Alexander Saverys, CEO
Good afternoon, everyone, and welcome to the CMB.TECH Q12026 earnings call. My name is
Alexander Saverys, and I'm joined by my colleagues Ludovic Saverys, Enya Derkinderen and Joris
Daman.
We will present to you the highlights of our first quarter and the title of this call is firing on all
cylinders. We had a very interesting quarter, a very good quarter and we would like to start with
some financials and highlights and I will hand it over to Ludovic.
Ludovic Saverys, CFO
Thanks, Alex.
As usual, we will start with a high level overview of our company. We're active in five different
segments from dry bulk, crude tankers, containers, chemicals to offshore energy. We had an
interesting quarter, as Alex mentioned. Compared to last quarter, our total fair market value has
increased, our market cap has increased, we've reduced our leverage, we've reduced our CapEx
commitment and increased our contract backlog.
Next slide please. If we zoom in on the Q1 financials, we've ended the quarter with a net profit of
$368.8 million. Notable in these figures are obviously our increased revenue, but we have been
able to, while the quarter passed, de-lever quite a bit and reduced our margins with the banks. And
so our interest, our net finance expenses decreased from $113 million from last quarter to 81 this
quarter, delivering a very nice profit. The liquidity of the company end of Q1 stands a little bit above
half a billion dollars and our equity on total assets value adjusted is below 50% which is our through
the cycle target.
Further zooming in. We have de-levered, we are paying dividends and we are strengthening the
balance sheet while we are optimising our fleet through well timed S&P.
Notable on the contract backlog, we have signed one 5-year time charter on a Suezmax vessel
and extended two 9-year time charters by another year.
The board of directors has decided they would like to distribute $0.64 cent per share as
distribution. This will be managed by $0.20 interim dividends and $0.44 distribution out of share
premium. That's quite interesting because there is no withholding tax on that part. So 70% of our
dividend will be exempt from withholding tax.
We took delivery of seven newbuilding vessels, which Alex will discuss a little later on, and we have
sold quite a few ships that were announced already, 2 capesizes and eight VLCCs. One additional
vessel, the Suezmax Sienna has been sold and will be delivered in Q2. So the capital gains of the
first quarter were $267 million and in Q2 we're expecting a capital gain of $127 million.
We are a diversified platform. However, we have a large spot exposure on two of our promising
markets, which is dry bulk on the one hand and tankers. If you look at full 2026, we have roughly
53,000 shipping days from which 80% is spot. And from those spot days, we have 36,000 open
dry bulk days, which is roughly 10,000 on the Kamsarmaxes and 26,000 on Capesizes and
Newcastlemaxes. These are increasing markets and hence we are favorably positioned to enjoy
those in the coming quarters.
On this slide, we have shown a hypothetical free cash flow for our company in 2026. This is
including a free cash flow from the first quarter, but putting some rate assumptions on the right
bottom side where you could see that actually if we take the market today, we are in the plus 20%
case compared to our market assumptions and we would have a operational free cash flow of over
$1 billion. This is excluding vessel sales, but it is also excluding the remaining CapEx, which we will
discuss a little later on.
On the CapEx, we've come a long way. We have a remaining CapEx end of April of $1.2 billion from
which roughly $184 million is unfunded. If you have followed our story, you know that with the
vessel sales, this is more than double covered for the unfunded CapEx. But this slide shows that
2026 will be the last heavy newbuilding delivery year with the remaining $740 million to be paid to
the shipyard in the coming 3 quarters. Whereafter obviously our free cash flow could be used on
other topics than CapEx.
Ordered backlog, we've increased our contract backlog roughly by $200 million. As mentioned
there is a gradual repayment. The contract backlog reduces by roughly 100 million per quarter, but
we've added 200 million of fresh charters. Of these long-term contracts still 1.9 billion is on dual
fuel related vessels.
And we have quite strong counterparts, most of them investment rates as you can see on the right
side.
I'll then hand over the discussion topics to Alex to talk about the markets.
Thank you, Ludovic.
