Letter of the Chairman
Quick facts
Highlights
Special Report: Getting Smarter Through Pooling
CORPORATE REPORT
DIRECTORS’ REPORT
Vision and Mission
Company Profile
Highlights 2015
Corporate Governance Statement
The Euronav Group
ACTIVITY REPORT
Products and Services
Ship Management
Fleet of the Euronav Group as per 31 December 2015
CORPORATE SOCIAL RESPONSIBILITY
Health, Safety, Quality, Environment and Society
Human Resources
GLOSSARY
FINANCIAL REPORT
01
02
05
06
12
14
16
30
54
56
60
62
66
72
74
78
KEY FIGURES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 2008 - 2015
(in thousands of USD)
2015
2014
2012
2011
2010
2009
2008
Revenues
EBITDA
EBIT
Net profit
846,507
562,178
351,972
350,301
11,527
-54,714
-45,797
-89,683
-118,596
410,701
120,719
-56,794
394,457
128,368
-40,155
-95,986
525,075
260,298
88,152
19,680
467,844
195,265
31,362
-17,614
858,983
657,452
512,579
402,468
2013
*Restated
304,622
82,244
473,985
172,481
TCE** year average
2015
2014
2013
2012
2011
2010
2009
2008
VLCC
Suezmax
Spot Suezmax
55,055
35,790
41,686
27,625
25,930
23,382
18,300
22,000
16,600
19,200
24,100
16,300
18,100
27,100
15,400
36,100
30,600
18,000
33,000
31,750
20,800
95,700
41,650
-
In USD per share
2015
2014
2013
2012
2011
2010
2009
2008
Number of shares***
155,872,171 116,539,017
50,230,437
50,000,000
50,000,000
50,000,000
50,000,000
50,080,137
EBITDA
EBIT
Net profit
In EUR per share
3.61
2.26
2.25
2015
1.48
0.10
-0.39
2014
1.64
-1.09
-1.79
2013
2.41
-1.14
-2.37
2012
2.57
-0.80
-1.92
2011
5.21
1.76
0.39
2010
3.91
0.63
-0.35
2009
13.13
10.24
8.04
2008
Rate of exchange
1.0887
1.2141
1.3791
1.3194
1.2939
1.3362
1.4406
1.3917
EBITDA
EBIT
Net profit
History of dividend per
share
3.31
2.07
2.06
1.22
0.08
-0.32
1.19
-0.79
-1.29
1.83
-0.86
-1.80
1.98
-0.62
-1.48
3.90
1.32
0.29
2.71
0.44
-0.24
9.43
7.35
5.77
2015
2014
2013
2012
2011
2010
2009
2008
Dividend
Of which interim div. of
Pay-out ratio*****
1.69****
0.62
80%
0.00
0.00
N/A
0.00
0.00
-
0.00
0.00
-
0.00
0.00
-
0.10
0.10
-
0.10
0.10
-
2.60
1.00
46%
*
**
The comparative figures for 2013 have been restated following the application of IFRS 10 & IFRS 11 on Joint Arrangements.
Time Charter Equivalent.
***
Excluding 466,667 shares held by the Company in 2015 (2014: 1,750,000 shares).
****
The total gross dividend paid in relation to 2015 of USD 1.69 per share is the sum of the dividends paid in May and September 2015 in
addition to the proposed amount of USD 0.82 per share proposed to the Annual Shareholder’s Meeting of 12 May 2016.
***** Ratio is based on the actual exchange rate EUR/USD on the day of the dividend announcement if any.
Since 2008, the Board of Directors follows a policy of always considering paying out an interim dividend and proposing a final dividend
subject only to results, investment decisions and outlook.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2008 - 2015
(in thousands of USD)
ASSETS
Non-current assets
Current assets
31.12.2015 31.12.2014 31.12.2013 31.12.2012 31.12.2011 31.12.2010 31.12.2009 31.12.2008
2,665,694
375,052
2,558,505
537,855
*Restated
1,728,993
191,768
2,065,448
297,431
2,159,442
291,874
2,337,131
307,083
2,500,550
286,116
2,279,701
341,452
TOTAL ASSETS
3,040,746
3,096,360
1,920,761
2,362,879
2,451,316
2,644,214
2,786,666
2,621,243
LIABILITIES
Equity
Non-current liabilities
Current liabilities
1,905,749
955,490
179,507
1,472,708
1,328,257
295,395
800,990
874,979
244,792
866,970
1,186,139
309,770
980,988
1,221,349
248,979
1,078,508
1,314,341
251,365
1,071,629
1,463,456
251,581
1,178,326
1,181,793
261,124
TOTAL LIABILITIES
3,040,746
3,096,360
1,920,761
2,362,879
2,451,316
2,644,214
2,786,666
2,621,243
*
The comparative figures for 2013 have been restated following the application of IFRS 10 & IFRS 11 on Joint Arrangements.
The Euronav share
Share price evolution 2015
(in USD)
■ Share price NYSE in USD
■ Share price Euronext Brussels adjusted into USD
Daily volume of traded shares 2015
(aggregate of NYSE and Euronext Brussels)
17
16
15
14
13
12
11
10
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Convertible notes
On 24 September 2009 the Company issued 1,500 subordinated, fixed-
rate, non-guaranteed convertible bonds maturing 31 January 2015 for
a total of USD 150 million.
On 1 February 2013 the Company launched an exchange offer on all
outstanding bonds with maturity 31 January 2015 in exchange for newly
issued convertible bonds maturing 31 January 2018. In aggregate,
1,250 bonds (USD 125 million) were offered meaning that only 250
bonds, maturing in 2015, remained outstanding, representing a total
amount of USD 25 million.
On 31 January 2015 the 250 remaining outstanding notes issued in
2009 and due in 2015 with a face value of USD 100,000 each, were fully
redeemed at par. Euronav held 18 of these notes. As of 9 April 2014 all
notes due in 2018 were converted or redeemed. Currently, there are no
convertible notes that remain outstanding.
50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Perpetual securities
On 13 January 2014 Euronav issued 60 perpetual convertible preferred
equity instruments for a total issuance amount of USD 150,000,000.
The instruments were issued at par and bear an interest of 6% during
the first five years payable annually in arrears in cash or in shares at
the option of the Company. The price against which the instruments
could be contributed was EUR 5.776000 (or USD 7.928715 at a EUR/
USD exchange rate of 1.372700) per ordinary share. The Company
had an option to force the contribution if (i) the share price reached
a certain level over a certain period of time and (ii) the Company had
completed a listing in New York (NYSE or NASDAQ).
On 6 February 2014 the Company’s share capital was increased
following the voluntary contribution in kind of 30 perpetual convertible
preferred equity instruments which resulted in the issuance of
9,459,286 new ordinary shares.
On 30 January 2015 Euronav issued a mandatory contribution notice
to exercise its right to request the contribution of the 30 outstanding
perpetual convertible preferred equity securities which on 6 February
2015 resulted in the issuance of 9,459,283 new ordinary shares.
Currently, there are no perpetual convertible preferred equity
instruments outstanding.
Euronav’s shareholders’ structure
According to the information available to the Company at the
time of preparing this annual report and taking into account
the latest declarations, the shareholders’ structure is as
shown in the table:
Shareholder
Saverco NV1
Victrix NV1
Other
Total
Euronav (treasury shares)
Number of shares Percentage
17,026,896
10.69%
9,245,393
850,000
5.81%
0.53%
132,086,660
82.97%
159,208,949
100.00%
1 Including shares held directly or indirectly by or for the benefit of the
ultimate beneficial owner
Euronav’s shareholders’ structure
According to the information available to the Company at the
time of preparing this annual report and taking into account
the latest declarations, the shareholders’ structure is as
shown in the table:
Shareholder
Saverco NV1
Victrix NV1
Euronav (treasury shares)
Other
Total
Number of shares Percentage
10.69%
5.81%
0.53%
82.97%
100.00%
17,026,896
9,245,393
850,000
132,086,660
159,208,949
Shareholders’ diary 2016
Thursday 28 July 2016
Announcement of second quarter results 2016
Thursday 25 August 2016
Announcement of final half year results 2016
Wednesday 31 August 2016
Half year report 2016 available on website
Monday 31 October 2016
Announcement of third quarter results 2016
1 Including shares held directly or indirectly by or for the benefit of the
ultimate beneficial owner
Thursday 26 January 2017
Announcement of fourth quarter results 2016
Representation by the persons responsible for the financial
statements and for the management report
The Board of Directors, represented by Carl Steen, its
Chairman, and the Executive Committee, represented by Paddy
Rodgers, CEO, and Hugo De Stoop, CFO, hereby confirm that,
to the best of their knowledge:
• The financial statements as of 31 December 2015 presented
in this annual report were established in accordance
with applicable accounting standards (IFRS or standard
accounting legislation) and give a true and fair view, as
defined by these standards, of the assets, liabilities, financial
position and results of Euronav NV.
• This annual report includes a true and fair view of the
evolution of the activities, results and situation of Euronav
NV and contains a description of the main risks and
uncertainties the Company may face.
Shareholders’ diary 2016
Thursday 28 July 2016
Announcement of second quarter results 2016
Thursday 25 August 2016
Announcement of final half year results 2016
Wednesday 31 August 2016
Half year report 2016 available on website
Monday 31 October 2016
Announcement of third quarter results 2016
Thursday 26 January 2017
Announcement of fourth quarter results 2016
Representation by the persons responsible for the financial
statements and for the management report
The Board of Directors, represented by Carl Steen, its
Chairman, and the Executive Committee, represented by Paddy
Rodgers, CEO, and Hugo De Stoop, CFO, hereby confirm that,
to the best of their knowledge:
• The financial statements as of 31 December 2015 presented
in this annual report were established in accordance
with applicable accounting standards (IFRS or standard
accounting legislation) and give a true and fair view, as
defined by these standards, of the assets, liabilities, financial
position and results of Euronav NV.
• This annual report includes a true and fair view of the
evolution of the activities, results and situation of Euronav
NV and contains a description of the main risks and
uncertainties the Company may face.
Dear Shareholder,
the acquisitions and capital
T he year 2015 has been a momentous year for Euronav.
Following
raising
transactions of the last two years, the tanker shipping
market provided the environment for those transactions to
deliver meaningful results for you, the shareholder, as well as
for the other stakeholders. This was the best year, financially,
since 2008 for Euronav, delivering earnings per share of USD
2.25. The Company is rightly proud of its anticipation, good
planning, hard work and effective execution, but all of this
still depended on a supportive market structure. In a spirit
of enlightened self-interest, the Company and the Tankers
International Pool have continued to lead sector thoughts
and expectations and to drive ambitions for the industry as a
whole, and can take great satisfaction from the outcome.
Many energy and some shipping commentators still have
not understood that the currently low oil price is caused by
oversupply rather than weak demand. This lower price,
caused by oversupply, has not only reduced the most important
variable cost for operating tankers, that is fuel, but more
importantly stimulated demand by putting oil back in the price
range of lower income users. This is much needed as oil had
been marginalized by excessive price for the seven years from
2008 until the second half of 2014. If the price now goes back
up as a result of greater demand, this should also be good for
tanker operators as demand is the key issue, not price.
Euronav in particular is able to generate strong cash flows and
investors can directly benefit thanks to the Company’s clear
policy to return value to shareholders.
On behalf of the Board and the Company I would like to
express our particular thanks and appreciation to the former
Chairmen of Euronav who left the Board during the last year.
Peter G. Livanos (Chair 2014 to 2015) and Marc Saverys (Chair
2003 to 2014) have been the key architects of Euronav, working
together for over a decade to combine a strong entrepreneurial
culture with one of service and commitment to the industry.
Their ‘longer view and vision’ is embedded in the Company
and is essential in prospering in shipping and in retaining that
prosperity, particularly in turbulent financial markets.
I have a long history in shipping and offshore and particularly
in the fields of finance and risk. I am looking forward to adding
this experience to the skill set of the Board and sharing it
with the excellent management team who have such a strong
proven track record in this sector.
2016 has started well for our business, and whilst capital
markets are facing numerous headwinds, Euronav will
continue to look for opportunities to grow from its well
established position of strength whilst continuing to reward
your participation.
This misunderstanding has held back the share price at
different times during the last year, and more recently the
share has also been affected by the general equity market
sell off. Nevertheless, the Company is well positioned to be
an unusually good alternative investment for energy investors
who have been severely hit by a low oil price environment.
Unlike most of the oil services companies, the tanker industry
should benefit from a low oil price.
“
THE TANKER INDUSTRY
SHOULD BENEFIT FROM A
LOW OIL PRICE. EURONAV
IN PARTICULAR IS ABLE TO
GENERATE STRONG CASH
FLOWS AND INVESTORS
CAN BENEFIT THANKS TO
THE COMPANY’S CLEAR
POLICY TO RETURN VALUE TO
SHAREHOLDERS.
“
Thank you for your continued support,
Carl Steen
Chairman
Letter of the Chairman 1
QUICK FACTS
562,178,000
EBITDA
55* VESSELS
THE WORLD’S LARGEST, INDEPENDENT,
QUOTED CRUDE TANKER PLATFORM
2 FSO
2.8 MILLION BARRELS
AVERAGE AGE: 10 YEARS
22 SUEZMAX
1 MILLION BARRELS
AVERAGE AGE: 10 YEARS
30 VLCC
2 MILLION BARRELS
AVERAGE AGE: 6 YEARS
1 V-PLUS
3 MILLION BARRELS
AVERAGE AGE: 12 YEARS
EURN
LISTED
EURONEXT
EURN
LISTED
NYSE
* Including TBN Anne which is expected to be delivered in May 2016.
2 Quick facts
2,847
EMPLOYEES
About 2,700 seafarers of many different nationalities work aboard Euronav
vessels. Their nationalities are marked by a dot on the map above.
In addition, Euronav has approximately 147 employees troughout its shore-
based offices in London, Nantes, Antwerp, Singapore and Piraeus. This
geographical span across Europe reflects a deep-rooted maritime history
and culture built up over generations.
Quick facts 3
4 Highlights
HIGHLIGHTS
28 JANUARY 2015
Euronav successfully concludes its IPO on the
New York Stock Exchange, the most reputable
stock market in the world, and becomes the
world’s
independent quoted crude
largest
tanker platform.
1 APRIL 2015
Euronav announced its intention to return 80%
of its annual result to shareholders.
16 JUNE 2015
Euronav acquires four VLCCs as resales of
existing newbuilding contracts for an aggregate
purchase price of USD 384 million or USD 96
million per vessel. The Antigone, Alice and
Alex have been delivered in September 2015,
January 2016 and March 2016 respectively. The
Anne is expected to be delivered in May 2016.
1 OCTOBER 2015
Euronav was awarded Company of the Year
by Lloyd’s List. The Lloyd’s List Awards are a
celebration of the best the shipping industry
has to offer.
3 DECEMBER 2015
Euronav’s Board of Directors unanimously co-
opted Mr. Carl Steen as member of the Board
and elected him Chairman. In addition to his
leading role in banking, Mr. Steen has many
years of experience on boards of publicly traded
companies.
