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Behind Euronav’s New Fixed Dividend Policy

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Euronav’s cash flow

Euronav’s (EURN) operating cash flow in 2Q17 was $59 million, compared with $74 million in the previous quarter. In this part of our series, we’ll discuss what the company intends to distribute as a dividend.

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Dividend policy

In April 2015, Euronav had revised its dividend policy. The company then intended to distribute at least 80% of the previous year’s annual net profit as dividends. However, the company has now changed the dividend policy and adopted a fixed dividend policy. Euronav will now pay a fixed cash dividend of $0.06 per share in each half of the year. This dividend will be paid in spite of the freight market conditions.

In its latest conference call, Euronav stated that if the company would have continued with the earlier dividend policy, the interim dividend would likely have been close to $0.

Dividend history

Since 2015, when Euronav announced its distribution policy, the company has paid out $391 million in cash dividends, which equals $2.46 per share, and $7 million in share buybacks, which comes to $0.04 per share.

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Dividend

In May 2017, Euronav paid a dividend of $0.22 per share. Before this, it paid a dividend of $0.82 per share in May 2016 and $0.55 in September 2016. The company plans to pay $0.12 per share every year going forward.

Dividend yield

Euronav’s dividend yield is now 2.71%. Below are the dividend yields of its major peers:

  • Nordic American Tankers (NAT): 7.48%
  • Navios Maritime Midstream Partners (NAP): 18.80%
  • Teekay Tankers (TNK): 7.72%
  • DHT Holdings (DHT): 2.07%
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