Alexander Saverys
So I'll start with our normal slide, overview slide in all the segments. We are as you can see, still
positive on the dry bulk market, the tanker market and the offshore energy market. We are and
have been over the last two quarters cautious on the container and the chemical market. High level
dynamics. We see in dry bulk tonne-mile growth for major commodities that we are transporting in
our Capesizes and Newcastlemaxes like iron ore and bauxite, but also on other commodities in dry,
we see some growth. Looking at the supply side, we will see a growth of 1.7% of the fleet in capes
today, a tick under 5% on Panamaxes. We still believe in a balance and we'll dig in, in the following
slides more in detail that the supply demand is actually positive for freight and positive for our
market.
The same can be said on tankers. Ofcourse, tankers is a more complex story.
With what is happening right now in the Middle East. in terms of tonne-mile, it's very difficult to
predict. But as it stands, analysts are expecting a small reduction in tonne mile for crude oil this
year, some growth next year. What is interesting on the tanker market is that the supply side, even
though in the short term the fleet is not growing that much as from 2027 and particularly in 2028,
we will see a Big growth in the fleet, so the orderbook to fleet in VLCCs and Suezmaxes is coming
closer to 30%.
This being said, in the short-term, the tanker market dynamics are positive. We'll definitely zoom
in on that a bit later. On the container side, not a lot has changed. I would say that in kind of the
more negative story that we have been seeing over the last quarters, the Middle East turmoil has
given some support to the market but with a large orderbook and an expected contraction in TEU
mile demand, we are cautious on the container side. As you know, all our ships are fixed, so we are
not really exposed on the spot market.
On the chemical side, it all feels a little bit softer. Chemical market is less volatile, but there we see
there are some new vessels being delivered to the fleet. There is a little bit softer growth in demand
for chemical tankers. So on balance we are a bit more cautious.
And then last but not least, we remain positive on the offshore energy markets. After 2 slow years
of wind installation, we're expecting an increase this year and next in, for instance, the important
North Sea market. But also on oil and gas, we are seeing a lot of demand for offshore energy supply
vessels like our ships. And so all in all, we're expecting good markets going forward in that
segment.
I want to zoom in on the largest segment and the market that is most important to us right now,
which is dry bulk. On the left side of the slide, you can see our fleet. We have 36 Newcastlemaxes
on the water. We're adding another 10 this year, maybe one or two will be delivered at the beginning
of next year. But in the next 6 months, we will have 46 Newcastlemaxes, a big armada of
Newcastlemaxes, on the water.
We have performed very well during the first quarter, which is traditionally a slower quarter. You
can see that we reached levels of $28,000 a day, but what is even better is that looking forward to
the second quarter, we have fixed most of our days, 80% already, at $44,000, which is very good
for that segment.
The Capesize fleet is a big fleet as well. We have 37 Capesize vessels on the water. We achieved
rates of $26,000 in the first quarter. Have already fixed roughly 3/4 of our days at $37,000 for the
second quarter. With the amount of ships and the amount of days, this is all very supportive for
our results going forward.
And then last but not least, our Kamsarmax/Panamax fleet of 30 ships. The first quarter was
satisfactory. We reached kind of a breakeven level of $14,500, but we have seen in recent weeks
a market uptick. And we have already been able to fix very good levels close to $20,000 for 3/4 of
our days in the second quarter. When you look at the main drivers in dry bulk, it's a mixed picture:
some very positive signals, some not so positive, but we will dig into some of the elements in the
next slide and slides.
Let's first start on the supply of the vessels, which is the newbuildings, the orderbook and then the
age of the fleet. When you look at the newbuildings, the orderbook to fleet has increased over the
last three to six months there have been more orders for dry bulk tonnage. And specifically, on
Capesize vessels and Panamax vessles you can see that we are now reaching a level of 14 to 15%
of the fleet. If you put that against the age of the vessels, and you can see that we've reached kind
of an all-time high average age of the fleet, there is a lot of potential for scrapping. There's a lot of
potential for all these newbuildings to replace the ageing fleet. And actually, as it stands, there
should normally be more ships leaving the fleet than being added to the fleet in the next two years
at least and even going forward in 2029 and 2030. So, on the supply side, we still believe that this
is supportive for our markets going forward.
If we look at the demand side, we are zooming in on important commodities for the Capesize
vessels and important commodities for the Panamax vessels. On Capesize vessels, it's of course
iron ore, bauxite and a little bit of coal. But you can see that the numbers are adding up very nicely,
definitely compared to last year. We are in all segments above, coal is a little bit below. But, all in
all, it's a supportive picture in the first quarter and in the month of April.