Highlights 5
SPECIAL REPORT:
GETTING SMARTER THROUGH POOLING
INTRODUCTION
Each year, we will issue a special report focusing on
an area that we believe is not only worth highlighting
but also misunderstood in our sector. By doing so, we
will fulfill one of our missions which is contributing to the
education, modernization and professionalization of the
stakeholders of our old industry.
Last year, we focused on how bulk1 tramp2 shipping
companies like Euronav sell their services and how the
commodity nature of the sale produces some quite strange
consequences, unless managed carefully by participants in
the market. This is once more demonstrated in our sister
industry, the dry cargo3 market, which is undergoing a
surplus of vessel supply. One can see that 7.2 billion tons
of cargoes have been carried for net freight at close to zero
cost during 2015. The owners have chased each other to the
bottom and yet supply of transportation remains one of the
most necessary services in the world. Fortunately, this is
not currently happening in tanker transport and there is a
solution to avoid this situation in the future.
1 Bulk cargo is commodity cargo that is transported unpackaged in large
quantities. The containment for this type of cargo is the tanks or holds
of the ship.
focus on
The ship owner dilemma
Too many ship owners
outperformance; whether they do better than other
ship owners. This often leads them to undersell their
services in the hope of perceived marginal gains (by
making sure they get a cargo sooner rather than later)
over the other ship owners.
their relative
When there is one cargo and two ships in position, the
two owners will often discount each other over several
bidding rounds to get the cargo instead of looking into
the near future to determine whether there is a good
chance to get a second cargo. The time waiting may
be perceived as a loss of potential revenues. In such a
scenario they BOTH lose money as the combination of
two ships and one cargo takes the market down. Giving
a discount to their services is detrimental because each
voyage charter is a separate commodity negotiation
which needs to be priced as precisely as possible to
gain real absolute value that provides an acceptable
or economic return to capital. By underselling their
services, they may cut waiting time but often the
discount is greater than the cost of waiting for the next
cargo priced at a higher market. In the long run, the
reason why relative value is irrelevant is simply that
weak performance does not cause underperforming
ships to leave the market. This has been demonstrated
over the last cyclical downturn. Relative outperformance
will almost never deliver appropriate reward to capital…
It just lowers the market for all capital.
Furthermore, the bidding does not reflect competitive
advantages available to a better run ship and therefore
puts running a safe service at risk for the customer and
the environment.
2 Unlike liner businesses which run between predetermined ports
regularly like trains, trampers go wherever the cargo is and carry it to
wherever it wants to go, within reason, like taxi cabs.
3 The carriage of iron ore and coal in bulk.
The only way to resolve this dilemma is to be part
of a platform such as a pool, which actively markets
available tonnage every day and by doing so can collect
relevant information to price the freight appropriately.
6 Special Report
“
TOO MANY SHIP OWNERS FOCUS ON WHETHER THEY DO BETTER
THAN OTHER SHIP OWNERS AND THEREFORE UNDERSELL THEIR
SERVICES IN THE HOPE OF PERCEIVED MARGINAL GAINS.
THIS MISSES THE POINT BECAUSE IN THIS SCENARIO THEY BOTH
LOSE MONEY AS THE COMBINATION OF TWO SHIPS AND ONE CAR-
“
GO TAKES THE MARKET DOWN.
WHY SIZE MATTERS
Vessels should be fixed on best terms to maximize long-term
average sustainable revenues. In this regard, owners may focus
on minimizing bunker consumption or optimizing speeds to
arrive at the load ports just in time. When a voyage is fixed, the
pool manager will order a vessel to the load port for a specified
loading range and for an estimated amount of bunkers to be
used in performing the voyage. Whilst economies of scale of
operating a large fleet (such as discount on buying bunkers
or minimizing overheads) can improve the net result on that
individual voyage, it cannot impact the market levels.
But the real power of pooling comes from better market
knowledge and the opportunities this offers the pool manager.
Not only is it better to optimize the voyage earnings through
synergy but also to price the whole market at adequate
economic levels through better knowledge and more
transparency.
The earnings of ships come from the movement of cargoes.
So when transport is required for a cargo, the cargo owner
will approach several brokers and sometimes owners directly.
That creates a Dutch auction for the cargo move. The lowest
bidder will win or at least set the contract rate that clears the
market for the other bidders.
The broker is usually aligned with the cargo owner, not the
ship owner. Each broker hoping to make a commission on the
contract conclusion will encourage ‘his ship owner’ to bid low
enough to win the auction. The ship owners will be guided as
to who else is bidding and how low they have to bid to succeed.
The ship owners must have good information to know who is a
real competitor and who is not. To be a real competitor a ship
must be of the right age, type and class and be acceptable for
the customer under the OCIMF vetting regime4.
4 Vetting: The Oil Companies International Maritime Forum (‘OCIMF’) set
up a system for inspecting ships to ensure they are fit for purpose. They
use a system called SIRE, Ship Inspection Report Evaluation, which
requires six monthly inspections. Most cargo moves require a SIRE
inspection within the last six months and each oil company is free to
decide if it considers the inspection report satisfactory. The SIRE report
system can only be viewed by the members of OCIMF not by brokers or
ship owners.
The vessel should also be reliable. Only ships which are free
of cargo and close enough to reach the load port on the dates
given can realistically compete.
Special Report 7
This creates a mini market for each and every cargo, which
comprises those ships that can work that cargo. This
minimarket is defined by time and location. If many ships
are truly available for the cargo, the mini market auction will
take the current market level down. If the number of ships
realistically available is limited, then, provided the owner is
aware of this, the market level should go up. This is regardless
of the global supply of tankers. There is nothing a pool can
do regarding the direction of the market price movement
but it can influence the scale of this move by having good
alternatives through better information. The information
should guide the owner in taking the decision to wait for a next
fixture that might be priced at a higher market level or take
the fixture at hand even if it is at a discount.
The ship owner is always at a disadvantage as the auction is
controlled by the cargo owner who has all the bids. The cargo
owner also knows which ships are cleared for him to use and
what other cargoes need to be moved. There is no uniformity
of information relating to bids or true availability of competing
ships or even future cargoes. The terms of trade in tanker
shipping are asymmetric and favor cargo interests. Pooling
arrangements can try to even this structure up to some small
degree by having a clear view on the balance of truly available
ships. For the ship owner, increased market visibility through
better information is the true added value of a good pool.
Increased visibility broadens market knowledge therefore
improving pricing.
Speed is also critical in the management of vessels in the spot
market. Speeding up (and remember this may worsen voyage
economics) serves a negative purpose if it accumulates the
number of ships bidding on a cargo (increasing the supply).
It can worsen the economics of the individual voyage that
is about to be performed and may take the whole market
level down through increasing supply. Ship owners and time
charterers need to focus on bunker cost management and
should only speed up for a specific cargo that they are likely
to fix and then, only sufficiently to arrive just in time for the
cargo loading dates.
IMPROVING MARKETS
AND LOWERING COSTS
The use of size to seek economies of scale is well known. In
commercial shipping it is effective… with some caveats. Pools
operating the ships of smaller owners allow those owners
access to market information, which is up to date, accurate
and in-depth market information. Furthermore, the pool
can access bunkers in volume, quality and with good price
certainty. The use of a global agent improves management of
cash and costs for voyage expenses. The collection of freight
and demurrage is improved and removes one area in which
most owners want less of a relationship with the customer. All
of these synergies improve the individual voyages but it is the
improvement of the market that should drive ship owners to
pool their vessels, unless they are already operating them in a
significantly sized own fleet. At Euronav, we feel it is still worth
pooling despite having a fleet of 30 VLCCs5.
5 Including TBN Anne which is expected to be delivered in May 2016.
“
MANY SMALL OWNERS BELIEVE THAT THEY DO NOT NEED TO
POOL, PARTLY BECAUSE THEY ARE REASSURED BY THEIR
CHARTERING MANAGERS, THAT THEY CAN `OUTPERFORM’ THE
“
POOLS.
8 Special Report
Many small owners believe that they do not need to pool, partly
because they are reassured by their chartering managers, that
they can ‘outperform’ the pools. On average VLCCs perform
four to six voyages a year so for a ship owner of five VLCCs the
chartering desk of that ship owner will be in the market only
twice a month, hardly a global view.
In 2014 and 2015 the tanker market was improving from a
four-year trough between 2010 and 2013. The markets were
in a noticeably tighter balance, to those who are in the market
every day, yet the improvement in earnings came almost
entirely from a reduction of variable voyage costs through
falling bunker prices. Still, owners failed almost completely
to press the market when it was in their favor. This is the
lost opportunity caused by the small owners operating in
an increasingly industrialized market with limited or little
real market knowledge. It could have been worse but pool
leadership probably prevented the market repeating the
uneconomic earnings levels of 2013.
There is much more to come as developing software,
algorithms and using new data sources become possible.
But to benefit from a predicted uptick in a particular region
an owner can only benefit if its ship is not on the other side
of the world. The pool, if it is large and well run, can provide
a softening effect not just in covering all regions but also in
smoothing time-driven peaks and troughs. A pool can be
present all the time in many more regions and spread risk
across time and place by blending the voyage returns but
most importantly by increasing the chances of pressing up the
value of being in a particular place at a particular time whilst
providing an excellent service to the customer.
WHAT SORT OF POOL
A revenue pool
A revenue pool is purely a means for equalizing earnings of
a group of ships whose earnings are notionally ‘pooled’ but
have not been paid into the same bank account, balancing
payments are then made between ships. It has limited benefits
other than to smooth out the fluctuations of individual voyages
such as market volatility and weather conditions. As the ships
are not operated as a group under a single charterer/operator
the opportunities for improving fixtures and offering better
logistical solutions to the customer do not arise.
A tonnage pool
A tonnage pool has ships placed under commercial and
operational management of a pool manager. A contract which
incorporates a series of clauses from a time charter is used
to establish the pool manager as the disponent owner of the
vessels. This allows the pool manager to enter the market
on behalf of the pool participant with a view to optimize
the commercial and operational performance of the ships.
Operating expenses such as crew, maintenance and insurance
remain the responsibility of the ship owner.
The benefits only arise from operating ships of the same
size, type and class. Being an operator of a large number of
Aframaxes does not help in fixing a VLCC. Running a number
of pools doesn’t provide the requisite skill for managing all
markets either.
In the case of a tonnage pool, the purpose of pooling is to
share the operational earnings from the voyage charter
market, at the daily net revenue level, between the vessels
that participate in the pool in any revenue period.
The net revenue calculation is based on three elements:
1. the revenue, comprising gross freight (i.e., the amount of
money the cargo owner has to pay to transport the cargo)
and demurrage6;
2. minus the voyage expenses, comprising commission,
bunkers (from discharge of the last cargo carried to
discharge of the cargo contemplated by the voyage) and
port expenses;
3. and divided by the time taken to perform the voyage from
discharge port to the next discharge port having carried a
cargo in between.
A pool of information?
An information pool gathering and organizing market
information collected by the participants and providing a
system organizing information in a way that is transparent
and consistent would allow commercial and operational
management of each pool participant to make better business
decisions when fixing their ships. The managers of each
participant could remain independent and responsible for
everything as they trade their own ships independently. The
main benefit would be enabling participants to access more
independent market information, upon which they can rely, so
making sure they price their services accordingly. This sort of
virtual pool may be only a step away with the development of IT.
Each vessel contributes to the pool and will receive from the
pool its individual allocation, which is based on the averages of
the contributions of all the vessels in the pool. The differential
between contribution and allocation should be caused by
the changes in the market rate at the time the voyages were
entered into, the changes in the voyage expenses, the difficulty
of the voyage or the weather encountered. These are the
variables common to all vessels.
6 Additional revenue paid to the ship owner on its voyage charters
for delays experienced in loading and/or unloading cargo that are
not deemed to be the responsibility of the ship owner, calculated in
accordance with specific charter terms
WHAT NOT TO POOL
Where a ship has characteristics in its performance which
reduce or improve the net revenue of a voyage, these should
be identified and penalized or rewarded (to match, reduce
Special Report 9
or improve, in the same order) accordingly. A system of pool
points typically does this by creating a model for a ship with
a performance equating to the average of those being pooled.
This ship is awarded 100 pool points. All other ships are then
given more or less pool points adjusted for the characteristics
of each vessel. These characteristics are usually based on the
description of the ships as warranted by the owner.
Pool points, by their nature, can only be used to address the
differences between the ships as described, and not the ship
as performed, which is only known retroactively after the
performance, trade or market condition has been observed.
This is why, in order to avoid any inequity, it is necessary for
every pool to have an adjustment or correction process to
retroactively amend the pool points during the year. As the
voyage expenses are pooled, the bunkers consumed are paid
for by all the pool members. Also, the cost of an idle7 vessel or a
vessel that has failed a fixture is being paid for by the pool. The
pool manager must be vigilant and always try to demonstrate
that these issues are followed and corrected.
7 When a vessel is not in use, e.g. while waiting for the next fixture, it is idle.
Differences as a result of vetting status or higher than warranted
bunker consumptions should not be pooled to the extent that
these differences reflect the vessel’s non-capability or the lack
of competency of the crew or ship manager. This is typically
adjusted year by year using the performance clauses usually
found in a time charter and which are normally incorporated in
a pool agreement.
WHAT TYPE OF POOL MANAGER
A pool should be a spot tonnage operator only allowing short-
term time charter out on a limited basis to cover short term
commercial storage. Participants in the pool should always be
free to withdraw their ships from the pool to fix their ships out
on long-term time charter out contracts. The pool should not
charter ships in as each participant can charter in and then
place them in the pool. There is no material advantage in the
pool chartering in or out for mid to long time charter contracts,
as the pool has no added value in such negotiation. It would
only disrupt the focus on spot and the Time Charter Equivalent
Earnings (‘TCEE’). A pool only has added value in negotiating
on the spot market because of its knowledge of the true
availability of ships and cargoes. TCEE is the key parameter
for measuring performance and the TCEE of a properly aligned
pool should be focused on extracting the maximum value in
the market balance of any negotiation. Whilst it is desirable to
outperform the TCEE of what other owners, other pools and
indices obtain, this does not determine success although it
is important if the pool is to attract new members. It is also
important to express the TCEE net of all possible commissions,
because this is the money the ship owner is really earning.
10 Special Report
HOW SHOULD THE POOL BE
INCENTIVIZED?
The pool should always be run as a cost center and must have a
remuneration structure that is totally aligned with the interests
of the ship owner participating in the pool to avoid any conflict
of interest caused by being just another layer of brokerage.
The pool manager should be independent but ideally the
ownership of the pool should be held by its participants (the
participating ship owners). All the services should be provided
by employees of the pool. A daily fee should be charged set
within a fixed budget, which will be sufficient to run the office,
remunerate its employees and at the year end, where merited
on a clear set of objectives, pay a bonus.
GOVERNANCE AND CONTROL
The choice of pool is very important. Pooling allows a third
party to market ships and to handle large receipts and
payments on behalf of its participants. Of course a pool will
provide accounts and have them audited but there is no
standard model or system of corporate governance. So how
can an owner know whether the pool manager will act in the
owner’s best interest or in the pool manager’s best interest?
