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Euronav announces first quarter results 2017

EURONAV ANNOUNCES FIRST QUARTER RESULTS 2017

HIGHLIGHTS

  • Improved freight rate performance during Q1 compared to 2H 2016
  • Weaker seasonal patterns have prevailed since February
  • OPEC cuts impact less than forecast but owner sentiment remains challenged
  • Strong balance sheet and liquidity position (USD 620 million liquidity)

ANTWERP, Belgium, 26 April 2017 - Euronav NV (NYSE: EURN & Euronext: EURN) ("Euronav" or the "Company") today reported its non-audited financial results for the first quarter 2017.

Paddy Rodgers, CEO said: "Q1 2017 was a confirmation of our thesis: short term challenges but a positive medium structure building for the tanker sector. Asset prices look to be bottoming out in our view confirmed by emerging buying interest from industrial players. However, short term outlook retains a cautious tone with nearly a quarter of the large tanker order book scheduled for delivery during Q2 2017 and newbuilding contract activity picking up short term albeit only in the VLCC sector. Euronav retains substantial balance sheet capability and fixed income visibility to navigate through a period of lower freight rates and/or to take advantage of expansion opportunities. The duration of the challenging freight rate environment will be entirely dependent on the number of additional orders to build new ships that are not needed by the market."

The most important key figures (unaudited) are:
(in thousands of USD) First quarter 2017 First quarter 2016
Revenue 164,158 214,875
Other operating income 1,285 1,724
Voyage expenses and commissions (16,170) (11,348)
Vessel operating expenses (38,876) (38,397)
Charter hire expenses (7,637) (6,212)
General and administrative expenses (10,679) (10,485)
Net gain (loss) on disposal of tangible assets 9 13,821
Depreciation (57,570) (53,207)
Net finance expenses (9,436) (9,529)
Share of profit (loss) of equity accounted investees 9,161 12,438
Result before taxation 34,245 113,680
Tax benefit (expense) 79 (138)
Profit (loss) for the period 34,324 113,542
Attributable to: Owners of the company 34,324 113,542
The contribution to the result is as follows:
(in thousands of USD) First quarter 2017 First quarter 2016
Tankers 25,188 104,956
FSO 9,136 8,586
Result after taxation 34,324 113,542
Information per share:
(in USD per share) First quarter 2017 First quarter 2016
Weighted average number of shares (basic) * 158,166,534 158,370,099
Result after taxation 0.22 0.72
* The number of shares issued on 31 March 2017 is 159,208,949.


EBITDA reconciliation (unaudited):
(in thousands of USD) First quarter 2017 First quarter 2016
Profit (loss) for the period 34,324 113,542
+ Depreciation 57,570 53,207
+ Net finance expenses 9,436 9,529
+ Tax expense (benefit) (79) 138
EBITDA 101,251 176,416
+ Depreciation equity accounted investees 4,456 7,353
+ Net finance expenses equity accounted investees 396 1,238
+ Tax expense (benefit) equity accounted investees
Proportionate EBITDA 106,103 185,007
Proportionate EBITDA per share:
(in USD per share) First quarter 2017 First quarter 2016
Weighted average number of shares (basic) * 158,166,534 158,370,099
Proportionate EBITDA 0.67 1.17
All figures have been prepared under IFRS as adopted by the EU (International Financial Reporting Standards) and have not been audited nor reviewed by the statutory auditor.

For the first quarter of 2017 the Company had a net profit of USD 34.3 million (first quarter 2016: USD 113.5 million) or USD 0.22 per share (first quarter 2016: USD 0.72 per share). Proportionate EBITDA (a non-IFRS measure) for the same period was USD 106.1 million (first quarter 2016: USD 185.0 million).

The average daily time charter equivalent rates (TCE, a non IFRS-measure) can be summarized as follows:

In USD per day

First quarter 2017 First quarter 2016
VLCC
Average spot rate (in TI pool)*** 40,528 60,638
Average time charter rate* 41,147 40,847
SUEZMAX
Average spot rate** 24,000 38,386
Average time charter rate* 23,880 32,251

*Including profit share where applicable
** Excluding technical offhire days
*** Euronav owned ships in TI Pool

EURONAV TANKER FLEET

Euronav took delivery of two VLCCs (acquired as resales of contract), the Ardeche (2017 - 298,642 dwt) and the Aquitaine (2017 - 298,768 dwt), from Hyundai Heavy Industries - Samho yard, South Korea on 12 January and on 20 January respectively.

FINAL DIVIDEND 2016

As reported on 16 March 2017, Euronav will propose to the shareholders to approve a final dividend covering the second half of the 2016 financial year of USD 0.22 per share during the Annual General Meeting of Shareholders that will be held in Antwerp on 11 May 2017. Following the approval, it is anticipated that the ex-dividend date shall be 22 May 2017 with a record date of 23 May 2017 and a payent date of 31 May 2017.

TANKER MARKET

The tanker market saw a number of features during the first quarter which supported our thesis that the market, whilst facing short term challenges, continues to build a positive medium term structure.

On the positive side demand for crude oil remains robust. The recently adjusted IEA forecast for 2017 at 1.3 million bpd growth still drives a requirement equivalent to an additional 35-45 VLCCs of shipping demand for 2017 alone depending on sourcing as most demand growth is from the Far East and therefore will need to be shipped.

Ton miles retains an important dynamism within large crude tanker markets and the first quarter saw further establishment of a key trend, namely USA exports. The level of crude oil exports grew substantially during the first quarter of 2017 to average 758,000 barrels per day (versus 417,000 per day in Q1 2016 (source: IEA)). The breakout in this trend during the first quarter could be the start of a more structural development of a trade lane from the USA to China. This dynamic, combined with the continued growth of a highly flexible oil production source from USA shale, will continue to be important positive factors in the expansion of ton miles to the benefit of the tanker sector.

