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Euronav: Where Do Analysts View Its 4Q17 EBITDA?

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Analysts’ expectations

As we saw in the previous part of this series, Wall Street analysts expect Euronav’s (EURN) 4Q17 revenues to fall 18.7% year-over-year. In this part, we’ll see what analysts expect for Euronav’s EBITDA (earnings before interest, tax, depreciation, and amortization) for 4Q17, 2017, and 2018.

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EBITDA estimates

Since analysts estimate a rise in Euronav’s revenue compared to 3Q17, they also expect the EBITDA to rise. Their EBITDA estimates for 4Q17 are $60.89 million—a rise from $40.8 million in 3Q17, but a fall from $124.7 million in 4Q16. For 1Q18, the EBITDA estimates are $61.9 million. For 2017 and 2018, the estimates are $232.7 million and $253.9 million, respectively—compared its EBITDA of $476 million in 2016.

Why EBITDA matters?

EBITDA is an indicator of a company’s financial performance. It tells us about a company’s operating profit. Crude oil tanker companies are highly capital intensive and have high non-cash costs, including depreciation. So, it’s important to assess a company’s performance based on the EBITDA. Companies can also be valued based on their EV-to-EBITDA ratios.

EBITDA margins

Euronav’s EBITDA margin was 32.3% at the end of 3Q16. Based on the estimated revenue and estimated EBITDA, we’ve calculated the estimated 4Q17 EBITDA at 51%. The 3Q17 EBITDA margins for Euronav’s peers are as follows:

  • Nordic American Tankers (NAT) at -0.8%
  • Teekay Tankers (TNK) – 20.3%
  • Tsakos Energy Navigation (TNP) – 40.6%
  • DHT Holdings (DHT) – 32.7%
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