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One-time charge leads to lower earnings for Euronav

One-time charge leads to lower earnings for Euronav
Tanker shipowner Euronav saw its first half earnings decreased compared to the year-ago period due mainly to a one-time charge related to the termination of a joint venture deal.

Net profit for the six months ended 30 June 2016 was recorded at $153.69m, down 11.3% from $173.25m posted in the same period of 2015.

The result was negatively affected by a non-recurring charge of $24.15m arising from the termination of the joint venture with Bretta Tank Holdings involving four suezmax tankers.

Euronav’s first half revenue also fell by 2.9% year-on-year to $404.45m.

Looking ahead, Euronav believed that the current market condition of lower seasonal freight rates are exacerbated by a combination of short term disruptive factors that could persist through the third quarter.

“Notwithstanding short term headwinds Euronav anticipates a seasonal rate recovery into the winter supported by recent upgrades in anticipated crude demand (IEA) and if current disrupting market factors dissipate,” said Peter Rodgers, ceo of Euronav.

“Medium and longer term prospects for the tanker market remain constructive, underpinned by a solid recurring demand for crude, structural change in financing likely to constrain future vessel supply growth and a likely acceleration in the retirement of older ships from 2017 onward,” Rodgers commented.

So far in the third quarter, Euronav’s VLCC fleet operated in the Tankers International Pool has earned about $31,800 per day and 50% of the available days have been fixed. The suezmax vessels trading on the spot market have earned about $20,900 per day on average with 39% of the available days fixed.

Last month, Euronav joined hands with Frontline and Diamond S Shipping to form a joint venture called Suezmax Chartering, starting with a fleet of 43 ships for operations on the spot market.