The first warning bell is commission. As explained above,
there is a constant pressure downwards on rates caused by
the remuneration of ship brokers by commission calculated
on gross freight. Commission is only earned for fixing a ship.
The lowest bid fixes the cargo and so the broker tries to find
the cheapest ship. Market intermediaries therefore have no
alignment with the ship owners. So paying a pool manager
on the same basis is to double the trouble. Some charge a
fixed fee as well as a commission on gross freight. There is
no justification for this and the manager enriches himself,
without taking any downside risk, or providing any additional
benefits to the ship owner.
The pool should be owned or at least managed by the
participants who place their ships in the pool. The employees
of the pool manager should be accountable to them. This
needs auditing through pool meetings and full access to
reconciliation of the pool contributions, allocations and
distributions.
When the pool is run for the profit of the managers, the pool
automatically has a conflict of interest and many decisions
that will benefit the pool manager are likely to negatively
impact the ship owners.
For example, one shipping area that most people are unlikely
to pick up is the delivery of a vessel into the pool in a very
disadvantageous position following a very lucrative voyage.
‘Discharge port to discharge port’ accounting will not reveal
this because the long laden passage fell outside the entry of
the vessel into the pool, but the poor performing subsequent
voyage, due to the long compensating ballast passage, will sit
in the pool accounts and be subsidized by the existing pool
members in improved allocation over contribution for the
voyage paid to the new pool member. In an owners-controlled
pool like the Tankers International Pool (TI Pool) this can be
prevented, but many other pools are known to have allowed
this, to attract new members. New members mean additional
voyages and in turn additional commissions for the pool
manager.
THE FUTURE
As Information Technology (IT) plays a larger and larger role,
news and information flow more quickly. The challenge is to
have a position in shipping that can benefit from the information
by using it, not only through analyzing it properly but also by
having a definitive action to take, that gives the information real
value: choosing to fix or not fix a ship. As explained above being
in a pool means more ships, more voyages, better experience
and constant opportunity to express experience, knowledge and
information in a meaningful way. It therefore justifies (i) data
gathering and, (ii) continuous investment in IT, for example, the
TI Pool database has voyage data on 60,000 voyages going back
to the late 1990s.
The TI Pool also developed a mobile app ‘VLCC Fixtures’,
publicly available in the App Store and Google Play and free of
charge. Why? Because the cheapest ship sets the market and,
it seemed to TI, many owners were not up to date or not being
kept reliably informed by their brokers. Things are moving fast
in communications and the investment needed to stay abreast
is costly and can only be afforded if it can be implemented to
effect improvement of earnings on a daily basis.
COMMERCIAL CONSOLIDATION
There are benefits to the charterers and the wider community.
Generally the pooling of vessels will discourage ship owners
to speed up and will as a consequence reduce consumption of
bunkers and reduce production of CO2. Customers find that if
a ship is delayed and failing to meet a cargo pickup window,
another ship may be substituted. Pools may even be able to
enter into a multiple voyage commitment known as a Contract
of Affreightment. However, all of this can only be done if many
ships are controlled by one entity.
Experienced ship owners can see that the VLCC market is
increasingly dominated by National Oil Companies (NOCs)
rather than the Independent Oil Companies (IOCs) and the
movement of cargo is driven not by market arbitrage or
opportunity, although this may play its part, but by national
requirements. There is always another cargo and so the long
game is well suited to this increasingly industrialized sector as
a whole. This may well lead to the conclusion that companies
should consolidate through merger and acquisition. However,
such processes may prove difficult in a capital intensive
industry with strong individual companies forged historically
from family firms. Pooling offers a low risk solution for this,
which can really impact the return to capital and which can
bring the market more into line to attract the capital needed
to keep the world tanker fleet sailing.
Pooling provides a stable robust platform for owners to deal
effectively with both today’s and tomorrow’s tanker markets.
It provides an opportunity for owners to act together positively
and redress the terms of trade balance in the tanker sector
in a clear and transparent way in the long-term interest of all
stakeholders.
A most common criticism is that pools never last long! Euronav
is proud to be a founding member of the Tankers International
Pool, which started in January 2000. Its cornerstones:
transparency, accuracy, collegiality, information sharing and
good governance!
“
MANY TIMES MERGERS FAIL THROUGH DIFFERENCE IN LOCATION,
NATIONALITY, SHIP TYPE OR AGE, LEVERAGE AND MANAGEMENT.
HOWEVER, POOLING OFFERS A LOW RISK SOLUTION FOR THIS,
WHICH REALLY IMPACTS THE RETURN TO CAPITAL AND WHICH
CAN BRING THE MARKET MORE INTO LINE TO ATTRACT THE
CAPITAL NEEDED TO KEEP THE WORLD TANKER FLEET SAILING.
“
Special Report 11
VISION AND MISSION
VISION
T o continue to be recognized globally as a leader in the
shipping and storage of crude oil. We are and intend to
remain dedicated to safety, quality, health and environmental
protection. We intend to pursue excellence through innovation,
know-how and continuous improvement.
MISSION
For our society
To transport an essential source of energy in a manner that is eco-
nomically, socially and environmentally viable now and in the future.
For our clients
To operate in a manner that contributes to the success of their
business by setting increasingly higher standards of quality and
reliability.
For our shareholders
To create significant and lasting value by strategically planning
financial and investment decisions while operating in a manner
consistent with the highest professional standards.
For our employees
To inspire and enable talented, hard-working people to achieve their
career goals in a healthy, challenging and rewarding environment.
12 Vision and mission
Vision and mission 13
COMPANY PROFILE
Euronav is a market leader in the transportation
and storage of crude oil and petroleum
products. As the world’s largest, independent
quoted crude
tanker platform, on 24 March
2016, Euronav owns and manages a fleet of 55
vessels*. The Company, incorporated in Belgium, is
headquartered in Antwerp. Euronav employs over
2,800 people worldwide onshore and offshore and
has offices throughout Europe and Asia. Euronav is
listed on Euronext Brussels and on the NYSE under
the symbol EURN.
The need to operate a safe and reliable fleet has
never been more crucial and it is the most important
strategic objective for the Company. Euronav aims to
be an efficient organization and to deliver the highest
quality and best possible service to its customers.
“
AS THE WORLD’S LARGEST, INDEPENDENT,
QUOTED CRUDE TANKER PLATFORM, EURONAV
OWNS AND MANAGES A FLEET OF 55 VESSELS.
“
Euronav has a long-term strategy through cycle
profitability by managing a balanced portfolio on the
spot and the period tanker market as well as on the
long-term FSO market thus mixing its sources of
revenue between fixed and floating income.
Sustainability is a core value at Euronav and ensures
the long-term health and success of our people,
our business and the environment we work in. It
involves a commitment to safety and environmental
practices, as well as an innovative approach to the
use of technology and information.
Employing European officers on board a modern
fleet, Euronav aims to operate in the top end of the
market. The skills of its directly employed seagoing
officers and shore-based captains and engineers
give a competitive edge in maintenance as well as in
operations and delivery of offshore projects.
* Including TBN Anne which is expected to be delivered in
May 2016
14 Company profile
Company profile 15
DIRECTORS’ REPORT: HIGHLIGHTS 2015
OVERVIEW OF THE MARKET
OIL DEMAND, PRODUCTION
AND BUNKER COSTS
G lobal economic growth of 2.5% for 2015 was slightly below
the long run norm (3%) reflecting a mixed background with
improving traction within Europe (1.5% GDP growth) supported
by maintained U.S. economic expansion (2.4%) and selected emerging
market growth (India 7.5%) being offset by specific issues curtailing
commercial development in Japan (0.6%), Brazil (-3.7%) and Russia
(-3.7%).
Demand for oil has however been typically robust – there have only
been two negative years of demand growth for oil since 1990. During
2015 the International Energy Agency (IEA) upgraded its initial
forecast of demand from 0.9m bpd to an eventual outturn of 1.8m
bpd with demand primarily stimulated by the substantially lower oil
price. Whilst GDP growth globally was modest at 2.5%, the four core
consumption markets of India, China, Europe and the U.S. all delivered
sustained improvement through the year. Chinese oil demand growth,
underpinned by the buildout of its SPR (Strategic Petroleum Reserve)
and reform of its smaller refinery spectrum (so-called ‘teapots’) drove
oil imports 9.3% higher during 2015.
The supply of crude oil continued to be very high with three key supply
factors helping to drive a further fall in the price of crude oil. Firstly,
supply disruptions due to potential geo-political situations failed to
materialize. Secondly, output from OPEC (Saudi Arabia, Kuwait and
Iraq) and non-OPEC (Russia, U.S.) hit record production as a number
of key market participants pursued strategies of market share. Thirdly,
the return of Iranian output to world markets post the agreement on
sanctions further adds to the supply of crude.
Crude oil prices followed a decreasing trend through the majority of
2015 to reach an average for the full year of USD 55.96 per barrel for
the Brent Crude (2014: USD 98.97) and USD 51.33 for the WTI Crude
(2014: USD 93.22).
Bunker fuel is a key operating cost for tanker owners. Bunker prices
declined marginally more than the underlying crude oil price during
calendar year 2015 with a fall of around 40% over the year in average
bunker prices compared to a 37% fall in the value of crude oil. Prices
for the full year were on average estimated at USD 294 in Fujairah,
USD 265 in Rotterdam and USD 289 per metric ton in Singapore. The
acceleration in the price fall of crude oil (and consequently bunkers)
towards the end of 2015 does not immediately have an impact in
reducing voyage related expenses. This impact is deferred as bunkers
purchased at the higher price will remain on board ships.
16 Overview of the Market
World Oil Production
in million bpd (Source - IEA)
100
95
90
85
80
75
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
World Oil Demand
in million bpd (Source - IEA)
100
95
90
85
80
75
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
World VLCC Cargo Evolution
■ 2012 ■ 2013 ■ 2014 ■ 2015
Cargoes per month (Source - TI VLCC Database)
220
200
180
160
140
120
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Overview of the Market 17
TANKER MARKET
The average Time Charter Equivalent (TCE) obtained by the
Company’s owned VLCC fleet in the Tankers International (TI)
Pool was about USD 55,055 per day for 2015 (in 2014: USD
27,625 per day).
The earnings of Euronav’s VLCC time charter fleet was
approximately USD 41,981 per day for 2015 (2014: USD 31,086
per day).
The average daily Time Charter Equivalent obtained by the
Suezmax spot fleet traded by Euronav directly, was approximately
USD 41,686 per day in 2015 (2014: USD 23,382 per day).
The earnings of Euronav’s Suezmax time charter fleet was
approximately USD 35,790 per day for 2015 (2014: USD 25,930
per day).
FLEET GROWTH
The fleet evolution on the VLCC and the Suezmax segment
remained balanced in 2015. The order book growth slowed
since the second quarter with the VLCC order book
representing about 18% of the world fleet and the Suezmax
representing 21%.
The additions of tonnage on the market this year have been
offset by the increase in the demand and supply of crude oil
resulting in an overall balanced fleet and good freight rates
with high volatility.
World Fleet VLCC Earnings (TCE)
■ BDTI (Baltic Exchange Dirty Tanker Index Evolution) VLCC TCE
■ TI Actual in USD
(Source: TI VLCC Database)
100,000
80,000
60,000
40,000
20,000
0
-20,000
2010
2011
2012
2013
2014
2015
BDTI (Baltic Exchange Dirty Tanker Index
Rate Evolution (WS))
■ TD6 - Black sea / Mediterranean
■ TD20 - West Africa / Continental Europe
(Source: Baltic Exhange)
BDTI (Baltic Exchange Dirty Tanker Index
Rate Evolution (WS))
■ TD1 - Arabian Gulf / U.S. Gulf
■ TD3 - Arabian Gulf / Japan
■ TD15 - West Africa / China
(Source: Baltic Exhange)
200
150
125
100
75
50
25
130
110
90
70
50
30
10
2010
2011
2012
2013
2014
2015
2010
2011
2012
2013
2014
2015
18 Overview of the Market
VLCC Fleet Development
■ Additions ■ Forecast Additions
■ Scrapped ■ Removals Scenario
(Source: Clarksons)
Suezmax Fleet Development
■ Additions ■ Forecast Additions
■ Scrapped ■ Removals Scenario
(Source: Clarksons)
60
45
30
15
0
-15
-30
-45
-60
62
54
49
30
24
23
45
45
Q4=19
Q4=25
30
Q3=8
Q2=9
Q3=4
Q2=4
Q4=10
Q3=5
Q2=5
Q1=9
Q1=12
Q1=10
-1
-5
-11
-8
-7
-13
-22
-25
-48
50
40
30
43
45
20
38
27
10
0
-7
-7
-10
-19
-20
10
8
-9
45
Q4=15
27
Q3=4
Q4=12
Q2=10
Q3=10
Q1=16
Q2=4
Q1=1
-3
-6
10
Q4=1
Q3=2
Q2=4
Q1=3
-7
Net:
6
Net:
37
Net:
36
Net:
8
Net:
13
Net:
22
Net:
40
Net:
37
Net:
23
-20
-30
Net:
19
Net:
36
Net:
25
Net:
20
Net:
-1
Net:
10
Net:
24
Net:
39
Net:
3
2010 2011 2012 2013 2014 2015 2016 2017 2018
2010 2011 2012 2013 2014 2015 2016 2017 2018
Overview of the Market 19
FLOATING STORAGE AND OFFLOADING AND FLOATING STORAGE PRODUCTION
AND OFFLOADING (FSO/FPSO) MARKET
Last year 17 contracts for floating production systems, with
an aggregate capital cost estimated to be in excess of USD 7
billion, were awarded and 23 floating production units were
delivered. Over half of the amount of USD 7 billion comes
from three units estimated to cost USD 1 billion or more:
one FPSO (Floating Storage Production and Offloading), one
FLNG (Floating Liquified Natural Gas) unit and one Semi-
submersible.
hulls for conversion to an FSO. The number of FSO projects
has increased over the past five years.
As of 1 January 2016 there are 277 floating production systems
in service or available worldwide of which 165 FPSOs and 96
FSOs. This does not include 22 production units, three FSOs
and one MOPU that are currently off field and available for
reuse.
By type, FPSOs and FLNGs each account for about one quarter
of the capital expenditure, Semis 17%, FSRUs (Floating
Storage Regasification Unit) 13%, Oil FSOs (Oil Floating
Storage and Offloading) and LNG FSOs 7% each and MOPUs
(Mobile Offshore Production Unit) 2%. The total number of
contracts awarded in 2015 was down 55% from last year and
only one more than the 2009 low.
Southeast Asia was by far the most active region by number of
awards with two FPSOs, two MOPUs and one FSO followed by
West Africa, Northern Europe and the Middle East with three
awards each.
In total 63 production floaters, nine FSOs and seven MOPUs
are currently on order. Furthermore, 36 units utilizing
purpose-built hulls and 27 units based on converted hulls are
in the backlog with Brazil to continue to dominate orders for
production floaters.
Currently, there are 241 projects in the bidding, design or
planning stage that may require a floating production or
storage system. Of these projects, 64 are in the bidding or
final design stage and another 127 floater projects are in the
planning phase. The remaining 50 projects are in the appraisal
stage with awards possible beyond 2022.
