Paddy Rodgers, one of shipping’s most high profile and eloquent figures, is to step down as chief executive officer of tanker giant Euronav later this year after nearly 20 years in the post.
No successor is yet in place to take over at the head of the world’s most valuable publicly-listed crude tanker owner, with Euronav starting a search to find a replacement by the end of 2019.
Rodgers, who has been at the forefront of consolidation moves in the last five years, said he and the Euronav board had been discussion about his succession for some time. Nevertheless, the announcement will come as a surprise to the market.
Rodgers said chief financial officer Hugo de Stoop would be potentially a very strong internal candidate since the company “might struggle to find someone better”.
“I’m hugely proud of the team and the company I’ve helped build over these years, but there comes a time to hand over the reins to someone new,” Rodgers told TradeWinds.
“I started in 1995 before becoming CEO in 2000, and it’s now five years since the Wall Street IPO. This company has achieved a great deal and can do a great deal more.”
Euronav chairman Carl Steen said: “We respect Paddy’s decision to step down after transforming Euronav under his stewardship.
"Euronav is in a strong position with sector low leverage, substantial liquidity and operational flexibility to take on the challenges from the tanker market going forward.
"Euronav’s strategy remains unchanged and the board and management team look forward to building on the legacy created by Paddy. ”
Over the last year, Rodgers has been an outspoken critic of the use of exhaust gas scrubbers to comply with the forthcoming IMO 2020 low sulphur fuel rules.
1989: Euronav name emerges as a subsidiary of CNN
1997: Euronav becomes tanker division of CMB
2000: Tankers International pool is formed alongside Frontline, Maersk Tankers and OSG
2004: Euronav is listed on the Euronext in Brussels
March 2005: Company buys 14 suezmaxes and two aframaxes.
January 2014: Euronav in $980m swoop for 15 VLCCs from Maersk Tankers
July 2014: Four more VLCCs added to fleet
January 2015: New York IPO
August 2015: further growth with quartet of VLCCs
2016: Suezmax chartering platform formed
August 2016: Acquisition of two VLCCs
October 2016: Two new suezmaxes purchased
January 2017: Balance sheet strengthened with sale and leaseback deal with Wafra Capital Partners.
May 2017: Euronav raises $150m from Norwegian bond market and confirms suezmax orders against long term deals with Valero
December 2017: Plan to merge with Gener8 Maritime creating largest public tanker company in the world
Euronav has no vessels being fitted with scrubbers, while many rivals are having them installed on at least some of their fleet.
“Our current policy is secure. We’re putting in place plans to secure our own fuel supply and hedging where necessary,” he said.
“Scrubbers continue to be seen by many as the ‘new gold’. It isn’t and it won’t be,” he asserted.
A fortnight ago Euronav announced strong results for the last quarter of 2018, helped by the best freight rates for large tankers in two years.
However, that upturn could not mask a poor year, which saw the company slump to a net loss $110m compared to a small profit of $1.4m in 2017. Revenue rose to $600m in 2018 from $513m, partly lifted by the acquisition of Gener8 Maritime which finally completed last summer.
The drawn-out takeover of Gener8 was only the latest in a string of major deals Rodgers has masterminded in recent years. In 2015 the company bought Maersk’s 15-strong VLCC fleet for $980m.
Today Euronav owns 67 vessels in a total fleet of 73, of which 45 are VLCCs.
Rodgers believes another merger would be possible to lift its fleet to 75 or 80 VLCCs before it ran into anti-trust risks.
Euronav is well regarded by financial markets. It has a strong balance sheet including $499m of undrawn loans and $175m in cash, and a market capitalisation equal to its two biggest rivals Frontline and DHT Holdings.
Euronav came close to collapse earlier this decade in poor markets which inflicted heavy losses in 2011 and 2012. Rivals including Overseas Shipholding Group were forced into bankruptcy protection, while Euronav survived intact.
However, Rodgers remains frustrated at the valuation put on the firm. “We put an awful lot of effort into building shareholder relations, and explaining the quality of our people and our operations, but the true valuation does not really come through.
The Arsene Wenger of shipping?
“Sometimes I feel a bit like Arsene Wenger,” he joked, referring to the former Arsenal football club manager who had a reputation for high standards but not winning enough trophies.
“You go to Burnley and lose 2-0 and have to explain where it all went wrong when you’re doing so much right.”
Rodgers said that after taking a short break when he leaves, he intends to remain in the industry although he has no specific plans yet.
“I remain passionate that this industry has some much more it needs to do, and better standards it can and must achieve."
He feels passionately that more attention needs to be put into how to make shipping safer for crews and make bigger strides to cut pollution.
“What I’ve learned from the incredible team that has come together at Euronav is that you can do better. This industry always puts the urgent ahead of the important. That has to change.”
An honour to serve
In a statement released on Monday morning, Rodgers said: “It has been a real honour and privilege to lead Euronav as CEO.
"The company has progressed from a family operation with 17 vessels to the largest crude tanker company in the world with 73 vessels, listed on both Euronext and NYSE.
"Having now completed in full the Gener8 merger I wish to pursue other opportunities and believe it is an appropriate time to hand over the baton of leadership of a strong and best-in-class large crude tanker business."
He added: I would like to thank all of the staff at Euronav for their dedication, unwavering support and professionalism in my time at the company”.
