, indicating no impairment required as of December 31, 2023 [532]. Fleet Development and Acquisitions - The company sold 24 VLCC tankers for a total of $2.35 billion, with 11 delivered before December 31, 2023, and 13 booked as assets held for sale with a total carrying value of $862.6 million [538]. - The company announced the purchase of two eco-VLCCs for a total of $179 million, enhancing its fleet with the latest generation vessels [549]. - The acquisition of the remaining 50% in TI Asia and TI Africa was completed, consolidating full ownership of the FSO platform [550]. - Two Suezmax newbuilding contracts were signed with Daehan Shipbuilding, with vessels scheduled for delivery in Q3 2024 [551]. - The company has 5 newbuildings on order as of December 31, 2023, down from 8 in 2022 [542]. Market Trends and Economic Factors - The global demand for oil transportation is significantly influenced by the recovery of the global economy post-COVID-19, impacting oil demand [686]. - There is a notable increase in crude oil exports from the US Gulf and Atlantic producers, primarily destined for China and India, leading to longer employment times for crude tankers [687]. - The freight markets have returned to positive territory, with a medium-term outlook indicating continued positive trends [687]. - The supply of tankers is affected by vessel deliveries, removals, and alternative employment, with potential for increased recycling in the near term [688]. Debt and Financing - Total indebtedness decreased from $1,696.3 million in 2022 to $930.7 million in 2023 [632]. - The company had $813.4 million in available committed secured revolving credit facilities as of December 31, 2023, compared to $671.3 million in 2022 [629]. - A new $1,290.0 million secured loan facility was established on November 7, 2023, to refinance 30 vessels and finance newbuilding projects [636]. - The company is required to maintain a Debt Service Cover Ratio of at least 1.1x in connection with its senior secured FSO loan of $150 million [651]. Shareholder Actions - The company plans to propose a distribution of $4.57 per share to shareholders at the Annual Shareholders' Meeting on May 16, 2024 [672]. - As of March 15, 2024, the company held 88.61% of the outstanding shares following a mandatory public takeover bid by CMB NV [671].