Four oil FSOs were ordered (two conversions, one modification
and a new unit to be built in Singapore) in 2015 and only
four FPSOs (which is the lowest amount recorded in over 20
years). Over the past five years 35 FSOs have been placed with
an average of seven annually. Around 20% of these orders
involved purpose-built FSOs with 80% utilizing existing tanker
Over the next five years there are 25 to 35 FSO orders and 30
to 66 FPSO orders expected. Of the future FSO orders 75%
will utilize converted oil tankers whilst the remainder will be
based on new build hulls. Of future FPSO requirements, 20%
will be the modification and redeployment of existing FPSOs.
New build hulls will account for 35% of all FPSO orders.
Projects in Planning,
Appraisal and Final
Design Phase by Region
■ Appraisal
■ Planning
■ Bidding/Final design
(Source: Energy Maritime
Associates Pte Ltd)
50
45
40
35
30
25
20
15
10
5
0
16
17
23
16
12
9
a
c
i
r
f
A
7
7
21
18
13
13
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i
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a
r
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11
19
20
12
8
7
a
i
s
A
t
s
a
e
h
t
u
o
S
8
15
12
7
4
o
c
i
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e
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5
4
18
18
3
2
e
p
o
r
u
E
n
r
e
h
t
r
o
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20 Overview of the Market
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T
EURONAV FLEET
OVERVIEW OF THE YEAR 2015
On 24 March 2016 Euronav’s owned and operated fleet consists
of 54 double hulled vessels being one V-Plus vessel, two FSO
vessels (both owned in 50%-50% joint venture), 29 VLCCs (of
which one in joint venture) and 22 Suezmaxes (of which four in
joint venture).
At the time of preparing this report on 24 March 2016,
Euronav’s tonnage profile is as follows:
VLCC and V-Plus owned
VLCC chartered in
FSO owned
Suezmax owned
Suezmax chartered in
8,941,088.50 dwt
305,749.00 dwt
442,000.00 dwt
2,960,654.50 dwt
158,574.00 dwt
TOTAL OWNED AND CONTROLLED
TONNAGE
12,808,066.00 DWT
After taking delivery of the Anne which is currently scheduled
to take place in the second quarter of 2016, Euronav will own
and operate 55 double hull tankers (including FSO vessels)
with an aggregate carrying capacity of approximately 13.11
million dwt. On 24 March 2016 the weighted average age of
the Company’s trading fleet was approximately 7.7 years.
The majority of Euronav’s VLCC fleet is operated in the Tankers
International Pool (TI Pool) in the voyage freight market. The
TI Pool is one of the largest modern exclusively double hulled
fleets worldwide and comprises on 24 March 2016 38 vessels
of which 20 vessels operated by Euronav. The average age of
Euronav’s owned VLCC fleet on 24 March 2016 is 6.55 years.
In addition, the TI Pool forms a commercial joint venture with
Frontline since 6 October 2014. This combination is the largest
provider of spot VLCC tonnage in the world and is operating
under the name VLCC Chartering Ltd.
Part of Euronav’s Suezmax fleet
is chartered out on
long-term contracts. The other part of the Suezmax fleet is
operated on the spot market by Euronav’s spot desk directly.
On 24 March 2016 the average age of the Suezmax fleet is
ten years.
Both of Euronav’s FSO vessels are chartered out and
committed until 2017.
Euronav has in-house ship management which positions its
fleet at the top of the market for tanker assets and services.
The benefits that are derived from in-house management lie
in asset maintenance, enhanced customer service and risk
management. Charterers are more than ever seeking to do
business exclusively with superior quality operators whether
through fixed rate long-term business or in the spot market.
The first quarter
For the first quarter of 2015, the Company had a net result
of USD 80.9 million or USD 0.55 per share (first quarter
2014: USD 1.4 million and USD 0.02 per share). EBITDA for
the same period was USD 131.3 million (first quarter 2014:
46.5 million). The average daily Time Charter Equivalent rates
(TCE) obtained by the Company’s fleet in the TI Pool was
approximately USD 50,845 (first quarter 2014: USD 34,777).
The TCE of the Euronav Suezmax fleet fixed on long-term time
charters, including profit shares when applicable, was USD
41,593 per day (first quarter 2014: USD 27,350 per day) and
the average daily TCE obtained by the Suezmax spot fleet was
approximately USD 41,944 (first quarter 2014: USD 26,800).
January
Euronav
On 15 January 2015 Euronav delivered the VLCC Antarctica
(2009 – 315,981 dwt) to its new owners for conversion into
an FPSO. Delivery was earlier than expected, resulting in an
increased sale price and a corresponding gain on disposal
of assets of USD 2.1 million which was recorded in the first
quarter of 2015.
(from the
On 20 January 2015 Euronav announced the commencement
of its underwritten Inital Public Offering in the United States
of 13,550,000 ordinary shares. On 23 January 2015 Euronav
announced the upsizing
initially announced
13,550,000 shares to 16,260,000 shares) of its Initial Public
Offering in the United States as well as pricing of the offering at
an issue price per share of USD 12.25. As of that date, Euronav’s
shares offered in the United States commenced trading on the
New York Stock Exchange (the “NYSE”) under the ticker symbol
“EURN”. On the same date Euronav launched its U.S. Exchange
Offer which enabled shareholders to reposition their shares
that were listed and tradeable on Euronext Brussels into shares
listed and tradeable on the NYSE.
On 28 January 2015 Euronav announced the closing of its Inital
Public Offering of 18,699,000 shares at a public offering price
of USD 12.25 per share for gross proceeds of USD 229,062,750.
This includes the exercise in full by the underwriters of their
overallotment option of 2,439,000 shares.
On 31 January 2015 the 250 remaining outstanding fixed-rate
senior unsecured convertible notes due 2015, with a face value
of USD 100,000 each, were fully redeemed at par. Euronav held
18 of these notes. Currently, there are no convertible notes
outstanding.
Overview of the Market 21
In the market
VLCC
• The highest* daily rated reported fixture was recorded by
Front Falcon (2002-VLCC) chartered out to Trafigura for six
months at USD 55,000 per day.
• The lowest daily rated reported fixture was recorded by
Maran Centaurus (1995-VLCC) chartered out to Vitol for ten
months at USD 33,500 per day.
• The longest reported fixture was recorded by Elisabeth I
A (2004-VLCC) chartered out to BG for 24 months option
12 months at USD 42,500 per day for the initial period and
USD 45,000 per day for the optional period.
• In total close to 30 confirmed VLCC fixtures were reported
on TC in the month of January.
Suezmax
• The highest* daily rated reported fixture was recorded by
Valtamed (2004-Suezmax) chartered out to Litasco for 12
months at USD 31,750 per day.
• The lowest daily rated reported fixture was recorded by
Evridiki (2007-Suezmax) chartered out to Trafigura for 24
months option 12 months at USD 26,000 per day for the
initial period and USD 30,000 per day for the optional year.
This fixture was also the longest reported.
• In total about eight confirmed Suezmax fixtures were
reported fixed on TC in the month of January.
February
Euronav
On 6 February 2015 Euronav’s share capital was increased
following the mandatory contribution in kind of 30 outstanding
perpetual convertible preferred equity instruments issued on
13 January 2014 which resulted in the issuance of 9,459,283
new ordinary shares. Currently, there are no perpetual
convertible preferred equity instruments outstanding.
On 19 February 2015 and following the closing of its Inital
Public Offering on the NYSE, Euronav repaid the USD 235.5
million note issued to partly finance the acquisition of 15
VLCCs as announced on 5 January 2014. As the note was
issued below par, in accordance with IFRS, the Company
amortized USD 20.4 million (non-cash) in the fourth quarter of
2014, bringing the amortization related to this note for the full
year 2014 to USD 31.9 million (non-cash) and a further USD
4.1 million (non-cash) in the first quarter of 2015.
On 26 February 2015 Euronav took delivery of the VLCC Hirado
(2011 – 302,550 dwt) which was the third vessel delivered as
part of the acquisition of four modern Japanese-built VLCC
vessels announced on 8 July 2014.
In the market
VLCC
• The highest* daily rated reported fixture was recorded by Pu
Tuo San (2011-VLCC) chartered out to Total for six months at
USD 55,000 per day.
22 Overview of the Market
• The lowest daily rated reported fixture was recorded by Sea
Equatorial (1997-VLCC) chartered out to ST Shipping for six
months at USD 33,300 per day.
• The longest reported fixtures were recorded by Shinyo
Kannika (2001-VLCC) chartered out to BP for 12 months at
USD 40,000 per day and Shinyo Kieran (2011-VLCC) chartered
out to Shell for 12 months at USD 42,000 per day.
• In total about 17 confirmed VLCC fixtures were reported on
TC in the month of February.
Suezmax
• The highest* daily rated reported fixture was recorded by
Center (2011-Suezmax) chartered out to Litasco for 12
months at USD 32,000 per day.
• The lowest daily rated reported fixture was recorded by Roxen
Star (2009-Suezmax) chartered out to Vitol for 12 months at
USD 28,500 per day.
• The longest fixture reported was Amoureux (2008-Suezmax)
chartered out to Stena for 24 months at USD 29,000 per day.
• In total about ten confirmed Suezmax fixtures were reported
on TC in the month of February.
March
Euronav
On 23 March 2015 Euronav closed its U.S. Exchange Offer
which enabled shareholders to reposition their shares that
were listed and tradeable on Euronext Brussels into shares
listed and tradeable on the NYSE.
On 30 March 2015 Euronav announced that a total of 42,919,647
shares that were listed and tradeable on Euronext Brussels
were repositioned pursuant to the U.S. Exchange Offer into an
equal number of shares listed and tradeable on the NYSE.
In the market
VLCC
• New Vista (2011-VLCC) chartered out to Tesoro for 24 months
at USD 39,000 per day.
• Plata Glory (1999-VLCC) chartered out to Unipec for six
months at USD 37,750 per day for the initial and optional
period.
• Nave Galactic (2009-VLCC) chartered out to Shell for 12
months at USD 30,000 per day with profit share
Suezmax
• The highest* daily rated reported fixture was recorded by
DHT Target (2001-Suezmax) chartered out to Shell for 12
months at USD 30,500 per day.
• The lowest daily rated reported fixture was recorded by SKS
Spey (2007-Suezmax) chartered out to Shell for 12 months at
USD 26,000 per day.
• The longest fixture reported was Ephesos (2012-Suezmax)
chartered out to Total for 24 months at USD 30,000 per day.
• In total about eight confirmed Suezmax fixtures were
reported on TC in the month of March.
The second quarter
The Company had a net half year result of USD 173.3 million
(first semester 2014: USD -21.3 million) or USD 1.13 per
share (first semester 2014: USD -0.2) for the first semester
2015. EBITDA for the same period was USD 273.7 million (first
semester 2014: USD 68.6 million). For the second quarter of
2015 the average daily TCE obtained by the Company’s fleet
in the TI Pool was approximately USD 55,570 (second quarter
2014: USD 21,464). The TCE of the Euronav Suezmax fleet
fixed on long-term time charters, including profit shares
when applicable, was USD 35,258 per day (second quarter
2014: USD 19,797 per day) and the average daily TCE obtained
by the Suezmax spot fleet was approximately USD 41,886
(second quarter 2014: USD 18,445).
April
Euronav
On 1 April 2015 Euronav announced the adoption of a new
return to shareholders policy for the group to distribute 80%
of its annual net result, excluding exceptional items such as
capital gains made on vessel disposals.
On 9 April 2015 Euronav took delivery of the VLCC Hakata (2010
– 302,550 dwt) which was the last vessel delivered as part of
the acquisition of four modern Japanese-built VLCC vessels
announced on 8 July 2014.
On 27 April 2015 the temporary difference between Euronav’s
ordinary shares tradeable on the NYSE and its ordinary shares
tradeable on Euronext Brussels expired. Since this date all
ordinary shares have the same rights and privileges in all
respects. As of 28 April 2015 all Euronav shares are fully fungible
and are able to trade on both NYSE and Euronext Brussels.
Total daily volume is therefore the aggregate of volumes on both
exchanges.
In the market
Suezmax
• The highest* daily rated reported fixture was recorded
by United Kalavryta (2005-Suezmax) chartered out to
Rosnefteflot for eight months at USD 37,000 per day.
• The lowest daily rated reported fixture was recorded by
SKS Saluda (2003-Suezmax) chartered out to Shell for 12
months at USD 27,000 per day.
• The longest reported fixture was Orpheas (2007-Suezmax)
chartered out to Stena for 24 months at USD 29,000 per day.
• In total about eight confirmed Suezmax fixtures were
reported on TC in the month of April.
May
Euronav
On 13 May 2015 the General Meeting of Shareholders approved
the gross dividend of USD 0.25 per share as proposed by
the Board of Directors. This dividend was paid from profits
carried forward over financial year 2014 and on this occasion
considered part of the dividend policy for 2015.
*anything equal to or above six months TC
Overview of the Market 23
In the market
VLCC
• Cosgrand Lake (2005-VLCC) chartered out to Unipec for 12
months at USD 45,000 per day.
• Gloric (2006-VLCC) chartered out to BP for 18 months at
USD 43,500 per day.
• DS Vector (2001-VLCC) chartered out to Shell for 12 months
at USD 43,500 per day.
Suezmax
• The highest* daily rated reported fixture was recorded by
SKS Satilla (2006-Suezmax) chartered out to BP for 24
months at USD 31,750 per day.
• The lowest daily rated reported fixture was recorded by
Front Brabant (1998-Suezmax) chartered out to India
Steamship (ISS) for 12 months at USD 29,500 per day.
• The longest reported fixture besides SKS Satilla was
Nobleway (2010-Suezmax) chartered out to Litasco for 24
months at USD 30,750 per day.
• In total about eight confirmed Suezmax fixtures were
reported on TC in the month of May.
June
Euronav
On 16 June 2015 Euronav announced the acquisition through
resale of newbuilding contracts of four VLCCs - at the time of
acquisition under construction at Hyundai Heavy Industries -
for an aggregate purchase price of USD 384 million or USD
96 million per vessel. In addition and against the payment of
an option fee of an aggregate amount of USD 8 million, the
seller also agreed to grant Euronav an option to acquire up to
an additional four VLCCs which are sister vessels to the initial
four VLCCs, at a purchase price of USD 98 million each.
In the market
VLCC
• Astro Chorus (2001-VLCC) chartered out to Shell for 15
months at USD 40,000 per day.
• New Vigorus (2012-VLCC) chartered out to Unipec for 12
months at USD 45,000 per day.
• In total two confirmed VLCC fixtures were reported on TC
in the month of June.
24 Overview of the Market
Suezmax
• In total about six confirmed Suezmax fixtures were
reported on TC in the month of June but for periods below
three months.
The third quarter
For the third quarter 2015, the Company had a net profit of
USD 72.2 million (third quarter 2014: USD -20.6 million) or USD
0.46 (third quarter 2014: USD -0.16) per share. EBITDA for the
same period was USD 127.9 million (third quarter 2014: USD
36.3 million). The TCE obtained by the Company’s VLCC fleet
in the TI Pool was approximately USD 52,368 per day (third
quarter 2014: USD 24,661 per day). The TCE of the Suezmax
fleet fixed on long-term time charters, including profit shares
when applicable, was USD 30,944 per day (third quarter 2014:
USD 21,168 per day) and the average daily TCE obtained by
the Suezmax spot fleet was approximately USD 40,048 (third
quarter 2014: USD 21,737).
