Euronav Results Up on Higher Charter Rates

Euronav found Q1 charter rates volatile but higher than last year

Euronav NV [EBR:EURN] reports it swung to a profit of $1.4 million in the first quarter after losing $10.7 million for the same period last year as charter rates rebounded.

The company's revenues rose 35 percent to $106.1 million.

The average spot rate for a very large crude carrier (VLCC) was $34,777 per day, up from $21,000 per day a year earlier.

For Suezmax vessels, average time charter rate rose to $27,350 from $23,400, while average spot rate hit $26,800, up from $16,750.

The results were hurt by $5 million in exceptional items, mostly connected with the acquisition of the Maersk Tankers VLCC fleet .

Euronav notes that rates have been "extremely volatile" so far this year.

"We believe, however, that there has been a significant improvement compared to the first quarter of 2013 when the rates were stable but low due to excess tanker capacity," the company wrote.

The company noted that changing patterns of oil supply and demand are affecting the tanker industry, with less transport from the Arabian Gulf and West Africa to the U.S, where domestic shale oil production is on the rise, but increased cargoes headed to India and China.

"As most of this incremental growth came from the Atlantic, it resulted in proportionately more ton-miles," the company wrote.

"We believe that the increase of refinery capacity in those regions and the forecast crude oil demand also indicate that this trend will continue throughout the year."

Euronav announced the deal to buy the 15 Maersk Tankers VLCCs in January, saying it would be a step toward "wider consolidation of the world's tanker fleet."