Slide 1: Earnings Call Q2 2021
EARNINGS CALL Q2.2021 | @euranav
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: Content
CONTENT 1. Q2 2021 HIGHLIGHTS 2. FINANCIAL REVIEW 3. CURRENT THEMES 4. Q&A 3
Slide 4: Highlights Q2 2021
VLCC 90,000 HIGHLIGHTS Q2 2021 81,500 80,000 70,000 60,000 USD/DAY 50,000 • A challenging quarter - tanker market dynamics largely static from Q1 40,000 • OPEC+ output rises not fully translating into higher tanker demand 30,000 • Investment in new generation of ships at the bottom of the cycle 17,2
Slide 5: Financial Highlights: Cashflow & Balance Sheet
FINANCIAL HIGHLIGHTS CASHFLOW & BALANCE SHEET EURONAV BALANCE SHEET – STILL STRONG IN A CHALLENGING MARKET 1400 55% 53% HIGHLIGHTS 1200 51% 1. Leverage Available liquidity to Euronav $m Marked to Market Leverage % 1000 49% 800 47% 43.7% leverage to book value 45% 600 2. Liquidity 43% 400 41% $ 0.9bn
Slide 6: Illicit Trade Grows...
ILLICIT TRADE GROWS... IRAN & VENEZUELA TRADE CONTINUES TO GROW 1200 Upto 66 VLCCs & 29 Suezmax engaged 1000 800 K bpd crude exports 600 400 200 0 Venezuela Iran Source: Bloomberg, Gibsons shipbrokers 6
Slide 7: ...& Recycling Behind Forecast So Far in 2021
…& RECYCLING BEHIND FORECAST SO FAR IN 2021 RECYCLING HAS STARTED – BUT IS BEHIND EXPECTATIONS Year to July 2021 18 16 16 14 12 12 12 10 8 6 4 4 2 0 Actual VLCC recycled Forecast VLCC recycling Actual Suezmax recycled Forecast Suezmax recycling Source: Broker reports, Clarksons 7
Slide 8: Supply of Crude – Traction for Tanker Markets Been Elusive So Far
SUPPLY OF CRUDE – TRACTION FOR TANKER MARKETS BEEN ELUSIVE SO FAR KEY CRUDE PRODUCTION LOCATIONS …BUT NOT YET TRANSLATING INTO DELIVERING RECOVERY… CRUDE EXPORTS 41.000 54% 20.500 % of Russia/US shale/OPEC ME crude output as Russia/US shale/OPEC ME production k bpd 40.000 53% 20.000 Russia/US shale/
Slide 9: But Supply Outlook Promising Short Term
BUT SUPPLY OUTLOOK PROMISING SHORT TERM RETURN OF OPEC BARRELS IN 2H 2021 55.000 55.000 50.000 50.000 K bpd crude production / supply 45.000 45.000 40.000 OPEC plus 40.000 commit return 35.000 of 400k bpd 35.000 per month to 30.000 Dec 21 30.000 25.000 25.000 20.000 20.000 Mar-20 Jun-20 Sep-20 Dec-2
Slide 10: ...With Recovery Trajectory for 22
...WITH RECOVERY TRAJECTORY FOR 22 ..DOES MARKET NEED 100M BPD CONSUMPTION TO RETURN? 11,80 2050 VLCC speed down 0.68 kph Ton mile growth 2.4% 21 Implies capacity down 4% Ton mile growth 4.8% 22 11,60 2000 11,40 1950 11,20 1900 11,00 1850 10,80 1800 10,60 1750 Jun-2020 Jun-2021 Jun-2022 Aug-2020 Aug
Slide 11: Capital Allocation – Dynamic and Flexible Over Last 18 Months
CAPITAL ALLOCATION – DYNAMIC AND FLEXIBLE OVER LAST 18 MONTHS TANKER SHIPPING IS CYCLICAL HENCE NEED FLEXIBLE ALLOCATION OF CAPITAL • Returned $345m or • Returned $118m or $1.57 per share $0.56 per share Cash Share Dividends Buy Backs Fleet Balance Renewal sheet • 12x eco tankers added • Leverage be
Slide 12: Capital Allocation – Investing in Latest Technology for Tomorrow
CAPITAL ALLOCATION – INVESTING IN LATEST TECHNOLOGY FOR TOMORROW AMMONIA: AMONGST HIGHEST POTENTIAL EMISSION GAINS Transition Long Term Solution 100% 93% 93% 90% 84% Well to Propeller emission reductions 80% 70% 60% 50% 40% 2-25% 30% 20% 10% 0% LPG, LNG Green Methanol Green Hydrogen Ammonia Source:
Slide 13: Capital Allocation – Investing in Latest Technology: Regulatory & Commercial Landscape
CAPITAL ALLOCATION – INVESTING IN LATEST TECHNOLOGY FOR TOMORROW REGULATORY & COMMERCIAL LANDSCAPE DEMANDS INVESTMENT NOW Customer demands on emission compliance Demand for emission efficient tankers Carbon Intensity Indicator EU carbon scheme phase in EEXI compliance Yard capacity constrained 2022
Slide 14: Outlook
OUTLOOK TANKER MARKET CONTINUES TO AWAIT RECOVERY Demand for Supply Euronav Oil Ton miles Vessel Supply of Oil Balance sheet 3rd wave OPEC+ scheduled Underlying ton mile Fleet Age & Leverage remains restrictions rising in tapering to add growth at 2% per Orderbook to fleet below target locations des
Slide 15: Q&A
Q&A 15