July
In the market
VLCC
• Kondor (2011-VLCC) chartered out to Koch for 24 months
at USD 42,000 per day.
• Baltic Glory (2005-VLCC) chartered out to Shell for 24
months at USD 30,000 per day.
• Baltic Sunrise (2005-VLCC) chartered out to Shell for 24
months at USD 30,000 per day.
• Apollonia (2003-VLCC) chartered out to Petrobras for 36
months at USD 40,300 per day.
Suezmax
• Maran Poseidon (2010-Suezmax) chartered out to BG for
24 months at USD 32,000 per day.
• Astro Perseus (2004-Suezmax) chartered out to BG for 24
months at USD 32,000 per day.
• In total six confirmed Suezmax fixtures were reported on
TC in the month of July but for periods below three months.
August
Euronav
On 19 August 2015 Euronav signed a new USD 750 million senior
secured amortizing revolving credit facility for the purpose of
(i) refinancing 21 vessels; and (ii) financing four newbuilding
VLCCs vessels as well as (iii) Euronav’s general corporate and
working capital purposes. The facility was used to refinance
two existing facilities: the USD 750 million loan agreement
dated 22 June 2011 and the USD 65 million facility signed on 23
December 2011.
In the market
VLCC
• Taga (2004-VLCC) chartered out to Unipec for 12 months at
USD 45,000 per day.
• Formosapetro Challenger (2001-VLCC) chartered out to
CPC for ten months at USD 43,500 per day.
• Desh Ujaala (2005-VLCC) chartered out to IOC for 24
months at USD 41,000 per day.
• Desh Viraat (2008-VLCC) chartered out to IOC for 24 months
at USD 41,650 per day.
• Nave Neutrino (2003-VLCC) chartered out to Shell for 24
months at USD 40,500 per day.
Suezmax
• SKS Sini (2003-Suezmax) chartered out to Shell for 24
months at USD 28,000 per day.
• Euro (2012-Suezmax) chartered out to Chevron for 30
months at USD 35,000 per day.
September
Euronav
During its meeting of 18 August 2015, the Board of Directors of
Euronav approved an interim dividend for the first semester of
USD 0.62. Together with the USD 0.25 dividend paid in May, this
brings the total dividend paid in 2015 to USD 0.87. The interim
dividend of USD 0.62 was paid as from 22 September 2015.
On 25 September 2015 Euronav took delivery of the first vessel
of four VLCCs which were recently acquired as resales of
existing newbuilding contracts announced on 16 June 2015:
the Antigone (2015 – 299,421 dwt).
In the market
VLCC
• The highest* daily rated reported fixture was recorded by
Xin Han Yang (2009-VLCC) chartered out to Unipec for 12
months at USD 47,500 per day.
• The lowest daily rated reported fixture was recorded by
Iwatesan (2003-VLCC) chartered out to Reliance for five
years at USD 33,500 per day. This fixture was also the
longest reported fixture.
• In total about ten confirmed VLCC fixtures were reported
on TC in September.
Suezmax
• Delta Eurydice (2015-Suezmax) chartered out to Trafigura
for six months at USD 32,000 per day.
• Amore Mio II (2001-Suezmax) chartered out to Shell for
seven months at USD 33,750 per day.
• In total two confirmed Suezmax fixtures were reported on
*anything equal to or above six months TC
TC in the month of August.
Overview of the Market 25
The fourth quarter
For the fourth quarter of 2015, the Company had a net profit
of USD 104.9 million (fourth quarter 2014: USD -3.9 million)
or USD 0.66 per share (fourth quarter 2014: USD -0.03 per
share). EBITDA was USD 160.6 million (fourth quarter 2014:
USD 67.6 million). For the full year ending 31 December
2015, the net results are USD 350.3 million (2014: USD -45.8
million) or USD 2.25 per share (2014: USD -0.39 per share).
The TCE obtained by the Company’s fleet in the TI Pool was
for the fourth quarter approximately USD 61,482 per day
(fourth quarter 2014: USD 31,650 per day). The earnings of
the Euronav Suezmax fleet fixed on long-term time charters,
including profit shares when applicable, were USD 36,042 per
day for the fourth quarter (fourth quarter 2014: USD 30,513
per day). The TCE obtained by the Suezmax spot fleet was
approximately USD 41,596 per day for the fourth quarter
(fourth quarter 2014: USD 24,248 per day).
Time Charter Equivalent for the full year:
In USD
VLCC spot
2015
2014
55,055 per day
27,625 per day
Suezmax time charter
35,790 per day
25,930 per day
Suezmax spot
41,686 per day
23,382 per day
October
Euronav
As announced in June when reporting the acquisition of
four VLCCs, the Company was granted an option to acquire
a further four VLCCs with delivery windows late 2016
and 2017. After careful consideration, the Board decided
not to exercise the option to purchase four VLCCs. As a
consequence, the value of these options was written off to
zero and a USD 8 million non-recurring charge (non-cash)
was taken for the third quarter.
Euronav was awarded Company of the Year by Lloyd’s List
as the Company delivered on a number of strategic goals to
become the world’s largest, independent quoted crude tanker
platform.
In the market
VLCC
• The highest* daily rated reported fixture was recorded
by Spyros (2007-VLCC) chartered out to Clearlake for 24
months at USD 48,700 per day.
• The lowest and longest daily rated reported fixture was
recorded by New Resource (2010-VLCC) chartered out to
CPC for three years at USD 33,500 per day.
• In total about 14 confirmed VLCC fixtures were reported on
TC in the month of October.
Suezmax
• The highest* daily rated reported fixture was recorded by
Mount Fuji (2010-Suezmax) chartered out to PDVSA for 36
months at USD 35,000 per day.
• The lowest daily rated reported fixture was recorded by Jag
Lateef (2000-Suezmax) chartered out to IOC for 24 months
at USD 29,500 per day.
• The longest fixture reported was Alterego II (2002-Suezmax)
chartered out to Geoservice for five years at USD 29,000
per day.
• In total about eight confirmed Suezmax fixtures were
reported on TC in the month of October.
November
Euronav
Euronav sold its Suezmax Cap Laurent (1998 - 146,145 dwt) for
USD 22.25 million. The vessel was wholly owned by Euronav.
The capital gain on that sale of about USD 11.1 million was
recorded in the fourth quarter. The vessel was delivered to its
new owner on 26 November 2015.
In the market
VLCC
• The highest* daily rated reported fixture was recorded by
Shoshone Spirit (2011-VLCC) chartered out to Koch for 12
months at USD 49,500 per day.
• The lowest daily rated reported fixture was recorded by
Sea Lynx (2004-VLCC) chartered out to BG for 36 months
at USD 37,500 per day. This fixture was also the longest TC
deal reported in November.
• In total about seven confirmed VLCC fixtures were reported
on TC in the month of November.
Suezmax
• Silia T (2002-Suezmax) chartered out to Litasco for 18
months at USD 34,000 per day.
• Triathlon (2002-Suezmax) chartered out to Koch for 18
months at USD 34,900 per day.
December
Euronav
Euronav’s Board of Directors unanimously co-opted Mr. Carl
Steen as member of the Board and elected him Chairman,
following the resignation of the following non-independent
Directors: Mr. Peter G. Livanos, Mr. Marc Saverys and Mr.
Julian Metherell, all of which took effect from the close
of the meeting of the Board of Directors of the Company
on 3 December 2015. The new Chairman has a breadth of
experience in finance and shipping as the former head of the
Shipping, Oil Services and International Division of Nordea
Bank, one of the largest lenders to the shipping and offshore
markets.
*anything equal to or above six months TC
26 Overview of the Market
EVENTS OCCURRED AFTER THE END
OF THE FINANCIAL YEAR ENDING 31
DECEMBER 2015
On 15 January 2016 Euronav sold the VLCC Famenne (2001 –
298,412 dwt), one of its two oldest VLCC vessels, for USD 38.4
million. The vessel was wholly owned by Euronav. The capital
gain on that sale of about USD 13.8 million was recorded at
delivery on 9 March 2016.
On 26 January 2016 Euronav announced the buyback of 500,000
of its own shares on Euronext Brussels at an aggregate cost
of EUR 4,762,784.20. Following this transaction, the Company
owned 850,000 own shares (0.53% of the total outstanding
shares).
On 26 January 2016 Euronav took delivery of the second vessel
of four VLCCs which were acquired as resales of existing
newbuilding contracts as announced on 16 June 2015: the
VLCC Alice (2016 - 299,320 dwt).
On 24 March 2016 Euronav took delivery of the third vessel
of four VLCCs which were acquired as resales of existing
newbuilding contracts as announced on 16 June 2015: the
VLCC Alex (2016 - 299,445 dwt).
In addition to his leading role in banking, Mr. Steen has many
years of experience on boards of publicly traded companies.
His standing in the international shipping and investment
communities makes him a real asset to the Company.
These changes are part of a process to further increase the
independence and diversification of the board as the Company
has completed
independent public
company with a highly liquid share and a wide shareholder
base. Since listing on the NYSE in January 2015, Euronav has
been cognisant of the need to refresh the Board in order to
deal with the increasing regulation and complexity that comes
from a dual listing.
its migration to an
In the market
VLCC
• The highest* daily rated reported fixture was recorded by
Samco Europe (2007-VLCC) chartered out to Total for 12
months at USD 53,000 per day.
• The lowest daily rated reported fixture was recorded by
Hyundai Sun (1998-VLCC) chartered out to ST Shipping for
14 months at USD 38,500 per day.
• The longest fixture reported was Maran Taurus (2011-
VLCC) chartered out to Unipec for five years at USD 40,000
per day.
• In total about 12 fixtures were reported on TC in the month
of December.
Suezmax
• The highest* daily rated reported fixture was recorded
by Sikinos (2000-Suezmax) chartered out to Vitol for six
months at USD 50,000 per day.
• The lowest daily rated reported fixture was recorded by
Hyundai Ulsan 2882 (2017-Suezmax) chartered out to Total
for five years at USD 28,750 per day. It is also the longest
fixture recorded for the month of December.
• In total about ten Suezmax fixtures were reported on TC in
the month of December.
Overview of the Market 27
PROSPECTS FOR 2016
Euronav is well positioned to benefit from the solid tanker market
industry fundamentals which are in place. Demand for crude oil
continues to be robust with the IEA (International Energy Agency)
forecasting global demand growth for crude oil of 1.2 million
barrels per day for 2016. Should the price for oil remain low by
historical standards then further stimulation of demand from
these levels can be anticipated.
The tanker fleet order book remains moderate, in the view of
management, with new orders comprising 18% of the VLCC
fleet and 19% of the Suezmax fleet. Whilst the scrapping of
vessels is expected to be extremely modest during a strong
freight rate background, the average 20 year life for a crude
tanker implies a natural level of attrition (5% per annum)
in the global fleet. Two key strategic developments - the
re-introduction of Iran to global crude oil markets and trading
along with the repealing of the ban on U.S. crude oil exports -
should underpin further, if modest, expansion of the ton-miles
crude cargoes that will be transported.
The supply of oil in the short to medium term will continue to be at
elevated levels of production as key participants in the U.S., OPEC
and Russia will continue to focus on market share strategies.
Euronav has no funding requirements going forward all things
being equal and is supported by a proven management team,
strict capital discipline and an established dividend distribution
policy.
28 Overview of the Market
“
EURONAV IS WELL POSITIONED TO BENEFIT
FROM THE SOLID TANKER MARKET INDUSTRY
FUNDAMENTALS. DEMAND FOR CRUDE OIL
CONTINUES TO BE ROBUST, THE TANKER FLEET
ORDER BOOK REMAINS MODERATE AND THE
SUPPLY OF OIL IN THE SHORT TO MEDIUM TERM
WILL CONTINUE TO BE AT ELEVATED LEVELS
OF PRODUCTION.
“
Overview of the Market 29
1. CAPITAL, SHARES AND
SHAREHOLDERS
1.1 Capital and shares
On 31 December 2015 the registered share capital of Euronav
amounted to USD 173,046,122.14 and was represented by
159,208,949 shares without par value.
The shares are in registered or dematerialized form and may be
traded on the new York Stock Exchange or Euronext Brussels,
depending on in which component of the share register the shares
are registered. Shares may be transferred from one component
to the other after completion of a procedure for repositioning.
1.2 Convertible bonds
On 24 September 2009 the Company issued 1,500 subordinated,
fixed-rate, non-guaranteed convertible bonds maturing 31
January 2015 for a total of USD 150 million.
On 1 February 2013 the Company launched an exchange offer on
all outstanding bonds with maturity 31 January 2015 in exchange
for newly issued convertible bonds maturing 31 January 2018. In
aggregate, 1,250 bonds (USD 125 million) were offered meaning
that only 250 bonds, maturing in 2015, remained outstanding,
representing a total amount of USD 25 million.
On 31 January 2015 the 250 remaining outstanding notes
issued in 2009 and due in 2015 with a face value of USD 100,000
each, were fully redeemed at par. Euronav held 18 of these
notes. As of 9 April 2014 all notes due in 2018 were converted
or redeemed. Currently, there are no convertible notes that
remain outstanding.
1.3 Perpetual convertible preferred equity instrument
On 13 January 2014 Euronav issued 60 perpetual convertible
preferred equity instruments for a total issuance amount of
USD 150,000,000. The instruments were issued at par and bore
an interest of 6% during the first five years payable annually
in arrears in cash or in shares at the option of the Company.
The price against which the instruments could be contributed
was EUR 5.776000 (or USD 7.928715 at a EUR/USD exchange
rate of 1.372700) per share. The Company had an option to
force the contribution if (i) the share price reached a certain
level over a certain period of time and (ii) the Company had
completed a listing in New York (NYSE or NASDAQ).
CORPORATE
GOVERNANCE
STATEMENT
INTRODUCTION
Reference Code
Euronav has adopted the Belgian Code on Corporate Governance
(dated 12 March 2009) as its reference code. The code can be
consulted on the website of the Belgian Corporate Governance
Committee: www.corporategovernancecommittee.be.
The full text of the Corporate Governance Charter can be
consulted on the Company’s website www.euronav.com.
New York Stock Exchange Listing
Following the dual listing on the New York Stock Exchange of
the Company’s shares on 23 January 2015, the New York Stock
Exchange Corporate Governance rules for Foreign Private
Issuers are also applicable to the Company. The Company has
also registered and become a reporting company under the
U.S. Securities and Exchange Act of 1934, as amended.
As a result of this listing, the Company is subject to the U.S.
Sarbanes-Oxley Act of 2002 and to certain U.S. Securities laws
and regulations relating to corporate governance applicable to
reporting companies that are foreign private issuers and are
subject to SEC reporting obligations.
30 Corporate Governance Statement
On 6 February 2014 the Company’s share capital was increased
following the voluntary contribution in kind of 30 perpetual
convertible preferred equity instruments which resulted in the
issuance of 9,459,286 new shares.
