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Euronav in 4Q17: A Look at Costs and Earnings

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Feb. 1 2018, Updated 12:55 p.m. ET

Euronav’s costs

Euronav’s (EURN) central cash costs include voyage expenses and vessel operating expenses. In 2017, Euronav’s vessel operating expenses accounted for ~28% of its total operating expenses, while its voyage expenses represented 11.5% of its total operating expenses.

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4Q17 costs

Euronav’s vessel operating expenses fell to ~$33.9 million in 4Q17—compared to ~$37.3 million in 4Q16 and $37.9 million in 3Q17. Below are a few key takeaways:

  • YoY (year-over-year), Euronav’s vessel operating expenses fell. However, Euronav’s revenues fell by a greater magnitude, which had a negative impact on its expense-to-revenue ratio. The ratio dropped to 74% in 4Q17—compared to 86% in 4Q16.
  • Euronav’s voyage expenses were ~$14.2 million in 4Q17—compared to ~$15.4 million in 3Q17 and $16.4 million in 4Q16.
  • Euronav’s depreciation expenses account for almost 42% of its total operating expenses. It’s important to assess the company’s EBITDA (earnings before interest, tax, depreciation, and amortization) more than its net profit.

EBITDA

In 4Q17, Euronav’s EBITDA was lower than 4Q16 but higher than 3Q17. Euronav recorded an EBITDA of $49.28 million in 4Q17—compared to $40.8 million in 3Q17 and $124 million in 4Q16. Below are a few takeaways:

  • Euronav’s EBITDA was 60% lower YoY in 4Q17.
  • Euronav’s EBITDA was among the lowest in the fourth quarter in the past two years.
  • Euronav’s EBITDA margin rose to 41.7% in 4Q17—compared to 32.3% in 3Q17. However, Euronav’s EBITDA is 66.2% lower than 4Q16.

In 3Q17, the EBITDA margins for Euronav’s peers were:

  • 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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