Cmb.tech Nv · EURONEXT:CMBT
Cmb.tech Nv — Euronav — Investor Presentation (September 2020)
37 slides from Cmb.tech Nv's investor presentation, September 2020
Slide 1: Investor Presentation Update September 2020
INVESTOR PRESENTATION UPDATE SEP TEMB ER 2 0 2 0 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Matters discussed in this presentation may constitute forward-looking statements under U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the Company’s current views with respect to future events
Slide 3: Current Trading
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Slide 4: Short term tanker market hit by lower oil demand and supply
SHORT TERM TANKER MARKET HIT BY LOWER OIL DEMAND & SUPPLY HIGHER VESSEL SUPPLY POST STORAGE Recovery in oil demand Crude export forecast supply cut Oversupply of vessels short term trajectory stalled in August by Nigeria & Iraq compliance as % idle moves above average 96 8.0 15.0 7.0 95 % of VLCC/Su
Slide 5: Tanker Markets
TANKER MARKETS SEASONAL; 30 YEAR RECORD IMPLIES RATE LOW IN MID SEPT 60,000 55,000 50,000 Average VLCC spot rate since 1990 45,000 40,000 35,000 30,000 25,000 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Clarksons 5
Slide 6: Tanker Share Prices
TANKER SHARE PRICES WERE TRACKING INVERTED OIL PRICE UNTIL JULY 6
Slide 7: Floating Storage
FLOATING STORAGE AROUND 100M BARRELS “EXCESS” m bbls on VLCC/Suez/Afra 350 300 250 m bbls on floating storage 200 100m bbls 150 100 50 0 03-Jan-2020 03-Feb-2020 03-Mar-2020 03-Apr-2020 03-May-2020 03-Jun-2020 03-Jul-2020 03-Aug-2020 Source: Clarksons 7
Slide 8: Floating Storage Unwind
FLOATING STORAGE UNWIND AROUND 26 VLCC, 32 SUEZMAX & 30 AFRAMAX “EXCESS” 100 90 80 No of vessels in floating storage 70 60 26 50 40 30 32 30 20 10 0 03-Jan-2020 03-Feb-2020 03-Mar-2020 03-Apr-2020 03-May-2020 03-Jun-2020 03-Jul-2020 03-Aug-2020 VLCC # storage Suezmax # storage Aframax # storage Sour
Slide 9: VLCC – Disruption (=Positive) Heavy
VLCC – DISRUPTION (=POSITIVE) HEAVY Temporary disruption Semi permanent disruption Permanent feature 9
Slide 10: China
CHINA FROM Q2 UPLIFT IN CRUDE PURCHASES AND WITH USA FOCUS 8,000 12 3.5 7,000 3.0 USD $bn value of China buying US crude 10 No of VLCC cargoes US to China 6,000 2.5 8 China crude imports k bpd 5,000 2.0 6 4,000 1.5 4 3,000 1.0 2,000 2 0.5 1,000 0 0.0 0 No of VLCC cargoes US $ value cumulative China
Slide 11: US-China Phase 1 Impact
US-CHINA PHASE 1 IMPACT GROSS IMPACT VLCCs REQUIRED • China to buy $52bn US energy products US China • 25% of $52bn = crude = $13bn phase 1 deal • $13bn/ $40 oil price = 325m barrels crude / 2m bbl. VLCC capacity = 163 cargoes +36 • 216 cargoes / 4.5 US to China in 1 year = 36 POTENTIAL OFFSET DIFFI
Slide 12: US Crude Exports
US CRUDE EXPORTS REMAIN RESILIENT AT 3M BPD DESPITE US OUTPUT DROP US crude exports been more resilient than Most forecasts for 2m bpd US crude exports expected even with fall in US crude production if near 3m bpd = 40+ VLCC 4000 13500 3500 13000 3000 12500 US Crude Production k bpd US Crude Exports
Slide 13: Contango
CONTANGO BEGINNING TO CREEP UP – APPROACHING $3 OVER 6M SPREAD (Bloomberg) 09/07/20 16:13-- Storing crude at sea has become profitable again for short-term as tanker rates slump, shipbroker and exchange data compiled by Bloomberg show. • Data show that based on cargoes for northwest Europe and the M
Slide 14: Contango Recovery
CONTANGO RECOVERY IN LINE WITH PREVIOUS CONTANGO PERIODS 1997 2015 2020 2008 14
Slide 15: Despite Rising Crude Price