1.5 Shareholders and shareholders’ structure
On 31 December 2015 taken into account the declarations
and information available to the Company at the time, the
shareholders’ structure was as follows:
On 30 January 2015 Euronav issued a mandatory contribution
notice to exercise its right to request the contribution of the 30
outstanding perpetual convertible preferred equity securities
which on 6 February 2015 resulted in the issuance of 9,459,283
new shares. Currently, there are no perpetual convertible
preferred equity instruments outstanding.
1.4 Treasury shares
On 31 December 2015 Euronav held 466,667 own shares. In
a series of buyback transactions between 15 January 2016
and 25 January 2016 Euronav acquired on Euronext Brussels
500,000 own shares (0.31% of the total outstanding shares),
each having a par value of USD 1.086912, at an aggregate
cost of EUR 4,762,784.20. These buyback transactions were
entered taking into account a variety of factors, including
market conditions, regulatory requirements and other
corporate considerations.
Euronav currently holds 850,000 own shares, each having
a par value of USD 1.086912 (0.53% of the total outstanding
shares).
Besides the stock option plans for members of the Executive
Committee and potentially senior employees (please refer to
section 4.3. Remuneration policy for the Executive Committee
and the employees further in this Corporate Governance
Statement), there are no other share plans, stock options or
other rights to acquire Euronav shares in place.
SHAREHOLDER
Saverco NV1
Victrix NV1
Euronav (treasury shares)
Other
TOTAL
NUMBER OF
SHARES
17,026,896
9,156,893
466,667
132,558,493
159,208,949
PERCENTAGE
10.69%
5.75%
0.29%
83.26%
100.00%
1 Including shares held directly or indirectly by or for the benefit of the
ultimate beneficial owner
Taken into account the series of buyback transactions between
15 January 2016 and 25 January 2016 (please refer to section
1.4. Treasury shares above) and the latest declarations and
information available to the Company, at the time of preparing
this report, the shareholders’ structure was as follows:
SHAREHOLDER
Saverco NV1
Victrix NV1
Euronav (treasury shares)
Other
TOTAL
NUMBER OF
SHARES
17,026,896
9,245,393
850,000
132,086,660
159,208,949
PERCENTAGE
10.69%
5.81%
0.53%
82.97%
100.00%
1 Including shares held directly or indirectly by or for the benefit of the
ultimate beneficial owner
Corporate Governance Statement 31
Shareholders’ structure Euronav NV
on 24 March 2016
10.69% Saverco NV
5.81% Victrix NV
0.53% Euronav NV (treasury shares)
82.97% Other
2. BOARD OF DIRECTORS AND
BOARD COMMITTEES
2.1 Board of Directors
During 2015 the composition of the Board of Directors
was as follows:
NAME
Carl
Steen1
Peter G.
Livanos2,3
Marc
Saverys3
Paddy
Rodgers
Daniel R.
Bradshaw
Ludwig
Criel
Alexandros
Drouliscos
Julian
Metherell3
TYPE OF
MANDATE
FIRST
APPOINTED
AS DIRECTOR
END TERM
OF OFFICE
Chairman –
Independent
Director
2015
To be confirmed
by the AGM in
2016
Chairman
2005
3 December
2015
Vice - Chairman
2003
3 December
2015
Director - CEO
2003
AGM 2016
Director
2004
AGM 2017
Director
2003
AGM 2016
Independent
2013
AGM 2017
Director
Director
2014
3 December
2015
John Michael
Director
2013
AGM 2017
Radziwill
William
Thomson
Independent
2011
AGM 2018
Director
Alice Wingfield
Independent
2012
AGM 2016
Digby
Director
Anne-Hélène
Monsellato4
Ludovic
Saverys5
Independent
2015
AGM 2018
Director
Director
2015
AGM 2018
32 Corporate Governance Statement
1 Mr. Carl Steen was appointed Chairman of the Board of Directors effective
immediately after the Board Meeting of 3 December 2015 in replacement
of Mr. Peter G. Livanos, acting as permanent representative of Ceres
Investments (Cyprus) Limited.
2 The mandate of Tanklog Holdings Limited, permanently represented by
Mr. Peter G. Livanos, expired immediately after the AGM of 13 May 2015.
As of the same date, Ceres Investments (Cyprus) Limited, permanently
represented by Mr. Peter G. Livanos, was appointed Director and
Chairman of the Board of Directors and became a member of the
Remuneration Committee and a member of the Health, Safety, Security
and Environmental Committee as of its appointment.
3 Mr. Peter G. Livanos, as a permanent representative of Ceres Investments
(Cyprus) Limited, Mr. Marc Saverys and Mr. Julian Metherell resigned
from the Board of Directors with effect immediately after the Board
meeting of 3 December 2015.
4 Mrs. Anne-Hélène Monsellato was appointed Independent Director as of
13 May 2015, Chairman of the Audit and Risk Committee and member of the
Corporate Governance and Nomination Committee as of her appointment.
5 Mr. Ludovic Saverys was appointed Director as of 13 May 2015 and became
a member of the Remuneration Committee and of the Health, Safety,
Security and Environmental Committee as of his appointment.
Carl Steen – Independent Director – Chairman
(as of 3 December 2015)
Carl Steen was co-opted as director and appointed Chairman of
the Board of Directors with effect immediately after the Board
meeting of 3 December 2015. He graduated from Eidgenössische
Technische Hochschule (ETH) in Zürich, Switzerland in 1975
with a M.Sc. in Industrial and Management Engineering. After
working as a consultant in a logistical research and consultancy
company, he joined a Norwegian shipping company in 1978 with
primary focus on business development. Five years later, in
1983, he joined Christiania Bank and moved to Luxembourg,
where he was responsible for Germany and later the Corporate
Division. In 1987 Mr. Steen became senior vice president within
the Shipping Division in Oslo and in 1992 he took charge of the
Shipping/Offshore and Transport Division. When Christiania
Bank merged with Nordea in 2001 he was made executive vice
president within the newly formed organization while adding the
International Division to his responsibilities. Mr. Steen remained
head of shipping, offshore and oil services and the International
Division until 2011. Since leaving Nordea, Mr. Steen has become
a non-executive director for the following listed companies in
the finance, shipping and logistics sectors: Golar LNG and Golar
MLP, both part of the same group and where he also sits on the
audit committee, Wilh Wilhelmsen and Belships.
Ceres Investments (Cyprus) Limited / Tanklog Holdings
Limited, Peter G. Livanos (permanent representative) –
Chairman (until 3 December 2015)
Peter G. Livanos served as the Chairman of the Board of
the Company through his appointment as the permanent
representative of first Tanklog Holdings Limited and
subsequently Ceres Investments (Cyprus) Limited until
his resignation from the Board with effect after the Board
meeting of 3 December 2015. Mr. Livanos has served on
the Company’s Board of Directors since April 2005 and at
the time of his resignation was a member of the Health,
Safety, Security and Environmental Committee and the
Remuneration Committee. Mr. Livanos still holds the position
of chairman of the Board of Directors of GasLog Ltd (NYSE:
GLOG) (since 2003), where he also served as Chief Executive
Officer during the period from 2012 to 2013. In addition,
Mr. Livanos is the chairman and sole shareholder of Ceres
Shipping Ltd an international shipping group, and currently
serves as a director of GasLog Partners LP (NYSE: GLOP),
DryLog Ltd, EnergyLog Ltd and Tanklog Holdings Limited.
In addition, Mr. Livanos is a member of the Council of the
American Bureau of Shipping and chairman of the Greek
National Committee. In 1989 Mr. Livanos formed Seachem
Tankers Ltd, which joined forces with Odfjell in 2000, creating
Odfjell ASA (OSE: ODF), one of the world’s largest chemical
tanker operators. He served on the Board of Directors of
Odfjell SE until 2008. Mr. Livanos is a graduate of Columbia
University in New York.
the Company’s
Marc Saverys – Vice-Chairman (until 3 December 2015)
former Vice-Chairman,
Marc Saverys,
served on the Board of Directors of the Company since its
incorporation in 2003 until his resignation from the Board
effective after the Board meeting of 3 December 2015. During
the period from 2003 through July 2014, he served as the
Chairman of the Board. Since July 2014 until his resignation
from the Board he served as Vice-Chairman of the Board.
In 1976 Mr. Saverys joined the chartering department of
Bocimar, the dry bulk division of CMB. In 1985 Mr. Saverys
established the dry bulk division of Exmar and in 1991 he
became managing director of CMB, a position that he held
until September 2014 when he was appointed chairman of
CMB. Mr. Saverys also served as the chairman of Delphis NV
since March 2004 and as a Board member of Sibelco NV and
Mediafin NV since June 2005 and October 2005, respectively.
He holds various directorships in companies belonging to the
CMB and Euronav group and is the founder and chairman of
the private foundation Durabilis. He graduated with a degree
in law from the University of Ghent.
Paddy Rodgers – Director – CEO
Patrick Rodgers serves on the Board of Directors since June
2003 and has been a member of the Executive Committee
since 2004. Mr. Rodgers was appointed Chief Financial Officer
of the predecessor of the Company in 1998 and has been
Chief Executive Officer since 2000. Since 2005, Mr. Rodgers
holds various directorships in companies belonging to the
CMB and Euronav group. Mr. Rodgers currently serves as a
director and chairman of the International Tanker Owners
Pollution Federation Fund since 2011. From 1990 to 1995 Mr.
Rodgers worked at CMB group as an in-house lawyer and
subsequently as Shipping Executive. Mr. Rodgers began his
career in 1982 as a trainee lawyer with Keene Marsland &
Co. In 1984 he joined Bentley, Stokes & Lowless as a qualified
lawyer and in 1986 he joined Johnson, Stokes & Master in
Hong Kong as a solicitor. Mr. Rodgers graduated in law from
University College London in 1981 and from the College of
Law, Guildford in 1982.
Daniel R. Bradshaw – Director
Daniel R. Bradshaw serves on the Board of Directors since
2004, and is a member of the Audit and Risk Committee and
the Chairman of the Corporate Governance and Nomination
Committee. Since 2014, Mr. Bradshaw also serves as an
independent director of GasLog Partners LP (NYSE: GLOP),
a Marshall Islands limited partnership. Since 2013, Mr.
Bradshaw is a director of Greenship Offshore Manager
Pte Ltd and since 2010 he serves as an independent non-
executive director of IRC Limited, a company listed in Hong
Kong, which operates iron mines in far Eastern Russia, and
which is an affiliate of Petropavlovsk PLC, a London-listed
mining and exploration company. Since 2006, Mr. Bradshaw
is an independent non-executive director of Pacific Basin
Shipping Company Limited, a company listed in Hong Kong
and operating in the Handysize bulk carrier sector. Since
1978 Mr. Bradshaw has worked at Johnson Stokes & Master,
now Mayer Brown JSM, in Hong Kong, from 1983 to 2003 as
a partner and since 2003 as a senior consultant. From 2003
until 2008 Mr. Bradshaw was a member of the Hong Kong
Maritime Industry Council. From 1993 to 2001 he served as
vice-chairman of the Hong Kong Shipowners’ Association
and was a member of the Hong Kong Port and Maritime
Board until 2003. Mr. Bradshaw began his career with the
New Zealand law firm Bell Gully and in 1974 joined the
international law firm Sinclair Roche & Temperley in London.
Mr. Bradshaw obtained a Bachelor of Laws and a Master of
Laws degree at the Victoria University of Wellington (New
Zealand).
Ludwig Criel – Director
Ludwig Criel serves on the Board of Directors since the
Company’s incorporation in 2003 and currently is a member
of the Corporate Governance and Nomination Committee.
Mr. Criel is the chairman of De Persgroep since 1996. Mr.
Criel further serves as a director of CMB and of Exmar NV
since 1991. Since 1983 he has held various management
functions within the Almabo/Exmar group and he was made
chief financial officer of CMB in 1993. In 1999 Mr. Criel was
appointed managing director of the Wah Kwong group in Hong
Kong. Mr. Criel joined Boelwerf as a project manager in 1976.
He is vice-chairman of the West of England P&I Club. In 1974
Mr. Criel graduated in applied economic sciences from the
University of Ghent. He also holds a degree in management
from the Vlerick School of Management.
Alexandros Drouliscos – Independent director
Alexandros Drouliscos serves on the Board of Directors since
May 2013 and currently is a member of the Remuneration
Committee. Since 1999 he held the position of managing
director at a family-owned European bank, Union Bancaire
Privée. From 1986 to 1992 Mr. Drouliscos held the position
of vice president at Chase Manhattan Bank NA, working
as a credit officer and then as an investment officer, and
subsequently, from 1992 to 1997, as a senior vice president at
Merrill Lynch. He graduated from the American University in
Corporate Governance Statement 33
Athens with a Bachelor’s degree in Business Administration
in 1982 and then continued his postgraduate studies at
Heriott Watt University in Edinburgh, with an M.Sc. in
International Banking.
Julian Metherell – Director (until 3 December 2015)
Julian Metherell served on the Board of Directors from May
2014 until December 2015. He was also a member of the
Audit and Risk Committee and Corporate Governance and
Nomination Committee. Since October 2011 Mr. Metherell
serves as a director of GasLog Ltd, a NYSE-listed owner and
operator of LNG carriers. From 2011 until April 2015 he was
the chief financial officer and a director of Genel Energy Plc,
a leading independent oil and gas exploration and production
company operating in the Kurdistan Region of Iraq. Genel
Energy Plc, the successor to Vallares Plc, is a publicly listed
acquisition company which Mr. Metherell co-founded in April
2011. Mr. Metherell was a partner at the Goldman Sachs
Group, Inc., where he served as chief executive officer of
the UK investment banking division, prior to which he was a
director in the European energy group at Dresdner Kleinwort,
a London-based investment bank. Mr. Metherell is a graduate
of Manchester University, where he received a B.Sc. degree,
and of Cambridge University, where he received an M.B.A.
John Michael Radziwill – Director
John Michael Radziwill serves on the Board of Directors since
2013 and currently is a member of the Health, Safety, Security
and Environmental Committee. Mr. Radziwill is also the chief
executive officer of C Transport Maritime S.A.M. in Monaco
(since 2010), prior to which he served in its commercial
department as a Capesize freight trader from 2005 to 2006
and as the head of the sale and purchase division from 2006
through 2010. From 2004 to 2005 Mr. Radziwill worked at H.
Clarkson & Co. Ltd and Seascope Insurance Services Ltd
both in London, England. In 2003 he joined Ceres Hellenic’s
Insurance and Claims Department in Piraeus, Greece. Mr.
Radziwill also serves as an advisor of SCP Clover Maritime,
a company that manages assets and investments for Mr.
John Radziwill, his father, and specifically for JM Maritime
Investments Inc. and Bretta Tanker Holdings, Inc. Mr. John
Michael Radziwill is a member of the American Bureau of
Shipping and the Baltic Exchange. Mr. Radziwill graduated
from Brown University in 2002 with a BA in Economics, after
which he served as Administrative Officer at Ceres Hellenic
Enterprise’s New Building Site Office in Koje, South Korea.