A similar story can be told about the Panamax vessels. The typical cargo that Panamax vessels
transport, coal and grain, have been growing. And so, we are seeing this being translated in, of
course, better freight rates. So, I would say that Q1 has surprised us to the upside, has been less
slow than usual and has underpinned the freight market.
If we look at the total year, so what to expect for the next couple of months, the picture remains
supported for our Capesize vessels with the iron ore trade. The bauxite trade is a bit of a question
mark. If we see some export caps out of Guinea, then this could be a negative for our market. In
the numbers we don't see it yet, but it is of course something to watch.
Interestingly, something that could underpin our market is the coal trade and I'd like to zoom in on
that on the next slide. We have added on this slide as well the rate forecasts for a regular 180K
Capesize vessel for this year, including the first quarter, we are now at $31,500, which is actually
a very good rate and definitely in profit making territory.
Operation Epic Fury and the gas-to-coal switching. We've tried to analyse based on the information
that is available, what the impact would be if certain countries that are powering their countries
and are making electricity with oil and gas would shift more to coal and this gas-to-coal switching
is basically sketched out on this slide.
Initially, on the coal side, all the analysts and including ourselves were expecting a relatively soft
market for seaborne coal. Definitely, going into the second half of the year and we were looking at
our base case scenario of coal power generation in Europe and in Japan, South Korea and Taiwan
to go down. Now obviously the war in Iran and the turmoil in the Middle East which have led to an
increase in gas and oil prices have changed the situation. And what we are now taking as a base
scenario is that over the course of this year Japan, South-Korea and Taiwan will increase their
imports of seaborne coal by 27,000,000 tons, so increase the utilisation of their existing coal
infrastructure. And on Europe, as it stands, expecting 12 million tons of coal to be added to the
trade and increasing utilisation from 40% to 55%. Now there is further upside to that. If Europe
would import, in a high case, another 60 million tons of coal, that’s what we've tried to map out on
the right side of the slide, where you can see in green the supply of ships, and in blue/gray and
light blue the different scenarios of on the demand. You can see on Capesize vessels, we were
looking at 1.7% increase in the fleet and a 3% base case increase in tonne-mile demand, we have
revised that to 3.5% tonne-mile demand. Now if you get this, kicker on call to Europe,in the high
case, this could go all the way up to 5.2% increase in demand.
And the same goes for Panamax vessels and I think that's very interesting because obviously that
coal is a very important commodity for Panamax vessels. We have a pretty high delivery schedule
this year of close to 5% increase in the fleet. The base case, we were looking at a bit under 4%
demand growth for Panamax vessels. In the current new base case we're looking at 5% growth,
but in the high case this could even go to 7.5%. So, this Operation Epic Fury, the war in the Middle
East could have a significant positive impact on the dry bulk markets and we're seeing some of it
already now.
And then basically to conclude, what we've mapped here is the new base case, so not the high
case in numbers of volumes from Q1 to Q4. What we wanted to highlight here for those who are
not very familiar with the dry bulk market is that the first quarter is always the lowest quarter in
terms of volume. Usually volumes then ramp up in the second quarter, third quarter and fourth
quarter, which again we think bodes very well for our dry bulk market going forward.
And of course, CMB.TECH is very well positioned with our large fleet of Capesizes at
Newcastlemaxes and Panamaxes.
I want to talk about Euronav and the crude oil markets and probably where most of you have a lot
of questions on what our view is on what is happening in the world. Let me first start with a quick
overview of what our fleet has done after the sales of our VLCCs: we are down to six VLCCs, 4 are
on the water, 2 will be delivered during the course of this year and in January of 2027.
We achieved very good rates in the first quarter and even better rates for the bookings that we
have done in the second quarter. You can see we're at $180,000 of rates booked for 80% of our
days. Of course, we only have 6 VLCC's left, but nevertheless, this will, of course, contribute very
positively to our profits going forward. The sale of the 8 ships, we have communicated on that
already. We did a very nice capital gain of in total $360 million on the sale of these 6 older VLCCs
which have been reflected in our first quarter results and will partly be reflected in the second
quarter results, we have 18 Suezmaxes on the water. We recently took delivery of the Cap Grace
and Cap Joseph, so we have 18 ships in our fleet. We achieved rates on the spot market of $91,000
in the first quarter, $122,000 for most of our days in the second quarter, again excellent rates in
the current circumstances and we have sold one of our older Suezmaxes to Sienna, which is a 19
year old Suezmax which will deliver in the second quarter and this will give us a capital gain of $30
million. You can see on the right side all the indicators. Again these need to be taken with a big
pinch of salt because the real impact of these numbers is of course influenced a lot on the seagoing side with what is happening in the Middle East and what is happening in the Strait of Hormuz.