DESPITE RISING CRUDE PRICE HSFO- VLSFO FUEL SPREADS CONTINUE TO FALL …stop press Source: Bloomberg 15
Slide 16: Fundamentals for 2021 and Beyond Intact
FUNDAMENTALS FOR 2021 AND BEYOND INTACT 16
Slide 17: Demand for Oil
DEMAND FOR OIL BEEN ROBUST AND STEADY…UNTIL 2020 Y/Y Change in global demand for oil – pedestrian until Covid-19 impact 6 5.3 4 2 IEA oil demand m bpd 0 -2 -4 Average 1.1 million barrels per day 1990-2019 -6 -8 -7.9 Source IEA 17
Slide 18: Demand Forecasts by Agencies
DEMAND FORECASTS BY AGENCIES PRICE IN RECOVERY BUT LIKELY LOWER FLEET SIZE REQUIRED Demand trajectory for crude Trading VLCC fleet already at #665 102 100 Oil demand forecast m bpd 98 96 94 92 90 88 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun IEA EIA Source: IEA, EIA, Clarksons Source: IEA, EIA,
Slide 19: Crude Demand
CRUDE DEMAND WHAT HAPPENED IN 2008/9 FINANCIAL CRISIS Recovery took time globally Source: IEA 19
Slide 20: Crude Inventory
OECD crude inventory bbls k (EIA) 2500 2600 2700 2800 2900 3000 3100 3200 3300 3400 3500 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 CRUDE INVENTORY Jan-12 OECD Inventory Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Days of Dema
Slide 21: Ton Miles
TON MILES RECENT STAGNATION WITH RECOVERY EXPECTED IN 2021 41 11,000 40 10,500 World Seaborne trade crude oil mbpd Seaborne trade billion tonne-miles 39 10,000 38 9,500 37 9,000 36 8,500 35 34 8,000 33 7,500 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 World Seaborne Billion tonne-miles World S
Slide 22: Seaborne Crude Trade and Oil Demand
SEABORNE CRUDE TRADE AND OIL DEMAND STRONG BUT NOT UNIFORM CORRELATION IEA & Seaborne crude y/y change IEA & Seaborne demand correlation 4.0 105 45 IEA oil demand and clarksons crude seaborne globally 100 3.0 40 95 2.0 Seaborne crude m bpd 90 IEA Demand m bpd 35 1.0 85 (m bpd) 0.0 80 30 75 -1.0 70 S
Slide 23: Vessel Supply Dynamic - Key
VESSEL SUPPLY DYNAMIC - KEY 23
Slide 24: Fleet Ageing
FLEET AGEING 20% OF VLCC FLEET >15 YEARS FACING SURVEY IN NEXT 7 QUARTERS Large tanker average age 147 VLCC aged over 15 yrs require special @ 10 years of age – last seen in 2002 survey by end Q1 2022 10.5 40 25% 10.0 35 20% Average Age of Global Fleet 30 9.5 % of VLCC fleet 25 15% # of VLCC 9.0 20
Slide 25: Key Supply Issue
KEY SUPPLY ISSUE POTENTIAL CATALYSTS FROM 186 SURVEYS NEXT 2 YEARS Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Total % of fleet Over 20 years 7 5 8 17 9 11 4 18 79 10% Over 17.5 years 14 20 13 29 14 17 7 28 142 18% Over 15 years 18 28 18 36 15 26 8 37 186 24% 40 35 No of VLCC to
Slide 26: VLCC Fleet Structure
25-21 yrs 3% 20-16 yrs 18% VLCC FLEET STRUCTURE 15-11 yrs 10-6 yrs 21% 28% 5-0 yrs 30% Orderbook 8% Current fleet 80 18% survey pool Under construction 70 60 50 # of VLCCs 40 65 68 30 59 19 51 49 47 50 20 39 39 34 36 29 31 29 30 28 26 24 10 20 18 20 21 8 11 7 0 2 3 Year of Build 26
Slide 27: Suezmax Fleet Structure
29-21 yrs 8% 20-16 yrs 19% SUEZMAX FLEET STRUCTURE 15-11 yrs 10-6 yrs 25% 23% 5-0 yrs 25% Orderbook 10% 60 Current fleet 18% survey pool Under construction 50 40 # of VLCCs 30 50 44 43 44 20 37 28 26 14 23 25 24 10 21 20 20 22 18 18 16 13 13 12 8 8 9 5 6 0 2 1 1 2 2 1 Year of Build Source: Clarksons
Slide 28: Shipowners Dilemma
SHIPOWNERS DILEMMA Illustrative maths – older vessels have lower addressable market Scrap Scrap Revenue Factor in Cash BE @ Special Net VLCC Today VLCC over 50% $15k Survey Return Value Value 900 days utilisation 900 days $m* $m* Rate $m $m $m Cost $m $m 16 13.7 OR 20,000 18 9 13.5 4 -8.5 16 13.7 30
Slide 29: When to Scrap?
