Belgian tanker giant Euronav has reinstated its dividend following a deal between its two major shareholders to split the fleet.
But the VLCC and suezmax company warned that spending on the energy transition will take a bigger share of cash allocation in future.
The company scrapped the third-quarter payout as it awaited a change of control following the Frontline and Compagnie Maritime Belge transaction.
John Fredriksen’s Frontline paid $2.35bn for 24 modern VLCCs and the CMB-controlling Saverys clan bought the tycoon’s stake.
The board has now agreed to pay $0.57 per share for the quarter.
The company said this reflected positive freight market conditions in the large crude tanker market.
Fearnley Securities said this equated to a 1% yield.
“This favourable tanker market environment continues into Q4 2023 and is anticipated to remain robust during calendar year 2024,” Euronav said.
But it added: “As the company transitions from a pure crude tanker vehicle toward an energy transition growth company, investors should expect to see a more equal balance between growth investments in the energy transition and cash distributions to shareholders.”
The company’s future strategy has three pillars: fleet diversification, decarbonisation and optimisation.
But the shipowner said: “The core for Euronav will remain the crude tanker operation.”
Very positive tanker prospects
The company sees prospects for this market as remaining very positive, supported by strong industry fundamentals.
Euronav points to a low orderbook, a global fleet age at a 22-year high and robust demand for crude.
CMB now holds 49% of Euronav and has to launch a mandatory takeover offer.
The offer price of $18.43 per share has been reduced to $17.86 due to the dividend payment.
There is no intention to squeeze out existing shareholders, however, as CMB intends to maintain Euronav’s listings in Brussels and New York.
Euronav said consensus freight rate forecasts for 2024 stand at $50,000 per day for VLCCs and suezmaxes.
In addition, with asset values approaching all-time highs, bosses will have the “optionality to recycle capital from the tanker market into the energy transition over the medium term,” the shipowner added.
So far in the fourth quarter, Euronav VLCCs in the Tankers International pool have earned $36,000 per day, with 84% of available days fixed.
The spot suezmax fleet has averaged $42,000 per day from 72% coverage.