First, before we talk about that, I wanted to show you the slide on the orderbook and the supply of
ships and the age of the vessels. The orderbook has really shot up. We are now looking at a
combined 500 VLCCs and Suezmaxes on order, which we believe is a lot of ships obviously very
much skewed towards the second-half of 2027 and 2028. You can see the numbers there: in 2028
already more than 200 VLCC's and Suezmaxes are on order, even though theoretically the age
profile of the fleet would be able to absorb these vessels, IE older vessels should be scrapped and
the newbuildings could replace them.
We are a little bit concerned going forward, looking at the orderbook, but in the short term, of
course not that many vessels are coming on stream and this is of course translated in good freight
markets. Average age of the fleet, you can see there is getting to historical highs. We're at 13 to13,5
years. Again, this is a positive as and when and if we would need to scrap some vessels.
I want to talk about the Strait of Hormuz situation, Operation Epic Fury and the impact on shipping
in general and on the oil supply. On the left side, you can basically see the number of transits
through the Strait of Hormuz on a daily basis. We are talking between 110 to 150 ships a day, now
we are down to between 5 and 20 transits a day.
In terms of tankers, we see that 115 VLCCs and 24 Suezmaxes are still trapped in the Persian Gulf.
Of that fleet, 40% are dark fleet vessels, so not really vessels that we would compete with, but it's
still a significant amount of ships that are trapped there. On the supply side of oil, my colleague
Joris Daman has made a very interesting analysis on the right side of the slide. Because it's his
analysis, I want to hand it over to him so that he can explain to you what he is seeing in the numbers.
Joris Daman:
Yes, happy to run through it. So the right hand side graph really starts by showing the baseline.
The baseline was 15,000,000 barrels per day of crude oil. This is only crude oil traversing the Strait
of Hormuz. So being exported out of the Persian Gulf. Now that's closed. The Strait is de facto
closed. So we made the assumption that's lost and then we are going to look, OK, what's the actual
impact on crew tanker flows? We have a selective passage of 1.2 million barrels per day. That's the
actual passage over the last two months divided by 60 days.
That's 1.2 million barrels per day. So it's actually one Suezmax a day for every second day, one
VLCC. Then we have some pipeline capacity which came upstream and is today roughly around
5.5 million barrels per day. It's Yanbu, Fujairah and then the Kirkuk-Ceyhan pipeline. Then we had
a temporary effect of floating storage, release of reversal of floating storage and also some Russian
sanctions being lifted and actually being able to be added to the tanker market. And then the real
interesting part comes and that's on one hand the export growth out of the US, which is a
combination of additional volumes, but also SPR (Strategic Petroleum Reserve) releases roughly
1.4 million barrels per day. And then also other countries stepping up the game, for example, Brazil,
Guyana, Canada, Angola and they are additionally bringing 1,000,000 barrels per day capacity to
the market.
So if you go from the 15, we take all those steps, we end up with a loss of 5.3 million barrels per
day capacity lost to be transported on board of crude oils. Now it's really important to see here
that we are actually increasing longer mile transportation. So we get a tonne-mile kicker because
of the exports out of the US but also Brazil, Guyana are actually further away than a typical Middle
Eastern to China transportation and it's 2 to 2.5.
More so if we take the 2.4 and we multiply that by 2 to 2.5 and we compare it to 5.3, we are actually
quite balanced from a tonne-mile perspective. And that's really the reason why the utilisation of
the tankers are still healthy and that the remains for US Gulf to China transportation are actually
still quite healthy. If you go one step further, we really look OK, what could be the potential impact
on the barrel price?
There it's really important to understand that we started the operation Epic Fury in a global situation
where there was a large oversupply. So there was a bigger supply of crude oil to the market than
a demand. So we had actually an oversupply of 2.6 million barrels per day, meaning that in the end
today's market is only under supplied by approximately 2.7 million barrels per day of crude oil,
which will have an impact on demand structure or any other means to have the balance again in
the market.