William Thomson – Independent director
William Thomson has served on the Board of Directors since
2011 and is the Chairman of the Remuneration Committee
and a member of the Audit and Risk Committee. Currently and
since 2005 Mr. Thomson holds a directors’ mandate in Latsco,
established to operate under the British Tonnage Tax Regime
Very Large Gas Carriers (VLGC), long-range and medium-
range vessels. From 1980 to 2008 Mr. Thomson has been
chairman in several maritime and other companies including
34 Corporate Governance Statement
Forth Ports Plc, British Ports Federation and Relayfast,
and the North of England P&I club. Mr. Thomson previously
served as a director of Trinity Lighthouse Service, Tibbett and
Britten and Caledonian McBrayne. From 1970 to 1986 he was
a director with Ben Line, for which he worked in, amongst
others, Japan, Indonesia, Taiwan and Edinburgh. In 1985 he
established Edinburgh Tankers and five years later, Forth and
Celtic Tankers. After serving with the army for three years,
Mr. Thomson began his professional career with Killick Martin
Shipbrokers in London.
Alice Wingfield Digby – Independent director
Alice Wingfield Digby serves on the Board of Directors since
May 2012 and is a member of the Audit and Risk Committee
and the Chairman of the Health, Safety, Security and
Environmental Committee. Mrs. Wingfield Digby currently
works at Pritchard-Gordon Tankers Ltd, where she started
as chartering manager in 1999. Since 1995, she serves as a
member of the board of directors of Giles W. Pritchard-Gordon
& Co., Pritchard-Gordon Tankers Ltd and Giles W. Pritchard-
Gordon (Shipowning) Ltd, and since 2005 as a member of the
board of Giles W. Pritchard-Gordon (Farming) Ltd and Giles W.
Pritchard-Gordon (Australia) Pty Ltd Mrs. Wingfield Digby has
been a member of the Baltic Exchange since 2002. In the late
nineties Mrs. Wingfield Digby joined the chartering department
of Mobil before the merger with Exxon in 1999. From 1995
to 1996 she trained with Campbell Maritime Limited, a ship
management company in South Shields, and subsequently at
British Marine Mutual P&I Club, SBJ Insurance Brokers and
J. Hadjipateras in London after returning from working at sea
as a deckhand on board a tanker trading around the Eastern
Caribbean. In 1996, Mrs. Wingfield Digby was awarded the
Shell International Trading and Shipping Award in tanker
chartering from the Institute of Chartered Shipbrokers.
Anne-Hélène Monsellato – Independent Director (as of 13
May 2015)
Anne-Hélène Monsellato serves on the Board of Directors
since her appointment at the AGM of May 2015, and is the
chairman of the Audit and Risk Committee and a member of
the Corporate Governance and Nomination Committee. Mrs.
Monsellato is a member of the French National Association of
Directors and of the Selection Committee of Femmes Business
Angels since 2013. In addition, she is serving as the treasurer
of the Mona Bismarck American Center for Art and Culture, a
U.S. foundation based in New York. From 2005 till 2013, Mrs.
Monsellato served as a partner with Ernst & Young (now EY),
Paris, after having served as auditor/senior manager and
senior manager for the firm starting in 1990. During her time
at EY, she gained extensive experience in cross border listing
transactions, in particular with the U.S. She is a Certified
Public Accountant in France since 2008 and graduated from
EM Lyon in 1990 with a degree in Business Management.
The attendance rate of the members was the following:
NAME
Carl Steen1
TYPE OF
MANDATE
Chairman
Independent
Director
MEETINGS
ATTENDED
Not applicable
Peter G. Livanos2,3
Chairman
7 out of 7
Marc Saverys3
Vice - Chairman
6 out of 7
Paddy Rodgers
CEO
7 out of 7
Daniel R. Bradshaw
Director
6 out of 7
Ludwig Criel
Director
7 out of 7
Alexandros
Drouliscos
Independent
Director
7 out of 7
Julian Metherell3
Director
7 out of 7
John Michael
Radziwill
William Thomson
Alice Wingfield Digby
Anne-Hélène
Monsellato4
Director
6 out of 7
Independent
Director
Independent
Director
Independent
Director
7 out of 7
6 out of 7
6 out of 6
Ludovic Saverys5
Director
6 out of 6
1 Mr. Carl Steen was appointed Chairman of the Board of Directors
effective immediately after the Board meeting of 3 December 2015,
in replacement of Mr. Peter G. Livanos (as permanent representative
for Ceres Investments (Cyprus) Limited.
2 The mandate of Tanklog Holdings Limited, permanently represented by
Mr. Peter G. Livanos, expired immediately after the AGM of 13 May 2015.
As of the same date, Ceres Investments (Cyprus) Limited, permanently
represented by Mr. Peter G. Livanos, was appointed Director and
Chairman of the Board of Directors and member of the Remuneration
Committee and the Health, Safety, Security and Environmental
Committee.
3 Mr. Peter G. Livanos, as a permanent representative of Ceres
Investments (Cyprus) Limited, Mr. Marc Saverys and Mr. Julian
Metherell resigned from the Board of Directors with effect immediately
after the Board meeting of 3 December 2015.
4 Mrs. Anne-Hélène Monsellato was appointed Independent Director as
of 13 May 2015, Chairman of the Audit and Risk Committee and member
of the Corporate Governance and Nomination Committee.
5 Mr. Ludovic Saverys was appointed Director as of 13 May 2015 and a
member of the Remuneration Committee and a member of the Health,
Safety, Security and Environmental Committee.
Corporate Governance Statement 35
Ludovic Saverys – Director
Ludovic Saverys serves on the Board of Directors since
2015 and is member of the Remuneration Committee and a
member of the Health, Safety, Security and Environmental
Committee. Mr. Saverys currently serves as chief financial
officer of CMB NV and as general manager of Saverco NV.
During the time he lived in New York, Mr. Saverys served
as chief financial officer of MiNeeds Inc. from 2011 till 2013
and as chief executive officer of SURFACExchange LLC from
2009 till 2013. He started his career as managing director of
European Petroleum Exchange (EPX) in 2008. From 2001 till
2007 he followed several educational programs at universities
in Leuven, Barcelona and London from which he graduated
with M.Sc. degrees in International Business and Finance.
Composition
The Board of Directors currently consists of ten members. One
member has an executive function; nine are non-executive
Directors of which five are Independent Directors in the
meaning of Article 526ter of the Belgian Company Code and
Annex 2 of the Corporate Governance Charter and under Rule
10A-3 promulgated under the U.S. Securities Exchange Act of
1934 and under the rules of the NYSE. In addition, Mr. Daniel
R. Bradshaw is considered independent under Rule 10A3
promulgated under the U.S. Securities Exchange Act of 1934
and under the rules of the NYSE. The articles of association
provide that the members of the Board remain in office for
a period not exceeding four years. The Board members are
eligible for re-election. The articles of association of the
Company do not provide an age limit for the members of the
Board.
Functioning of the Board of Directors
In 2015 the Board of Directors formally met seven times for
a Board meeting, three times of which the Board of Directors
deliberated via telephone conference. In addition, two Board
meetings were formally held before the notary public in
relation to a capital increase within the authorized capital on
the occasion of the U.S. IPO and the mandatory contribution in
kind of 30 perpetual convertible preferred equity instruments.
Working procedures
The Board of Directors is the ultimate decision-making body
of the Company, with the exception of the matters reserved
to the shareholders’ meeting as provided by law or the
articles of association. In addition to the statutory powers,
the responsibilities of the Board of Directors are further
defined in Article III.1 of the Corporate Governance Charter.
All decisions of the Board are taken in accordance with
Article 22 of the articles of association which inter alia states
that the Chairman has a casting vote in case of deadlock.
To date that has not been necessary. Besides the formal
meetings, the Board members of Euronav are in contact
with each other very regularly, including by conference call,
and as it is often difficult to formally meet in case an urgent
decision is required, the written decision-making process
was used four times in 2015.
Activity report 2015
In 2015 besides the above-mentioned customary agenda
items, Euronav’s Board of Directors deliberated on:
• the Initial Public Offering of the Company’s shares in the
United States of America and the related exchange offer
under the laws of the United States of America;
• the contribution in kind of certain perpetual convertible
preferred securities;
• the incorporation of a new wholly owned subsidiary in
Singapore;
• the sale of the Suezmax Cap Laurent;
• the refinancing of part of the VLCC and Suezmax fleet by
entering into a new senior secured credit facility;
• the entering into an unsecured corporate credit facility;
• the acquisition through resale of four VLCCs completing
construction between September 2015 and May 2016 and
the delivery of the first vessel in September 2015;
• the conclusion or extension of certain long-term time
charter parties;
• a long-term incentive plan.
36 Corporate Governance Statement
Procedure for conflicts of interest
The procedure for conflicts of interest within the Board of
Directors is set out in the Company’s Corporate Governance
Charter (section III.7).
During 2015 there were no transactions to report involving
a conflict of interest at Board level. The policy relating
to conflicts of interest which do not fall under the legal
provisions for conflicts of interest at Board level did not have
to be applied.
2.2 Board Committees
2.2.1 Audit and Risk Committee
Composition
In accordance with Article 526bis §2 of the Belgian Company
Code and provision 5.2./4 of Appendix C to the Belgian
Corporate Governance Code of 2009, the Audit and Risk
Committee is exclusively composed of non-executive Directors
and a majority of the Committee’s members are Independent
Directors. The Audit and Risk Committee of Euronav counts
four members, three of which are independent directors.
As at 31 December 2015 the composition of the Audit and
Risk Committee was as follows:
NAME
Anne-Hélène
Monsellato1
William Thomson
Alice Wingfield Digby2
Daniel R. Bradshaw
END TERM OF
OFFICE
INDEPENDENT
DIRECTOR
2018
2018
2016
2017
X
X
X
1 Independent Director and expert in accounting and audit related matters
(see biography) in accordance with Article 96 paragraph 1, 9° of the
Belgian Company Code. Mrs. Anne-Hélène Monsellato was appointed
Chairman of the Audit and Risk Committee as of her appointment in May
in replacement of Mr. William Thomson who remains member of the
Audit and Risk Committee.
2 Mrs. Alice Wingfield Digby became a member of the Audit and Risk
Committee as of Q2.
Powers
The Audit and Risk Committee handles a wide range of
financial reporting, controlling and risk management matters.
Its main responsibilities and its functioning are described in
Annex 3 to the Corporate Governance Charter.
The Audit and Risk Committee reviews its term of reference
periodically and, where applicable, makes recommendations
to the Board of Directors, if changes are useful or required, to
ensure the composition, the responsibilities and the powers of
the Committee comply with applicable laws and regulations.
Activity report 2015
In 2015 the Audit and Risk Committee convened ten times. The
attendance rate of the members was as listed below:
During these meetings the key elements discussed within
the Audit and Risk Committee included financial statements,
cash management, external and internal audit reports, old
and new financing, accounting policies, matters related
to the Sarbanes-Oxley Act, certain company policies, risk
management and debt covenants.
2.2.2 Remuneration Committee Composition
In accordance with Article 526quater §2 of the Belgian
Company Code, all members of the Remuneration Committee
are non-executive Directors, the majority being Independent
Directors. The Remuneration Committee consists of three
Directors, two of which are Independent Directors.
As at 31 December 2015, the Remuneration Committee was
composed as follows:
NAME
END TERM OF
OFFICE
INDEPENDENT
DIRECTOR
TYPE OF
MANDATE
MEETINGS
ATTENDED
NAME
Anne-Hélène
Monsellato
William Thomson
Alice Wingfield Digby
Independent
Director
Independent
Director
Independent
Director
7 out of 7
10 out of 10
William Thomson1
Alexandros Drouliscos
6 out of 7
Ludovic Saverys2
2018
2017
2018
X
X
Daniel R. Bradshaw
Director
8 out of 10
Julian Metherell1
Former Director
9 out of 10
1 Mr. William Thomson was a member of the Remuneration Committee
until Q1. He was appointed Chairman of the Remuneration Committee as
of Q2 in replacement of Mr. Alexandros Drouliscos.
2 Mr. Ludovic Saverys became a member of the Remuneration Committee
1 Mr. Julian Metherell was a member of the Audit and Risk Committee
until his resignation from the Board of Directors effective immediately
after the Board meeting of 3 December 2015
as of Q2.
Corporate Governance Statement 37
Powers
The Remuneration Committee has
various advisory
responsibilities relating to the remuneration policy of
members of the Board of Directors, members of the Executive
Committee and employees in general. Annex 4 to the Corporate
Governance Charter contains a detailed list of the powers and
responsibilities of the Remuneration Committee.
During these meetings the key elements discussed within
the Remuneration Committee included the remuneration
of Directors and members of the Executive Committee, the
annual bonus for the members of the Executive Committee
and employees and the set-up of a long-term incentive plan
as well as the development of a remuneration package for the
members of the Executive Committee.
The Remuneration Committee makes recommendations
to the Board of Directors relating to the remuneration of
the non-executive and executive Directors and members of
the Executive Committee, including variable remuneration,
incentives, bonuses etc.
industry
benchmarks.
in line with suitable
The Remuneration Committee reviews its term of reference
periodically and, where applicable, makes recommendations
to the Board of Directors, if changes are useful or required, to
ensure the composition, the responsibilities and the powers of
the Committee comply with applicable laws and regulations.
Activity report 2015
In 2015 the Remuneration Committee met seven times.
The attendance rate of the members was as listed hereafter:
NAME
TYPE OF MANDATE
William Thomson
Alexandros Drouliscos
Independent
Director
Independent
Director
ATTENDED
MEETINGS
7 out of 7
7 out of 7
Ludovic Saverys
Director
5 out of 5
2.2.3 Corporate Governance and Nomination Committee
Composition
As at 31 December 2015, the Corporate Governance and
Nomination Committee of Euronav counted three members,
one of which is an Independent Director. In this respect, Euronav
was not in compliance with provision 5.3./1 of Appendix C to
the Belgian Corporate Governance Code of 2009, pursuant to
which a nomination committee should comprise a majority of
independent non-executive directors.
This non-compliance is a consequence of the reorganization
of Euronav’s Board Committees during 2015, in the framework
of the U.S. IPO and the transitional period the Company was
and is still going through. In order to have a lean and efficient
Committee, it was decided to limit the number of Committee
members to three. The composition of the Committee was
further determined taking into account members’ expertise
in this area and their availability, given other Committee
memberships.
As of 31 December 2015, the Corporate Governance and
Nomination Committee was composed as follows:
NAME
Daniel R. Bradshaw
END TERM OF
OFFICE
INDEPENDENT
DIRECTOR
2017
2016
2018
X
Alice Wingfield Digby1
Independent
Director
2 out of 2
Ludwig Criel
Anne-Hélène Monsellato1
Peter G. Livanos2
Former Director
7 out of 7
1 Mrs. Alice Wingfield Digby was a member of the Remuneration
Committee until Q1.
2 Mr. Peter G. Livanos, as a permanent representative of Tanklog
Holdings Ltd, was a member of the Remuneration Committee until
Q1. As a permanent representative of Ceres Investments (Cyprus) Ltd,
he was a member of the Remuneration Committee as of Q2 until his
resignation from the Board of Directors effective immediately after the
Board meeting of 3 December 2015.
