Cmb.Tech (NYSE:CMBT) Q4 2025 Earnings call February 26, 2026 08:00 AM ET Company ParticipantsAlexander Saverys - CEOChristophe Savi - SVP and Head of the NH3 divisionEnya Derkinderen - Brand ManagerFrode Mørkedal - Managing Director and Equity ResearchJoris Daman - Head of Investor Relations and ESGLudovic Saverys - CFOPetter Haugen - Head of Shipping ResearchConference Call ParticipantsClément Moulin - Sell-side AnalystNone - AnalystNone - AnalystAlexander SaverysGood afternoon, and welcome to the CMB.TECH ...

Financial Highlights - CMB.TECH reported a net gain of USD 90.1 million or USD 0.31 per share for Q4 2025, compared to a net gain of USD 93.1 million or USD 0.48 per share in Q4 2024 [2][6] - EBITDA for Q4 2025 was USD 322.1 million, significantly higher than USD 180.4 million in Q4 2024 [2][6] - Revenue for Q4 2025 reached USD 589.1 million, up from USD 226.0 million in Q4 2024 [5] Fleet Highlights - The company’s contract backlog increased by USD 304 million to USD 3.05 billion, with new charters for Capesize vessels and a CSOV [6][22] - CMB.TECH sold eight VLCCs at high prices, generating a total capital gain of approximately USD 261.1 million in Q1 2026 [4][24] - The company delivered six newbuilding vessels, including VLCCs and chemical tankers, during Q4 2025 and early 2026 [6][25] Corporate Highlights - CMB.TECH declared an interim dividend of USD 0.16 per share, expected to be paid on or about 27 April 2026 [13] - The company fully repaid a bridge loan facility related to the acquisition of a stake in Golden Ocean, resulting in a one-off charge of USD 13.6 million [12][20] - Management changes included the resignation of Mr. Benoit Timmermans from the Management Board, effective May 1, 2026 [21] Market Outlook - The tanker market remains strong, with VLCC spot earnings averaging USD 102,414 per day in Q4 2025, more than double the 10-year Q4 average [36] - Dry bulk freight rates have also held up well, with Capesize spot earnings averaging about USD 27,120 per day in Q4 2025, 34% higher than the 10-year Q4 average [26][40] - The company is investing in the Chinese ammonia supply chain, partnering with CEEC Hydrogen Energy to support maritime decarbonization [18][19]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported revenues of $176 million and an EBITDA-equivalent cash flow of $109 million, with a total EBITDA of $450 million over the past 12 months, indicating strong operational stability [3][12] - The net result for the quarter was a loss of approximately $4.7 million or $0.04 per share, impacted by non-recurring and non-cash items [16] Business Line Data and Key Metrics Changes - Charter revenue from the fleet was approximately $176 million, with the container fleet contributing around $81 million, the car carrier fleet generating approximately $26 million, and the tanker fleet generating about $42 million [14] - The overall utilization of the shipping fleet in Q4 was about 98.6%, with adjusted utilization at 99.8% when accounting for unscheduled technical off-hire [12] Market Data and Key Metrics Changes - The tanker market has seen unprecedented consolidation, with high charter rates expected to positively impact the Suezmax market [8] - The company noted a significant increase in the spot market rates, with the TD20 index rising by 20% in a short period, indicating a strong market outlook [24] Company Strategy and Development Direction - The company aims to build a diversified maritime infrastructure with a high-quality fleet and has secured long-term agreements with strong counterparties [3] - The strategy includes focusing on long-term charters and maintaining a strong charter backlog of approximately $3.7 billion, with two-thirds contracted to investment-grade counterparties [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about securing new employment for the Hercules rig, citing recent industry developments that support higher day rates and extended contract durations [9] - The company remains disciplined in capital deployment, focusing on sustainable cash flows and long-term deals, while also being open to opportunities across various segments [27][30] Other Important Information - The company declared its 88th consecutive dividend of $0.20 per share, representing a dividend yield of around 9% [9][17] - The company has a solid liquidity position with cash and cash equivalents totaling approximately $151 million and an additional $46 million available on credit facilities [16][17] Q&A Session