Alexander Saverys:
Thank you very much, Joris.
So after that analysis, what we just wanted to add is basically the consequences of the closure of
the Strait of Hormuz, is that we see a lot more ballasters going towards the Atlantic to pick up the
oil where it is still available. And this obviously also has an impact on rates. You can see the rate
from the Middle East to China.
Which we think is much of a theoretical rate. Not that many ships are being fixed at these kind of
levels.
The more interesting one is of course the TD 22 route at the bottom in green where you can see
that rates were very high, but then gradually started going down as more ballasters, more VLCC's
were coming towards the US Gulf to pick up the oil there. Now when I say gradually going down,
we are still at a level around $100,000 a day, which is very, very healthy for our market. But it shows
you the disruption that the closure of the Strait of Hormuz also has on the positioning of the vessels.
I'd like to finish with our three slightly smaller divisions, Delphis, Bochem and Windcat. On Delphis
we can be relatively short. You know all our ships are fixed on long-term time charters. We still
have one newbuilding coming this year delivering in October, which has been fixed on a 15 year
contract. The bottom line on the container market is that the orderbook is very high.
We still see a huge TEU Mile disturbance with the de facto closure of the Red Sea.
If no container ships pass by there, it's basically 12% of a demand kicker. So if that falls away,
including the big tsunami of new container vessels that will come on stream in the next couple of
years, the market should continue to go down. But very short-term, we have seen a little uptick
because of the disturbance around the Strait of Hormuz. And so rates both on the spot market and
also on time charter rates, have gone up a little bit in recent days and weeks.
But we believe fundamentally this should normally go down again as soon as certain things resolve
themselves and as the orderbook starts delivering to the market.
Chemical tankers, I was mentioning a slightly softer market that is reflected in what we are earning
in the spot pool. Now most of our vessels are fixed on time charters. So we're not really affected
by that. But it has to be said also chemical tanker markets are much less volatile than other markets.
So when we say softening and you look at the numbers that we are achieving on the spot market
of $21,500 - that is compared to around 25,000 last year - we still believe these rates are very
healthy.
Finishing off with Windcat. Exciting times for our division, Windcat, because we have taken delivery
now of our third CSOV, which is our large offshore energy supply vessels. We still have three that
will be delivered plus one larger CSOV, an MP- ASV as we call it. So still 4 ships on order. We have
seen very healthy rates for our CSOV's. You can see an average of $65,000 a day in the first
quarter.
Second quarter already fully fixed at $62,000 a day and we have further vessels delivering and are
in talks with customers for both short-term and longer-term employment. Our CTV's are doing well
as well. After the traditionally slow winter period, we are now coming into the peak period of spring
and summer and you can see that our utilisation is above 90% and we are earning good rates of
an average of $3,400 a day. We're expecting, as I said before, these offshore wind market, offshore
oil and gas market to remain supported in the following months.
This wraps up the market update and I will now hand it over to Enya for the Q&A.
Enya Derkinderen:
Thank you, Alexander. We will now continue with the Q&A. If you would like to ask a question,
please raise your hand. Make sure to introduce yourself and unmute before asking your question.
For telephone participants: if you want to raise your hand, you can type star 5 and star 6 to unmute.
If in any case, you can't ask your question live, you can also use the Q&A section or you can send
an e-mail to Joris Daman. His contact details are also in the presentation.
We will now start with the first question, coming from Frode Morkedal. You can now unmute and
ask your question please.
Frode Morkedal:
Yes. Thank you. This is Frode at Clarksons. My first question is on capital allocation. So you
basically reached the 50% of the net loan to value target. Yeah.
So you've been deleveraging the balance sheet. You have plenty of liquidity and the newbuild
program looks fully funded.
So basically, how should we think about capital allocation from here?
Specifically on the dividend, you raised it from $0.16 to $0.20 on the interim dividend.
Is this a level that you would like to maintain? Or should we think about dividends as variable quarter
to quarter?
Ludovic Saverys:
Yeah, Frode. Let me take this one.
Indeed, we are, I think working on all sides, the deleveraging, the balance sheet especially.
With the bridge loan that we had, which was quite expensive, you know, we were able to repay that
fully, but we also reduced our margins on close to all our financings with our banks and I think that
was visible on the net finance expenses.
