Euronav Sees "Remarkable" 2014, Still Makes Loss

The group's finance expenses almost doubled in 2014, weighing on results

Tanker and floating storage vessel owner-manager Euronav NV (Euronav) Thursday announced improved operating performance for 2014 compared to the prior year.

"2014 was a remarkable year for Euronav," said CEO Paddy Rogers.

Core revenue increased 55.6 percent year-on-year to $474.0 million in 2014 versus $304.6 million the prior year.

In addition, the group turned a slim operating profit of $11.5 million compared with an operating loss of $54.7 million in 2013.

The group also received a $30.2 million contribution from its joint venture very large crude carrier (VLCC) chartering operations with Frontline.

But a near doubling of finance expenses to $93.3 million saw the group post a net loss before tax of $51.5 million for the year and a loss after tax of $45.8 million.

Of the post-tax net loss, Euronav's tanker segment contributed negative $75.3 million, down from the prior year, while the group's floating storage (FSO) operations contributed a surplus of $29.5 million, consistent with 2013.

Voyage expenses and commissions, typically dominated by bunker costs, rose 48.6 percent year-on-year to $118.3 million, in a smaller increase than that seen for revenue.

Euronav said that it expected to continue to benefit from low oil prices and the corresponding reduction in bunker costs.

Swing to Operating Profit from Loss

During the year, Euronav purchased 15 VLCCs from Maersk Tankers Singapore Ltd. financed through the issuing of equity and debt to the market.

The group presented an upbeat picture for the short to medium term.

"The fundamental drivers for the tanker market, supply and demand for seaborne transport, are constructive and support the view of a robust market in both the short and medium term," said Euronav.

"Management believes that Euronav is well positioned for this market structure having expanded with the support of the capital markets during 2014 to become the largest, independent pure-play crude tanker platform in the world.

"In addition, management has deliberately positioned the fleet to have around 16,000 days open to the spot market for 2015 where we expect continued freight rate expansion."

Also in its Annual Report, Euronav said tanker markets should continue to grow in 2015 but are expected to remain volatile, a feature of the market which should be "embraced."