Euronav Reports Lowest Freight Rates since 2013

Belgian tanker operator Euronav reported a sharp drop in core profit for the first nine months of the year as freight rates in the oil tanker sector continued to fall.

 

Excess tonnage in the global tanker market has put pressure on freight rates, as a large wave of new deliveries this year has offset scrapping.

 

"Freight rates remained under sustained pressure ... particularly in August as seasonally low levels of cargo and new tonnage entering the market combined to drive rates to lowest levels since 2013," Chief Executive Paddy Rodgers said in a statement.

 

The company reported nine-month core profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), of $185.6 million, down 47 percent from the previous year.

 

Average daily spot rates for its very large crude carriers (VLCCs) fell 30 percent to $18,875.

 

The company said the tanker market was under pressure from instability in oil producing regions such as Kurdistan, Nigeria and Libya and the potential extension of oil-production cuts to the end of 2018.

 

Recently officials from key oil producing nations Saudi Arabia and The United Arab Emirates have said they would be ready to extend a global oil production cut agreement.

 

Euronav said that so far in the fourth quarter - typically the strongest for tanker companies due to seasonal demand for oil - its VLCC fleet has earned around $26,000 per day.

 

Shares in the company were down 1 percent at 1003 GMT.


($1 = 0.8592 euros)

(Reporting by Alan Charlish, editing by Louise Heavens)