The CapEx program is coming to an end and I think on a dividend, which is as every quarter, the
Board decides what to do, whether it's paying accelerating down payments on debt capital,
potential M&A or distribution to shareholders. And I think we have made clear that once the
leverage targets are more into play like we are today, that we can start allocating more of the free
dollars to shareholders. Yet we do have a fully discretionary dividend policy. So we'll continue to
keep that. Historically, as I mentioned on the previous earnings calls, we've always paced between
50 and 60% of net profit distributed to the shareholders. And after announcing the 50% distribution
on the vessel sales, which was in December, we announced it.
The board decided that we would actually rather pay 50% on the whole profit of Q1. Now going
forward, I think that there's definitely every quarter analysis going to happen.
But the less leverage we have, the less CapEx that we have, less opportunities that could arise.
Like we mentioned on newbuilds, there's nothing really interesting in the core markets, dry bulk
and tankers today. I think distribution to shareholders will definitely continue to be a full focus on
our side. To your question, we didn't go from $0.16 to $0.20, we actually went from $0.16 to $0.64.
I think the parts, the $0.44 on share issue premium, it's a different way to a more fiscal optimised
way of reducing the withholding tax for mostly the retail shareholders and then the foreign
shareholders to do that. But I think going forward we will see how the market continues and we'll
definitely analyse the distribution to shareholders with a full focus.
OK, that's interesting. So, 50% looks reasonable. That's what I heard from you.
Ludovic Saverys:
That's what we also, we historically we pay to the shareholders, yes.
Frode Morkedal:
OK. Next question I had was.
Just started thinking, I mean the Golden Ocean acquisition: that looks quite well timed now, you
know, clearly dry bulk asset values have moved higher.
So I just had like a quick question. Do you have any sense of how much you're up on that
investment so far?
Alexander Saverys:
Frode, can you not do the calculation for us?
Ludovic Saverys:
Let's say that you know, based on the acquisition price, obviously we've done, but you have to take
the full costs because we did a semi levered buyout. Yes, we paid 50% with shares, but we did pay
50% with full financing. It is true that the returns on paper today look good, but as always I think
we need to ride the cycle fully before we can claim victory on that. But the market has picked up
somewhat faster than we were expecting on the medium term. And I think the spot strategy that
we've entailed is definitely setting us up to reap the benefits on the short term.
Frode Morkedal:
I did actually do the calculation. I think you're up at least 20%, but yeah
Alexander Saverys:
Only 20%, Frode? Oh, you’re selling us short.
Frode Morkedal:
Could be, could be. As a follow-up, I mean given where asset vendors are today, do you still see
value in further investments or is this becoming a more market to sell, you know further assets?
Alexander Saverys:
Well, it's good question Frode, I can repeat what I told you last time, I think, or I told someone else,
everything's pricey today. Let's not, you know, let's not lie about the facts. Newbuildings,
secondhand, everything has gone up. There will always be opportunities. I'm sure we will analyse
these opportunities. But right now, having sold most of our older vessels, we still might sell some
ships of older vintage or sell some ships. We see a very good price.
But what we want to do now is really ride the cycle, definitely on dry bulk and see what comes,
you know, after this high cycle. Because obviously for us, the story doesn't end when the cycle
turns. That's when the story begins.
Frode Morkedal:
Good answer. That's it for me. Thank you.
Ludovic Saverys:
Thanks.
Enya Derkinderen:
The next question is coming from Climent. Can you please unmute and ask your question?
Climent Mollins:
Yeah, hi, good afternoon. Thank you for taking my questions. I wanted to start by following up on
your finance expenses which declined significantly as you review step and refinancing facilities.
Did the 82,000,000 USD expenses for the quarter include any one offs due to refinancing? And
secondly, is the SG&A for Q1 a good proxy for the remainder of the year?
Ludovic Saverys:
Yeah. No, it's 2 great questions, Clements. On the net financing expenses, I think in the 82 there
were maybe 3 million one-offs. But so it's insignificant I would say.
So it is definitely on the current optimized debt situation, but not yet take into account some of the
margin reductions we're actually executing on roughly $2 billion of financing, which will only come
into play end of Q2. So there's more room to reduce the net finance expenses. On the SG& A: with
a 51 million we had in Q4 compared to 27 million in Q1; I think Q4 was definitely exceptional. I think
we mentioned that also on the last earnings call.