Summary Question: Thoughts on Suezmax vessels and long-term contracts - Management finds the Suezmax market interesting and is optimistic about securing long-term charters, while also benefiting from the strong spot market [20][24] Question: Dividend sustainability and market outlook - The board does not provide guidance on dividends but emphasizes the importance of sustainable cash flows and disciplined capital deployment [27][30] Question: Updates on terminated charters and spot market fixtures - Previous contracts had rates around $27,000 per day, and the current spot market is strong, with rates for modern Suezmax tankers expected to be in the high 40s [34][35] Question: Status of Hercules rig and market dynamics - The Hercules rig has been idle since November 2024, but management sees signs of improving market dynamics and potential employment opportunities [42] Question: Long-term revenue mix and strategic direction - The company is not focused on a single segment but aims to position itself as a logistics partner across various shipping segments, including containers and tankers [44][45]

Financial Data and Key Metrics Changes - In Q3, the company reported a TCE income of $247 million, with an adjusted EBITDA of $150.5 million, leading to a net profit of $91.5 million or $18 per share [15][16] - The company has a dividend payout ratio of 80% of net profit, resulting in a distribution of $73.2 million or $14.7 per share for this quarter [16][24] - The company sold four older MR vessels, with three recognized in Q4 and one in the current quarter [21] Business Line Data and Key Metrics Changes - The company operates a fleet of 126 vessels, including 117 owned and nine long-term time chartered vessels, with a focus on product and chemical tankers [6][7] - The company has eight commercial pools managing over 200 ships globally, enhancing operational scale and efficiency [7] Market Data and Key Metrics Changes - The company has booked 71% of its bookings for Q4 as of mid-November, indicating an improvement in rates, with current bookings around $26,040-$25,600 [29] - The company experienced 230 extra dry docking days in Q3 due to a significant number of ships requiring maintenance, which is expected to taper off in the current quarter [30] Company Strategy and Development Direction - The company is focused on strategic growth through acquisitions, joint ventures, and fleet modernization, including a recent agreement to purchase 14.1 million shares of TORM [10][22] - The company aims to maintain a low-cost operation with a strong focus on shareholder distributions, linking its balance sheet strength to its dividend policy [8][9] Management's Comments on Operating Environment and Future Outlook - Management noted that Q3 is typically a weaker quarter for product tankers, but this year saw a strong market due to increased ton miles and tighter supply from sanctioned vessels [15] - The management expressed optimism about the winter market, citing a tight tonnage situation and refinery closures in Europe leading to increased demand for their services [49][50] Other Important Information - The company is actively monitoring geopolitical developments, including the situation in the Red Sea and the impact of Russian oil transportation dynamics on the market [39][43] - The company is cautious about the potential return of Venezuelan oil exports and its implications for the market [45] Q&A Session Summary Question: What is the status of the TORM share purchase? - The company is awaiting the appointment of a new independent board chair at TORM to finalize the transaction [22][28] Question: How does the company view the impact of the Red Sea reopening? - Management believes the reopening may not significantly impact the market, as the dynamics of traffic and supply have already adjusted [40][41] Question: Why has the order book fallen in Q3? - The decline in the order book is attributed to a shift of vessels into dirty trades rather than an increase in scrapping [51] Question: What is the company's strategy regarding fleet renewal? - The company is focusing on extending the life of existing vessels rather than ordering new builds at high prices, while remaining open to opportunities for fleet purchases or M&A [54][55]

