Euronav NV provides a business and dividend update following the recent board and management changes.
The Supervisory board has agreed to distribute USD 0.57 per share to shareholders for the period covering Q3 2023. This reflects positive freight market conditions in the large crude tanker market during Q3 2023. This favourable tanker market environment continues into Q4 2023 and is anticipated to remain robust during calendar year 2024.
Mandatory Takeover offer
Following the successful completion of the SPA (share purchase agreement) with Famatown/Frontline on 23 November, CMB by holding 49% of the share capital of Euronav is now obliged under Belgian corporate law to launch a mandatory takeover offer.
The offer will be launched at a price of USD 18.43 per share, reduced on a dollar-for-dollar basis by the gross amount per share of any distributions by Euronav to its shareholders with an ex-dividend date prior to the settlement date. The bid price will be paid in cash.
As CMB intends to maintain Euronav’s listing on Euronext Brussels and the New York Stock Exchange, it has clearly voiced its intention to not launch a squeeze-out bid following the closing of the offer.
Future strategy
The new management has a clear future strategy for which is based on three axes:
- Diversification of the fleet
- Decarbonization of the fleet
- Optimization of the existing fleet
The core for Euronav will remain the crude tanker operation. The prospects for this market remain very positive supported by strong industry fundamentals. A low order book (5% on average), global fleet ages at 22 year highs and robust demand for crude (IEA forecast 1.2m bpd growth for 2024) provide a constructive background for calendar year 2024.
Consensus freight rate forecasts for 2024 at $50k per day for VLCC and Suezmax rates. In addition, with asset values approaching all-time highs (adjusted for inflation) management will have the optionality to recycle capital from the tanker market into the energy transition over the medium term.
As the company transitions from a pure crude tanker vehicle toward an energy transition growth company investors should expect to see a more equal balance between growth investments in the energy transition and cash distributions to shareholders.
Euronav management look forward to updating investors with more details on strategy, and capital allocation via an active investor engagement programme during Q1 2024 including a capital markets day.
Trading update
So far in the fourth quarter, Euronav VLCCs in the Tankers International Pool have earned USD 36k per day with 84% of the available days fixed. Euronav’s Suezmax fleet trading on the spot market has earned USD 42k per day on average with 72% of the available days fixed.
Distribution to shareholders for Q3 2023
The Supervisory Board is proposing a gross dividend of USD 57 cents per share to reflect both the strong tanker market fundamentals and the robust operational leverage that the current Euronav platform had to such market conditions.
As mentioned before, this means that the bid price will be reduced by USD 57 cents per share to USD 17.86 per share.
COUPON 36:
Ex dividend date: 12/12/2023
Record date: 13/12/2023
Payment date: 20/12/2023
Alexander Saverys, CEO of Euronav said: “Euronav is pleased to reward shareholders with this dividend reflecting positive tanker market performance during Q3 2023. We are looking, to pivot the company further with a value-creating strategy to diversify the fleet, decarbonisation of the fleet and optimisation of the existing fleet”.
Source: Euronav