Q1 is definitely better, but we are as management, we keep on optimizing and looking at that.
Integrating companies is often harder than we think, but we're well on way to reach our targets on
the SG&A.
Climent Mollins:
OK. That's very helpful. Thank you. Could you talk a bit about whether you've had any impact on
the operations on of the two FSO's contracted with Qatar Energy on the back of the conflict?
Alexander Saverys
Yes, Clement. We have had some operational disturbances, but we are trying to get everything
back on track. As you know, the safety of our people on board is the most important one. And we
are in very close collaboration with NOC, who is our customer, to make sure that we can restart
the operations in a safe way.
Climent Mollins:
Makes sense. And final question from me, you've got 12 million profit from equity accounted
investees. To what does that refer specifically?
Ludovic Saverys:
Good question. It's reflecting the proportional profits that we made, at least that’s the companies
were in which we have small participations made.
This is, I would say, half of it is one-offs from these companies and it's a very diverse slew of
smaller participations from ammonia logistics to basically Japanese joint ventures.
But there is, I think, good smaller companies that deliver profit quarter on quarter. So there's
definitely some of that to stay in the coming quarters.
Climent Mollins:
Great. Good to hear. That's everything from me. I'll turn it over. Thank you.
Ludovic Saverys:
Thanks.
Enya Derkinderen:
The next one is Petter Haugen. You can now unmute and ask your question please.
Petter Haugen:
Good afternoon. This is Petter Haugen from ABG Sundo Kovir in Oslo. First, well, I would like to put
some emphasis on the Joris work on slide 25, that the slide showing the shortfall and the partial
refillment of what was lost is a very, I think, instructive way to think about this.
And one question in this context, would it be positive or sort of- if adjusted for distances, the same
slide just on ton milestone, so to speak, - would that be still in a negative territory or is it in positive
territory?
Alexander Saverys:
I think Joris can take that question.
Joris Daman:
It's fairly balanced and that was the main message here that, if you not only look at tons but at
tonne-miles, the situation is actually up until today, a balanced situation whereby that the lost
volumes are being balanced out by the additional distance. Of course, that only holds as long as
US exports keep the same levels and the other countries like Brazil, Guiana, Angola keep on, let's
say, the higher volumes than what we saw in the first 2-3 months of the year. That's the big
assumption of this slide.
Petter Haugen:
OK. So very balanced on tonne-miles wise. Thank you. Just one further question, in Q3 you
ordered one CSOV, the large version and also had options for five more. Is there any progress on
those options in terms of well either striking them or lapsing them?
Alexander Saverys:
Yeah, we still have time to lift the next option.
But right now, if you ask me, it looks very interesting. There's good demand for these assets, but
as long as we don't need to lift the option, we will still wait. The market can still change, but it is
definitely one of the segments that we are watching closely for potential newbuildings because we
still see value and the value at which we hold the options is interesting.
Name
OK. Could you elaborate a bit on what sort of employment you would potentially do on a newbuild
order, and also the delivery schedule for those options?
Alexander Saverys
That would be in 2028 and we would lift the option most probably without any employment
attached. We have decided on the CSOVs that we would operate on the spot market and if we see
long-term business, we would go for the long-term business. That's exactly what we've done with
the first two ships, what we're doing with the next vessels, it’s always a mix of spot employment
and longer-term employment, if that makes sense. You know that in this offshore wind market, if
you order some of these CSOVs with a charter attached, usually the returns are very, very low. So
if we lift the options, we will most probably, I mean never say never, we might find some customers
before we're lifting the option, but it will most probably be without any employment and then we
will work on the employment as we go.
Ludovic Saverys
And just to add to Alex, as the spot market today both in international wind, but also regional and
international oil and gas is actually very good. For us to do long-term charters, it really has to be
great rates. Otherwise, we just stay in the spot market and enjoy the rates we've shown on the
slides.
Name
Understood. Thank you. And just finally the options, all five of them, could you elaborate on when
those lapses?
Alexander Saverys
I think the first one is in a couple of months from now, end of the summer. That’s the first one, and
then we still have time for the following ones which is always with a couple of months interval.
Name
OK, I'm done. Understood. Thank you. That was all for me.