Financial Data and Key Metrics Changes - In Q3, the company reported a TCE income of $247 million, with an adjusted EBITDA of $150.5 million, leading to a net profit of $91.5 million or $18 per share [16][17] - The company has a dividend payout ratio of 80% of net profit, resulting in a distribution of $73.2 million or $14.7 per share [17][18] - The company has paid dividends consistently over the last 15 quarters, with a projected dividend of $1.16 per share for 2024 [9][17] Business Line Data and Key Metrics Changes - The company operates a fleet of 126 vessels, including 117 owned and nine long-term time chartered vessels, with a focus on product and chemical tankers [6][7] - The company has seen a strong market in Q3, contrary to typical seasonal trends, due to increased ton miles and tighter supply from sanctioned vessels [16] Market Data and Key Metrics Changes - As of mid-November, the company had booked 71% of its bookings for Q4, indicating an improvement in rates, with current bookings around $26,040-$25,600 [30][31] - The company experienced 230 extra dry docking days in Q3, impacting operations, but this is expected to taper off in the current quarter [31] Company Strategy and Development Direction - The company is focused on strategic growth through acquisitions, joint ventures, and fleet modernization, including a recent acquisition of 14.1 million shares in TORM [11][23] - The company aims to maintain a low-cost operation while ensuring strong shareholder distributions, with a clear dividend policy linked to the loan-to-value ratio [9][25] Management's Comments on Operating Environment and Future Outlook - Management noted that the geopolitical environment, including the reopening of the Red Sea, could impact market dynamics, but the overall sentiment may not significantly affect trading volumes [37][40] - The company anticipates a strong winter market, driven by refinery closures in Europe and increased demand from the US, leading to a tight tonnage situation [50][51] Other Important Information - The company has a strong focus on innovation and has established a joint venture in the bunkering space with Cargill [8] - The company is actively managing its fleet, with a strategy to extend the life of vessels rather than ordering new builds in a high-price environment [55][56] Q&A Session Summary Question: Why has the order book fallen in Q3? Is scrapping increasing? - Management indicated that the order book has fallen due to a shift in vessels going into dirty trades, rather than an increase in scrapping [52][54] Question: Can you share thoughts on fleet renewal schemes? - The company is focusing on life extension of existing vessels and is open to various opportunities, including resales and M&A, rather than committing to new builds at high prices [55][56]

Core Viewpoint - CMB.TECH reported a profit of USD 17.3 million for Q3 2025, a significant decrease from USD 98.1 million in Q3 2024, while EBITDA increased to USD 238.4 million from USD 177.1 million year-over-year, indicating a recovery in tanker and dry bulk markets after a soft summer [4][5][6]. Financial Highlights - Revenue for Q3 2025 was USD 454.2 million, compared to USD 221.8 million in Q3 2024, with year-to-date revenue reaching USD 1.08 billion, up from USD 714.2 million in the previous year [5][6]. - The company’s contract backlog stands at USD 2.95 billion, reflecting strong future revenue potential [6]. - An interim dividend of USD 0.05 per share is proposed, expected to be paid on or about January 15, 2026 [10]. Fleet Highlights - CMB.TECH took delivery of seven new vessels in Q3 2025, including Super-Eco Newcastlemax and VLCC Atrebates, while selling two older vessels [6][14][15]. - The average daily time charter equivalent (TCE) rates for various vessel types showed mixed results, with Newcastlemax at USD 29,423/day and VLCC at USD 30,486/day for Q3 2025 [11][39]. Corporate Highlights - Changes in the Supervisory Board included the resignation of Mr. Marc Saverys and Mrs. Julie De Nul, with Mr. Carl Steen and Mrs. Gudrun Janssens appointed as new members [12][13]. - The company continues to focus on rejuvenating and decarbonizing its fleet, with ongoing sales and acquisitions of vessels [5][6]. Market & Outlook - The dry bulk market is expected to benefit from increased iron ore imports to China, despite a decrease in domestic steel production, indicating a bullish outlook for seaborne trade [19][20]. - The tanker market is supported by rising global oil supply, with OPEC+ increasing production, which may lead to improved freight rates [26][29]. - The chemical tanker market remains stable, with expectations of modest recovery in volume growth in 2026 [36][37].

