Euronav’s Earnings Rise Offset By Low Rates For Large

Euronav’s Earnings Rise Offset By Low Rates For Large

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Belgian oil tanker and storage operator Euronav on Thursday reported sharply larger quarterly earnings, however regardless of a freight market restoration, charges for very massive crude carriers (VLCCs) remained low, sending its shares down greater than 4%.

“Administration has good cause to be extra optimistic on the winter season,” ING’s analyst Quirijn Mulder mentioned after the group, which offers crude oil transport and storage providers, mentioned freight charges had improved considerably since March.

Chief Govt Officer Hugo De Stoop mentioned in a press release that current buying and selling information, together with China’s return to crude procurement, vessel provide metrics, and improved oil provide, had underpinned a restoration within the freight markets.

Beneath stress to pump extra crude oil as Western sanctions enacted in response to the battle in Ukraine curtailed Russian oil exports, the Group of the Petroleum Exporting International locations and allies is ready to lift its output objective by 100,000 barrels per day from September. Learn full story

Euronav mentioned it anticipated the diversification of nations’ crude suppliers attributable to dislocations from the battle to drive longer ton-miles – an trade measure incorporating volumes and distance, absorbing extra vessel capability.

The expectation going ahead is that international oil demand progress will have to be glad by non-OPEC producers within the Atlantic Basin, the corporate added.

The Antwerp-based group’s proportionate earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) got here in at $74.9 million within the second quarter, up from $22.6 million a yr earlier.

Its internet loss for the interval narrowed to $4.9 million, in opposition to a lack of $89.7 million final yr.

ING’s Mulder flagged that Euronav’s VLCC fleet had earned round $12,700 per day to this point within the third quarter, about 30% behind the earlier quarter’s degree.

“Suezmax is kind of good,” he added. “Nonetheless, for the quick time period, it helps marginally as Euronav is especially a VLCC participant.”

Olivier Vandewoude, analyst at KBC Securities, additionally pointed to an unresolved scenario with Euronav’s largest shareholder Compagnie Maritime Belge, which is looking for to dam a deliberate merger with Oslo-listed rival Frontline.

“We imagine the merger has an excellent likelihood to succeed, however a cussed household might lead to a protracted and bumpy course of,” he mentioned.

(Reporting by Juliette Portala, modifying by Milla Nissi and David Evans)

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