Alexander Saverys
Thanks, please.
Enya Derkinderen
We received some questions in the Q&A, so I will go to those questions. The first question:
The premium of nukes to capes in Q1 seemed quite low. Any particular reason for this? What
premium would you expect over time?
Ludovic Saverys
I think I'll take it from a financial point of view, Alex, you can take it from operational. It was as we
are delivering quite a bit out of the yards. There's a lot of repositioning on these ships, ballasting
to Brazil for instance. And so it's a more IFRS local discharge. I think the Newcastlemaxes on a
discharge to discharge basis would have been higher, but since we had a relatively much higher
repositioning, so ballasters that impacted the results.
Alexander Saverys
And I would say in a premium, it also depends of course on the height of the market, but you would
be anywhere between 15 and 30% depending on the market and of course depending also on the
fuel prices.
Enya Derkinderen
Moving on to the next question: Do you have any plans for the 25,000,000 treasury shares you
hold? We issue to outside holders as dividends used for acquisitions retire, I assume they do not
receive the dividends.
Ludovic Saverys
So the treasury shares, to make clear, do not get dividends, they cannot vote neither. Our company
has 290.2 million shares. That's what you really have to look at.
Retiring them, for us, there's part of the authorised capital, so that said the board discretion to use
them, to dividend to shareholders or for M&A acquisitions or other instruments. But today we don't
have any plans. We bought them quite inexpensively if you see, over the last years. I think this was
a good investment from a long-term investor, but we have no plans right now.
Enya Derkinderen
OK. Then the next one: With a cost per ship massively increased when the cycle turns, the recently
purchased ships will have a much higher breakeven level that could indicate what? If rates do come
down, there'll be a lot for sale signs at much lower prices.
Alexander Saverys
Is that a statement or a question?
If the market comes down and if owners are under duress, they will have to sell their ships at a
lower price. And it is clear that the breakeven of the whole fleet has gone up, not only because of
the high newbuilding prices, but also because of the higher second-hand prices. So it will be
indeed interesting to see when the cycle turns, how the market will react and how distressed sales
could potentially come to the market.
Enya Derkinderen
Then the next one: Could you please clarify whether any CMB.TECH vessels are currently blocked
in the Persian Gulf? If so, how many and what type of vessels are involved?
Alexander Saverys
There's a couple of ships that are indeed in the Persian Gulf right now. We don't communicate
about the details of the vessels and the vessel names, out of safety concerns for our crew which
is on board.
Enya Derkinderen
Then the next one: What is the ambition with respect to your green ammonia terminal project in
Namibia? What is the latest status? What are the timelines in CapEx requirements?
Alexander Saverys
Right now, no FID has been taken on that project. We are assembling all necessary information for
the investment and we hope to be able to say something more in the next quarterly call when we
have a better view on that file. So have a little bit of patience with us, but we will definitely mention
that in the next quarterly call.
Enya Derkinderen
And then moving on to the last question, this one is referring to Slide 25. It's a slide that Joris
explained from Euronav. How much crude oil, if any, is coming onto the world market from
Venezuela?
Joris Daman
Venezuela crude oil for April was roughly 1.2 million barrels per day. It increased with 150,000,000
barrels compared to March because of the political changes in the country, exports are being
increased. It's not the increase which is interesting. It's rather that those barrels are now being
transported on compliant vessels and no longer on any dark or grave fleet vessels. So it's a net
positive for crew tankers.
Enya Derkinderen
OK. We have one last question: Can you explain what the 20 million in other operating income
booked in Q1 is?
Ludovic Saverys
Yes, sure. It's an amalgamation of all smaller profits we took. This goes from claims we won, from
lawsuits or vessel claims we have had over the last couple of years. It's liquidated damages that
we deliver ships and then they deliver earlier or later, with shipyards as well. So it's a whole slew
of smaller ‘one offs’. There's half of it, or roughly it's a revaluation of some investments we hold in
smaller companies. Nothing meaningful, mostly ‘one offs’, but always nice to have when you can
book that on your balance sheet.
Enya Derkinderen
And I think that concludes the questions.
Alexander Saverys
Thank you very much, Enya. Thank you all of you for joining in this quarterly call. And I'm looking
forward to talking to you either at our General Assembly on Thursday or on the next call we
organise during the summer. Thank you. Bye, bye.
