Euronav(US:EURN)2023-02-02 19:45Financial Data and Key Metrics Changes - The company reported a net profit of nearly $235 million for Q4 2022, significantly boosted by $62.6 million from asset sales, reflecting a continued fleet renewal program [83] - Leverage improved to 45%, driven by higher freight markets and proceeds from sales of older vessels [83] - The company indicated that TCE rates remain profitable and above medium-term averages despite a reset since November [89] Business Line Data and Key Metrics Changes - The tanker market recovery was attributed to seasonal patterns, sustainable oil supply from OPEC and non-OPEC, and repositioning of the world fleet ahead of the Russian crude embargo [89] - The company has rejuvenated its fleet over the last 18 months, taking in new tonnage and reducing older, higher-consuming ships [89] Market Data and Key Metrics Changes - The order book for new vessels is at a 40-year low, while the global fleet is at historical highs, indicating a constrained vessel supply situation [92] - The demand from China is expected to improve as COVID restrictions ease, which could positively impact the VLCC sector [84] Company Strategy and Development Direction - The company aims to continue its focus on fleet renewal and energy transition, with over half of its financing now coming from sustainability-linked sources [16] - Management believes in consolidation within the market and sees growth opportunities, emphasizing that bigger fleets can better service clients [29] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the Chinese economy and its impact on oil demand, expecting significant growth compared to previous quarters [22] - The company is focused on operational efficiency and has implemented digitalization platforms to optimize voyages and reduce fuel consumption [66] Other Important Information - The arbitration process regarding the combination agreement with Frontline is ongoing, with a decision expected soon, which may impact future capital distributions [12][89] - The company is cautious about making predictions regarding the arbitration outcome, emphasizing a constructive approach to resolving issues [95] Q&A Session All Questions and Answers Question: What are the different outcomes expected from the arbitration ruling? - Management indicated that the ruling will determine whether certain contractual clauses remain in place, affecting future capital distributions [100] Question: How does the company plan to balance dividends and share buybacks? - The company will maintain a balanced strategy between dividends and share buybacks, considering share price and outlook [100] Question: What is the expected impact of inflation on operational costs? - The company has budgeted for a 4% to 5% increase in operational costs, primarily due to rising crewing costs and technical expenses [112]