WHEN TO SCRAP? 2/3 of scrapping has occurred when quarterly freight rates below $20k per day 25 100% 90% 20 80% 70% 15 60% 50% 10 40% 30% 5 20% 10% 0 0% Rates below $20k VLCC scrapping Suezmax scrapping Source: Clarksons 29
Slide 30: Scrapping
SCRAPPING VLCC RATES GO BELOW P&L BREAK EVEN = 5% FLEET DEPARTS VLCC fleet 804 @ start of year = 40 VLCC or 53 VLCC equivalents 9% 30,000 8% 25,000 7% % of VLCC fleet scrapped 6% 20,000 VLCC rates 5% 15,000 4% 3% 10,000 Average age 2% 20.0 19.2 20.0 22.0 21.3 18.2 19.9 20.4 24.2 20.8 25.9 22.1 20.4
Slide 31: Scrapping
VLCC scrap value $m 0 5 10 15 30 20 25 Jan-2004 Jun-2004 Nov-2004 Apr-2005 Sep-2005 Feb-2006 Jul-2006 Dec-2006 May-2007 Oct-2007 SCRAPPING Mar-2008 Aug-2008 Jan-2009 Jun-2009 Nov-2009 Apr-2010 Sep-2010 Feb-2011 Jul-2011 Dec-2011 May-2012 Oct-2012 Mar-2013 Aug-2013 Jan-2014 Jun-2014 Nov-2014 Apr-2015
Slide 32: Large Tanker Re-sizing
LARGE TANKER RE-SIZING WHAT DOES THAT MEAN? State of play end 2019 Global IEA Seaborne Required Required IEA Crude VLCC Trading Seaborne Demand Trade VLCC Resizing Demand Fleet = Crude m bpd m bpd fleet # vessels 99.9m bpd #742 40m bpd 98 39.6 703 -60 97.4 39.2 685 -78 IEA demand forecast for 2021 9
Slide 33: Euronav Positioning & Outlook
EURONAV POSITIONING & OUTLOOK 33
Slide 34: Euronav Bond Price
EURONAV BOND PRICE 7.5% BOND DUE MAY 2022 AT ALL TIME HIGH 34
Slide 35: Who We Are
WHO WE ARE TWO YEAR LIQUIDITY RUNWAY & BALANCE SHEET STRENGTH 30,000 25,000 56% 1200 54% % marked to market leverage 1000 20,000 $m available liquidity 52% 800 50% 15,000 48% 600 2011 2017 1992 46% 400 2017 10,000 2013 2018 1994 44% 1990 200 2011 2017 2013 1990 1994 1992 2018 1994 1992 2017 42% 1994
Slide 36: Who We Are
WHO WE ARE MOST DEFENSIVE TANKER COMPANY LISTED 140 120 3.0 Implied resale value VLCC 120 103 P/NAV change on 20% 2.5 100 86 80 80 79 from equity price 77 74 asset price fall 2.0 80 60 1.5 40 1.0 20 0.5 0 0.0 80% 69% 68% 0% 70% 58% -5% 60% 50% 45% -10% 40% 40% 40% LTV -15% 40% 31% 30% -20% 20% -25%
Slide 37: Outlook
OUTLOOK TANKER MARKET IN TRANSITION PHASE Demand for Supply Vessel Euronav Oil Ton miles Supply Balance of Oil sheet Q4 19 Rating Restrictions lower OPEC+ driving US export growth Orderbook to fleet Liquidity of $1bn Q2 demand but supply cuts but oil to ameliorate but ratios at + share buyback recov