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Euronav’s New Dividend Policy Cheers Income Investors

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Cash flow

Euronav’s (EURN) operating cash flow in 2Q15 was $106 million, compared to $77 million in 1Q15 and negative net cash flow of $6 million 2Q14. With strong cash flows and management’s confidence in the crude (DBO) tanker freight market, the company has announced a new dividend policy to share its profits with the shareholders.

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 New dividend policy

  • On April 1, 2015, Euronav (EURN) announced its new clear and transparent dividend policy.
  • The company now intends to distribute at least 80% of its previous year’s annual net profit as dividends.
  • The dividend will be paid in two installments in May and September. The company did not pay any dividends between 2011 and 2014.

Dividends

  • The company announced an interim dividend of $0.62 per share to be paid later this month on September 22, 2015.
  • Earlier this year, the company paid a dividend of $0.25 per share in May. This brings the total dividend for 2015 under the new dividend policy to $0.87 per share, which equals 80% of net earnings.
  • The company believes the recent acquisition of four VLCCs will enhance the company’s capacity to pay dividends.
  • Analysts forecast the 2016 dividend will be $1.31 per share.
  • Analysts expect the forward four-quarter dividend yield to be $9.49.
  • The companies in the industry who pay dividends include Nordic American Tanker (NAT), Frontline (FRO), Teekay Tankers (TNK), DHT Holdings (DHT), and Tsakos Energy Navigation (TNP).
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