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $12.6 million or $0.31 per share for the third quarter of 2025, with earnings increasing throughout the quarter and into the fourth quarter due to record volumes of refined products [4][11] - EBITDA for the third quarter was $27.6 million, with a cash break-even level reduced to $11,700 per day, and an even lower operating break-even of $10,800 per day [11][12] Business Line Data and Key Metrics Changes - The company's MRs earned $24,700 per day in the third quarter and $24,900 so far in the fourth quarter, with 40% booked [5] - Chemical tankers earned $22,600 per day in the third quarter and $22,200 so far in the fourth quarter, with 35% booked [5] Market Data and Key Metrics Changes - Export volumes in refined products reached record levels during the quarter, driving robust product tanker demand [8] - 50% of the LR2 fleet is now trading in the crude market, up 23% over the past year, indicating tight supply-demand balances [8] - 16% of the global tanker fleet is sanctioned, significantly reducing the pool of compliant vessels [8] Company Strategy and Development Direction - The company is focused on balancing capital returns to shareholders while growing the business and reinvesting in the fleet, maintaining low debt levels [6][7] - The company has fully redeemed $30 million of preferred shares, further reducing cash break-even levels and enhancing the quality of its trading book through long-term charter contracts [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand drivers for product tankers, noting significant geopolitical factors creating volatility and increased trading activity [21][23] - The company highlighted the ongoing evolution of trade flows and long-term demand, particularly in regions like California where refined product imports are up 50% year-on-year [10] Other Important Information - The company is investing in digitalization projects and fuel efficiency upgrades, with capital expenditures for 2025 projected at $37 million [12] - The on-hire availability of the fleet was strong at 99% in the third quarter, reflecting effective operations [13] Q&A Session Summary Question: Insights on MR spot rates and winter expectations - Management acknowledged the correlation between MR and crude tanker rates, expressing confidence in the significant ramp-up in earnings and long-term demand drivers [20][21] Question: Thoughts on chartering strategy and appetite for similar deals - Management explained the decision to lock in a long-term charter with an oil major as a way to secure strong returns while maintaining a balanced portfolio approach [25][26] Question: Market outlook and capital deployment strategy - Management indicated that future capital deployment will be guided by market conditions, with a focus on value-enhancing transactions and maintaining a strong governance framework [38][40]

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $12.6 million or $0.31 per share for the third quarter of 2025, with earnings increasing throughout the quarter and into the fourth, driven by record volumes of refined product on the water [4][11] - EBITDA for the third quarter was $27.6 million, with a cash break-even level reduced to $11,700 per day, and an even lower operating break-even of $10,800 per day [11][12] Business Line Data and Key Metrics Changes - The company's MRs earned $24,700 per day in the third quarter and $24,900 so far in the fourth quarter, with 40% booked [5] - Chemical tankers earned $22,600 per day in the third quarter and $22,200 so far in the fourth quarter, with 35% booked [5] Market Data and Key Metrics Changes - Export volumes in refined products reached record levels during the quarter, fueling robust product tanker demand, while high crude fleet utilization is tightening supply across the tanker industry [8] - 16% of the global tanker fleet is now sanctioned, significantly reducing the pool of compliant vessels and limiting available supply [8][9] Company Strategy and Development Direction - The company is focused on balancing capital returns to shareholders with business growth and fleet reinvestment while maintaining low debt levels [6][7] - The company has fully redeemed $30 million of preferred shares, further reducing cash break-even levels and enhancing the quality of its trading book through long-term charter contracts [5][11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand drivers for product tankers, noting significant geopolitical factors creating volatility and increased trading activity [18][19] - The company highlighted the evolving trade flows and long-term demand, with a shift in the global refinery base and increased imports in regions like California [10][11] Other Important Information - The company is investing in AI and digitalization projects for voyage optimization and has achieved full fuel EU compliance across the fleet in 2025 [12][13] - The company has a strong on-hire availability of 99% in the third quarter, reflecting effective operations [13] Q&A Session Summary Question: Insights on MR spot rates and winter expectations - Management acknowledged the correlation between MR and crude tanker rates, expressing confidence in the significant ramp-up in earnings and long-term demand drivers for product tankers [16][17] Question: Thoughts on chartering strategy and appetite for similar deals - Management explained the decision to lock in a long-term charter with a high-quality counterparty as part of a balanced portfolio strategy, indicating ongoing evaluation of opportunities [20][21] Question: Market outlook and capital deployment strategy - Management emphasized that future steps will be guided by market conditions, with a focus on value-enhancing transactions and maintaining a disciplined approach to capital allocation [32][34]