Asset prices continue to adjust to the new structure of restricted financing. 2016 saw average tanker values fall by approximately 25% (source: Clarksons) - a process which appears to have stabilized during the first quarter of 2017. Our belief is that asset values are approaching a low point supported by reduced immediate newbuilding slots capacity at the yards and less speculative buyers. However, whilst asset prices look to have stabilized this does not necessarily translate into instantly rising values but provides an opportunity for further consolidation by those with access to funding such as Euronav.

However, there are some negative data points that have emerged. According to Clarksons, 15 new VLCCs (zero Suezmax orders since October) have been ordered during the first quarter which is a disappointing development given order flow was zero over the last four months of 2016.

The biggest challenge facing the tanker market at present is the concentration of tanker deliveries. The first quarter saw 27 VLCC equivalents delivered to the global fleet (based on VLCC and Suezmax deliveries only) a number which will be repeated during the second quarter. Absorption of these new, un-vetted vessels will occur during a seasonally weak period and will provide a sustained challenge for tanker operators over the summer months. That said the second quarter of 2017 represents the peak concentration period of new build capacity impacting the market.

Otherwise crude oil markets remain "close to balance" according to the most recent IEA report. Consensus forecasts expect inventory levels to reduce toward more normalized levels during the rest of 2017. This is a supportive backdrop for tanker markets as global oil supply is anticipated to rise driven by USA shale, increased production in core producing nations and reduction in outages in areas such as Nigeria and Libya. Clearly any extension of the six month OPEC production cut will not be beneficial for tankers but medium term supply trends remain constructive and lower inventories with stable demand should result in growing shipments.

We encourage investors to visit our website and access our presentations which are updated regularly at http://investors.euronav.com. In particular we would draw attention to our annual special report which we include in our annual report every year. This year's subject looks at the vetting process in respect of the large tanker sector.

OUTLOOK

Continued robust demand for crude coupled with a positive dynamic of increased ton miles driven by USA crude exports of shale oil compensated nicely for the OPEC/non-OPEC agreement on production cuts. Less positive however, is the return of VLCC newbuilding orders in the first quarter. This implies a lower for longer tanker freight market given the already high concentration of new tanker capacity due for delivery primarily in 2017 but also in 2018. This is likely to generate challenging freight rate conditions during the remainder of 2017.

Euronav remains confident about the medium term prospects for our business and the tanker sector generally. With the lowest leverage in the large tanker sector and access to over USD 620 million of liquidity Euronav is well positioned to navigate the cycle - to be strategically opportunistic whilst remaining exposed to any potential upside from an improved freight rate environment.

So far during the second quarter of 2017, the Euronav VLCC fleet operated in the Tankers International Pool has earned about 32,000 USD and 42% of the available days have been fixed. Euronav's Suezmax fleet trading on the spot market has earned about 22,000 USD per day on average with 47% of the available days fixed.

CONFERENCE CALL

Euronav will host a conference call on Wednesday 26 April 2017 at 09:30 a.m. EDT / 3:30 p.m. CET to discuss the results for the first quarter 2017.

The call will be a webcast with an accompanying slideshow. You can find details of this conference call below and on the "Investor Relations" page of the Euronav website at www.euronav.com.

Webcast Information
Event Type: Audio webcast with user-controlled slide presentation
Event Date: 26 April 2017
Event Time: 09:30 a.m. EDT / 3:30 p.m. CET
Event Title: "Q1 2017 Earnings Conference Call"
Event Site/URL: http://services.choruscall.com/links/euronav170426XiG34C9O.html

Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN conference call registration link: http://dpregister.com/10104695. Pre-registration fields of information to be gathered: name, company, email.

Telephone participants located in the U.S. who are unable to pre-register may dial in to +1-877-328-5501 on the day of the call. Others may use the international dial-in number +1-412-317-5471.

A replay of the call will be available until 3 May 2017, beginning at 11:30 a.m. EDT / 5:30 p.m. CET on 26 April 2017. Telephone participants located in the U.S. can dial +1-877-344-7529. Others can dial +1-412-317-0088. Please reference the conference number 10104695.

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Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe", "anticipate", "intends", "estimate", "forecast", "project", "plan", "potential", "may", "should", "expect", "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the United States Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

Contact:
Mr. Brian Gallagher - Euronav Investor Relations
Tel: +44 20 7870 0436
Email: IR@euronav.com

Annual General Meeting of Shareholders 2017: Thursday 11 May 2017

About Euronav
Euronav is an independent tanker company engaged in the ocean transportation and storage of crude oil. The Company is headquartered in Antwerp, Belgium, and has offices throughout Europe and Asia. Euronav is listed on Euronext Brussels and on the NYSE under the symbol EURN. Euronav employs its fleet both on the spot and period market. VLCCs on the spot market are traded in the Tankers International pool of which Euronav is one of the major partners. Euronav's owned and operated fleet consists of 55 double hulled vessels being 1 V-Plus vessel, 31 VLCCs, 19 Suezmaxes, two Suezmaxes under construction and two FSO vessels (both owned in 50%-50% joint venture). The Company's vessels mainly fly Belgian, Greek, French and Marshall Island flags.

Regulated information within the meaning of the Royal Decree of 14 November 2007

Attachments:

http://www.globenewswire.com/NewsRoom/AttachmentNg/41033672-9a4e-47b0-92c4-4feab1b2d78f

Attachments:

http://www.globenewswire.com/NewsRoom/AttachmentNg/b71bcfab-1fb6-421b-97e3-6aae4ef9e687

Source: EURONAV NV