Antwerp-based tanker operator Euronav has announced solid quarterly profits for the second time this year and says that it expects to benefit from current positive market trends until well into 2016.
The company improved on its first quarter profits of USD80.86 million – its best since 3Q08 – with a second quarter surplus of USD92.40 million, ahead of analysts’ forecasts.
It said that the tanker market had been stable in the 2Q, with consistently strong freight rates for VLCCs and suezmaxes, as owners maintained the strong rate discipline they have been showing since the start of the year.
Spot rates were more than double those for 2Q last year at USD55,570 per day for VLCCs and USD41,886 for suezmaxes.
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Euronav said that the current quarter had also begun positively with freight rates rising in what was generally a weak period for the tanker sector.
Fundamentals were staying healthy, with limited vessel supply, growing demand for oil on the back of lower prices, higher supply thanks to record production and continuing growth as more Atlantic Basin oil headed for the Far East.
“Euronav is well-positioned to continue to benefit from these positive sector trends well into 2015, is conservatively leveraged, has a strong focus on maximising returns for shareholders in the form of dividends and is disciplined in terms of future growth opportunities,” the company said.
The company defended its recently announced acquisition of four VLCC newbuildings currently under construction at Hyundai Heavy Industries with options for four more, saying that, because they were “ex-yard” acquisitions, they would not add supply to the market.
Euronav has been a strong critic of undisciplined ordering of new tonnage by its fellow tanker operators which has led to extensive loss-making in the sector in recent years. Its stated policy is not to order newbuildings, adding to its fleet only by acquisition of existing vessels.