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $12.6 million or $0.31 per share for Q3 2025, with earnings increasing throughout the quarter and into Q4, driven by record volumes of refined products [5][12] - EBITDA for the third quarter was $27.6 million, with a cash break-even level reduced to $11,700 per day, and an operating break-even of $10,800 per day [12][15] Business Line Data and Key Metrics Changes - The company's MRs earned $24,700 per day in Q3 and $24,900 so far in Q4, with 40% booked [6] - Chemical tankers earned $22,600 per day in Q3 and $22,200 so far in Q4, with 35% booked [6] Market Data and Key Metrics Changes - Export volumes in refined products reached record levels, fueling robust product tanker demand, while high crude fleet utilization is tightening supply across the tanker industry [8][9] - 50% of the LR2 fleet is now trading in the crude market, up 23% over the past year [9] Company Strategy and Development Direction - The company is focused on balancing capital returns to shareholders with business growth and fleet reinvestment while maintaining low debt levels [7][15] - The company has fully redeemed $30 million of preferred shares, enhancing its capital structure and reducing cash break-even levels [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market outlook, citing significant near-term disruptions and tight supply-demand balances [8][23] - Geopolitical factors are creating inefficiencies that favorably impact the market, with 16% of the global tanker fleet now sanctioned [9][10] Other Important Information - The company is investing in digitalization projects and biofuel bunkers to support trading strategies in the EU, achieving full fuel compliance across the fleet in 2025 [13][14] - The company has a strong on-hire availability of 99% in Q3, reflecting effective operations [14] Q&A Session Summary Question: Insights on MR spot rates and winter expectations - Management acknowledged the correlation between MR and crude tanker rates, expressing confidence in the significant ramp-up in earnings and long-term demand drivers [20][22] Question: Market dynamics and product tanker performance - Management noted that while product tankers have improved, they have not surged like crude tankers, attributing this to the need for cargoes to deliver into the refining system [29][31] Question: Future capital deployment strategy - Management indicated that future steps will be guided by market conditions, with a focus on value-enhancing transactions and maintaining a balanced approach to capital allocation [35][37]

Core Insights - The company is focused on disciplined capital allocation, balancing shareholder returns with business growth and fleet reinvestment while maintaining low debt levels [1][2][4] - The company has declared its twelfth consecutive dividend and fully redeemed $30 million of preferred shares, which has reduced cash breakeven levels [2][10] - The market for product tankers is experiencing strong demand due to record export volumes and refined products in transit, alongside geopolitical factors affecting supply [5][6][20] Financial Performance - The company reported adjusted earnings of $12.6 million or $0.31 per share for the third quarter, with earnings increasing throughout the quarter [4][10] - The average Time Charter Equivalent (TCE) rates for MRs were $24,700 per day in Q3 and $24,900 so far in Q4, significantly above cash breakeven levels [3][10] - EBITDAR for the third quarter was reported at $27.6 million, indicating strong operational performance [10] Market Dynamics - The product tanker market is characterized by tight supply-demand balances, with 50% of the LR2 fleet now trading in the crude market, a 23% increase over the past year [5][6] - Geopolitical factors have led to 16% of the global tanker fleet being sanctioned, reducing the pool of compliant vessels and limiting available supply [5][6] - The aging fleet and a shrinking order book, with only 13% of the fleet represented in the order book, are expected to create favorable supply dynamics [7][8] Strategic Initiatives - The company is enhancing its trading book through long-term charter contracts, including a recent two-year charter at $21,250 per day with an oil major [2][23] - Capital expenditures for 2025 are projected at $37 million, with a focus on efficiency upgrades and tank coating projects [11][32] - The company is investing in digitalization and AI projects to optimize voyage performance and achieve full fuel compliance by 2025 [12][32] Future Outlook - The company anticipates continued strength in earnings supported by favorable market conditions and strong operational performance [13][20] - The evolving trade flows and long-term demand for product tankers are expected to drive ton-mile demand, particularly as refinery capacities shift towards Asia and the Middle East [7][8][20] - The company remains flexible in capital deployment, considering both shareholder returns and reinvestment opportunities based on market conditions [30][32]