Euronav has revealed a big shift in its dividend strategy under the fresh ownership of the Saverys family.
The Belgian clan took a 53% stake in the VLCC and suezmax specialist in a deal that saw the other major investor, John Fredriksen, sell his stock and buy 24 VLCCs for his Frontline operation.
Euronav booked a gain of $323m in the fourth quarter from this huge $2.35bn deal, with a further $374m to follow in the first quarter of this year.
But chief financial officer Ludovic Saverys told an earnings call that no dividend will be paid while the family’s mandatory offer for the rest of Euronav’s stock plays out.
Euronav is also merging with the family’s clean shipping operation CMB.Tech.
Saverys said that many stakeholders and analysts have been asking about the capital return policy.
He explained: “Previous management and Euronav as a stand-alone pure-play tanker company had aimed to dividend out 80% of its net profits.”
In the future, if the CMB.Tech deal is completed in March, “the board of directors has decided that the dividend policy will be a full discretionary one”.
“I think CMB has a track record of rewarding its shareholders, but in terms of giving clarity to our investors, the board of directors will keep a full discretion on how many dividends will be paid based on the profits,” he added.
The company has indicated it plans to order 120 low-carbon ammonia and hydrogen-fuelled ships for billions of dollars over the next three to five years.
Liquidity leeway lengthens
Euronav made an underlying profit of $88m in the fourth quarter from “robust” freight markets, if sales gains are stripped out, Saverys added.
“Obviously with the sale of most of the VLCCs to Frontline, we have strengthened our liquidity dramatically,” he told the call.
At the end of the year, liquidity stood at $1.24bn. But after the delivery of 23 of the 24 VLCCs, this has risen to close to $2.5bn, he said.
Euronav is buying the family’s CMB.Tech green shipping business, adding low-carbon bulkers, container ships and offshore vessels.
The company will be renamed CMB.Tech and retain its dual listings in Brussels and New York.
This will be rubber-stamped at a special general meeting next week.
Saverys explained that only a simple majority is needed at the vote.
Somewhat understating the case, he added: “CMB can vote as well. So hence there is a high likelihood that the transaction will go through.”