38 Corporate Governance Statement
1 Mrs. Anne-Hélène Monsellato became a member of the Corporate
Governance and Nomination Committee as of Q2.
Powers
The Corporate Governance and Nomination Committee’s role
is to assist and advise the Board of Directors in all matters
relating to the composition of the Board and its Committees
and the composition of the Company’s Executive Committee,
to the methods and criteria for appointing and recruiting
Directors and members of
the Executive Committee,
evaluating the performance of the Board, its Committees
and the Executive Committee, as well as in any other matters
relating to corporate governance. Annex 5 to the Corporate
Governance Charter contains a detailed list of the powers and
responsibilities of the Corporate Governance and Nomination
Committee.
In 2015 the Health, Safety, Security and Environmental
Committee was composed as follows:
Activity report 2015
In 2015 the Corporate Governance and Nomination Committee
met five times. The attendance rate of the members was as
follows:
NAME
Daniel R. Bradshaw
Ludwig Criel
Anne-Hélène
Monsellato
TYPE OF
MANDATE
ATTENDED
MEETINGS
Director
Director
Independent
Director
5 out of 5
4 out of 5
4 out of 4
Julian Metherell1
Former Director
5 out of 5
Alice Wingfield Digby2
Independent
Director
1 out of 1
1 Mr. Julian Metherell was a member of the Corporate Governance and
Nomination Committee until his resignation from the Board of Directors
effective immediately after the Board meeting of 3 December 2015.
2 Mrs. Alice Wingfield Digby was a member of the Corporate Governance
and Nomination Committee until Q1.
During these meetings the key elements discussed within the
Corporate Governance and Nomination Committee included
the assessment of the Board of Directors and its Committees
in cooperation with an independent external consultant and
the composition of the Board of Directors and its Committees,
including gender considerations.
In addition, in February and March 2016, the Company arranged
for a Corporate Governance Roadshow for interested investors,
which consisted of one-to-one presentations over the phone
guided by the Chairman of the Corporate Governance and
Nomination Committee. The main purpose of the roadshow
was to set out the recent developments in relation to corporate
governance and the remuneration policy. The participation
of investors was much appreciated by the Company as this
allowed an open discussion with investors on these matters
and it enabled the Company to gain a good feeling of what
investors consider important. The feedback received from the
investors will be processed in the course of 2016.
2.2.4 Health, Safety, Security and Environmental Committee
Composition
The Health, Safety, Security and Environmental Committee is
composed of at least three members of the Board of Directors.
NAME
END TERM OF
OFFICE
INDEPENDENT
DIRECTOR
Alice Wingfield Digby
Ludovic Saverys1
John Michael Radziwill
2016
2018
2017
X
1 Mr. Ludovic Saverys became a member of the Health, Safety, Security
and Environmental Committee as of Q2.
Powers
The role of the Health, Safety, Security and Environmental
Committee is to assist and advise the Board of Directors
relating to its responsibilities regarding health, safety, security
or environmental matters and general policies in this respect,
as well as any corrective action to be taken in case of serious
injury or incident. Annex 6 to the Corporate Governance Charter
contains a detailed list of the powers and responsibilities of
the Health, Safety, Security and Environmental Committee.
Activity report 2015
In 2015 the Health, Safety, Security and Environmental
Committee met two times. The attendance rate of the
members was as listed hereafter:
NAME
TYPE OF
MANDATE
ATTENDED
MEETINGS
Alice Wingfield Digby
Independent
Director
2 out of 2
John Michael Radziwill
Director
2 out of 2
Ludovic Saverys
Director
1 out of 1
Peter G. Livanos1
Former Director
2 out of 2
1 Mr. Peter G. Livanos, as a permanent representative of Tanklog
Holdings Ltd, was a member of the Health, Safety, Security and
Environmental Committee until Q1. As a permanent representative
of Ceres Investments (Cyprus) Ltd, he was a member of the Health,
Safety, Security and Environmental Committee as of Q2 until his
resignation from the Board of Directors effective immediately after the
Board meeting of 3 December 2015.
During these meetings the key elements discussed within
the Health, Safety, Security and Environmental Committee
included the review and monitoring of the Company’s safety
campaign and its Safety Initiative Plan and the monitoring of
matters relating to vetting and port state control.
Corporate Governance Statement 39
2.3 Executive Committee
Composition
In application of Article 524bis of the Belgian Company Code,
the executive management of the Company is entrusted to
the Executive Committee chaired by the CEO. The members
of the Executive Committee are appointed by the Board of
Directors upon proposal by the Chairman of the Board or
the Chief Executive Officer and as reviewed by the Corporate
Governance and Nomination Committee.
The Executive Committee is composed as follows:
NAME
TITLE
Hugo De Stoop
Chief Financial Officer
Paddy Rodgers
Chief Executive Officer
Alex Staring
Chief Operating Officer
Egied Verbeeck
General Counsel
Powers and activity report 2015
The Executive Committee is empowered to take responsibility
for the daily operations of the group and the implementation
of the policy and strategy approved by the Board of Directors.
Its powers are further described in detail in Article V.3 of the
Corporate Governance Charter and in Annex 7 to the Corporate
Governance Charter. The Executive Committee reports to the
Board of Directors through the CEO, enabling the Board of
Directors to exercise control on the Executive Committee.
Procedure for conflicts of interest
The procedure for conflict of interest within the Executive
Committee is set out in the Company’s Corporate Governance
Charter (section V.4). In the course of 2015 no decision taken
by the Executive Committee required the application of the
conflict of interest procedure.
3. EVALUATION OF THE BOARD OF
DIRECTORS AND ITS COMMITTEES
The main features of the process for evaluating the Board
of Directors, its Committees and the individual Directors are
described in Chapter III.9 of Euronav’s Corporate Governance
Charter.
In the course of 2015, the Board of Directors was subject to a
thorough assessment procedure led by an independent third
party consultant, Guberna (the Belgian Corporate Governance
Institute). The assessment procedure consisted of a written
questionnaire, followed by individual interviews led by two
members of Guberna. The results were crystallized in a written
report which was presented to the Corporate Governance
and Nomination Committee and subsequently the Board
of Directors in December. Given the transitional period the
Company is currently going through, the Board will re-assess
its composition and the composition of the Committees in the
beginning of 2016, thus taking into account the conclusions
from the assessment procedure. It is the Board’s intention to
organize such assessment at least once every three years.
4. REMUNERATION REPORT
The remuneration report describes Euronav’s executive
remuneration policy and how executive compensation levels
are set. The Remuneration Committee oversees the executive
compensation policies and plans.
Following the Annual General Meeting in May 2015, Euronav
undertook a comprehensive review of its remuneration policy
and disclosure to further align Euronav with international
best practice. In this context, Euronav reached out to its free
float shareholders to enable the Company to take account of
their views and expectations. Although the review process is
ongoing, Euronav believes that it has already implemented
significant improvements in its remuneration report based
on investor feedback, in particular regarding disclosure
of variable pay practices and the structure of long-term
remuneration for the Executive Committee, as outlined in the
following sections.
40 Corporate Governance Statement
4.1 Euronav remuneration policy
The remuneration policy is part of a framework of employee
policies aimed at motivating and retaining current employees,
attracting talented new people and helping Euronav employees
to perform at consistently high levels. All Euronav employees
are subject to an annual performance review process and a
half-year follow up appraisal meeting with their respective
department heads. The execution of this performance review
process is ensured by the Executive Committee.
The General Shareholders’ Meeting decides upon the
remuneration level for Directors, as suggested by the
Board of Directors pursuant to proposals formulated by
the Remuneration Committee. The policy of remuneration
for members of the Executive Committee is set by the
Board of Directors on the basis of recommendations
by the Remuneration Committee. When formulating its
recommendations, in particular for the remuneration of
members of the Executive Committee, the Committee uses
suitable industry benchmarks.
The Remuneration Committee meets at least twice per year
and has the following main responsibilities which are further
outlined in its terms of reference:
• to make recommendations to the Board of Directors relating
to the remuneration policy and the individual remuneration
of the Company’s non-executive and executive Directors,
its Committees, and members of the Executive Committee;
• to make recommendations to the Board of Directors with
respect to policies and principles for performance reviews
of the members of the Executive Committee and oversee
evaluations of the members of the Executive Committee;
• to discuss objectives for the members of the Executive
Committee which could subsequently serve as benchmarks
for the evaluation of their performance;
• to review annually the remuneration of the members of the
Executive Committee and, on a non-individual basis, of the
group of employees;
• to prepare the remuneration report for presentation to the
Annual Shareholders’ Meeting.
Corporate Governance Statement 41
4.2 Remuneration policy for executive and non-
executive Directors
The remuneration of Directors is determined on the basis
of four regular meetings of the full Board per year. Directors
receive an attendance fee for each Board meeting or Committee
meeting attended. The actual amount of the remuneration of
the directors is approved by the Annual General Meeting.
As of the Annual General Meeting held in May 2015 each
Director received a gross fixed amount per annum of EUR
60,000 for the execution of their mandate and an additional
attendance fee of EUR 10,000 per Board meeting attended with
a maximum of EUR 40,000 per year. The Chairman received a
gross fixed amount of EUR 160,000 per year and an additional
attendance fee of EUR 10,000 per Board meeting attended with
a maximum of EUR 40,000 per year. The Chief Executive Officer,
who is also member of the Executive Committee, has waived
his director fees.
For their mandate within the Audit and Risk Committee, the
members received an annual remuneration of EUR 20,000
and the Chairman received a remuneration of EUR 40,000.
Each member of the Audit and Risk Committee, including the
Chairman, received an additional attendance fee of EUR 5,000
per Committee attended with a maximum of EUR 20,000 per
year.
For their mandate within the Remuneration Committee, the
Corporate Governance and Nomination Committee and the
Health, Safety, Security and Environmental Committee, the
The remuneration in 2015 of the members of the Board of Directors is reflected in the table below:
In euro:
NAME
FIXED FEE
ATTENDANCE FEE
BOARD
AUDIT AND RISK
COMMITTEE
ATTENDANCE FEE
AUDIT AND RISK
COMMITTEE
REMUNERATION
COMMITTEE
Carl Steen1
-
Tanklog Holdings Ltd2
40,000
Ceres Investments
(Cyprus) Ltd2,3
Marc Saverys3
Paddy Rodgers4
Daniel R. Bradshaw
Ludwig Criel
Alexandros Drouliscos5
Julian R. Metherell3
John Michael Radziwill
William Thomson6
Alice Wingfield Digby7
Anne-Hélène
Monsellato8
Ludovic Saverys9
TOTAL
120,000
60,000
-
60,000
60,000
60,000
60,000
60,000
60,000
60,000
45,000
45,000
730,000
-
10,000
30,000
40,000
-
30,000
40,000
40,000
40,000
40,000
40,000
30,000
30,000
30,000
400,000
-
-
-
-
-
20,000
-
5,000
20,000
-
25,000
15,000
30,000
-
115,000
-
-
-
-
-
15,000
-
5,000
20,000
-
20,000
10,000
15,000
-
85,000
-
1,250
3,750
-
-
-
-
5,625
-
-
6,875
1,250
-
3,750
22,500
1 Mr. Carl Steen was appointed Chairman of the Board of Directors
effective immediately after the Board meeting of 3 December 2015 in
replacement of Mr. Peter G. Livanos, as a permanent representative of
Ceres Investments (Cyprus) Limited.
2 The mandate of Tanklog Holdings Limited, permanently represented by
Mr. Peter G. Livanos, expired immediately after the AGM of 13 May 2015.
As of the same date, Ceres Investments (Cyprus) Limited, permanently
represented by Mr. Peter G. Livanos, was appointed Director and
became a member of the Remuneration Committee and a member
of the Health, Safety, Security and Environmental Committee as of its
appointment.
3 Mr. Peter G. Livanos, as a permanent representative of Ceres
Investments (Cyprus) Limited, Mr. Marc Saverys and Mr. Julian
Metherell resigned from the Board of Directors effective immediately
after the Board meeting of 3 December 2015.
4 Mr. Paddy Rodgers has waived his directors’ fees.
5 Mr. Alexandros Drouliscos was the Chairman of the Remuneration
Committee and a member of the Audit and Risk Committee until Q1. He
42 Corporate Governance Statement
ATTENDANCE FEE
REMUNERATION
COMMITTEE
CORPORATE
ATTENDANCE FEE COR-
HEALTH, SAFETY,
GOVERNANCE
PORATE GOVERNANCE
SECURITY AND
AND NOMINATION
AND NOMINATION
ENVIRONMENTAL
COMMITTEE
COMMITTEE
COMMITTEE
ATTENDANCE FEE
HEALTH, SAFETY,
SECURITY AND
ENVIRONMENTAL
COMMITTEE
-
-
-
-
-
-
-
5,000
15,000
-
20,000
20,000
5,000
20,000
85,000
-
-
-
-
-
-
-
-
-
7,500
5,000
5,000
1,250
3,750
-
-
-
-
-
-
-
-
-
20,000
15,000
20,000
5,000
15,000
-
-
-
-
-
-
-
-
-
1,250
3,750
5,000
7,500
3,750
21,250
TOTAL
62,500
177,500
100,000
0
0
152,500
120,000
135,625
165,000
115,000
171,875
145,000
138,750
107,500
-
-
-
-
-
-
-
-
5,000
5,000
-
10,000
10,000
5,000
35,000
22,500
75,000
1,591,250
NAME
FIXED FEE
ATTENDANCE FEE
AUDIT AND RISK
BOARD
COMMITTEE
ATTENDANCE FEE
AUDIT AND RISK
COMMITTEE
REMUNERATION
COMMITTEE
Carl Steen1
Tanklog Holdings Ltd2
40,000
Ceres Investments
(Cyprus) Ltd2,3
Marc Saverys3
Paddy Rodgers4
Daniel R. Bradshaw
Ludwig Criel
Alexandros Drouliscos5
Julian R. Metherell3
John Michael Radziwill
William Thomson6
Alice Wingfield Digby7
Anne-Hélène
Monsellato8
Ludovic Saverys9
TOTAL
-
-
120,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
45,000
45,000
730,000
10,000
30,000
40,000
-
-
30,000
40,000
40,000
40,000
40,000
40,000
30,000
30,000
30,000
400,000
20,000
15,000
-
-
-
-
-
-
-
-
5,000
20,000
25,000
15,000
30,000
-
-
-
-
-
-
-
-
5,000
20,000
20,000
10,000
15,000
115,000
85,000
-
-
-
-
-
-
-
-
1,250
3,750
5,625
6,875
1,250
3,750
22,500
members received an annual remuneration of EUR 5,000 and the
Chairman received a remuneration of EUR 7,500. Each member
of any of the Committees, including the Chairman, received an
additional attendance fee of EUR 5,000 per Committee attended
with a maximum of EUR 20,000 per year.
At present non-executive Directors do not receive performance
related remuneration, such as bonuses or remuneration
related shares or share options, nor fringe benefits or pension
plan benefits. As such, Euronav ensures the objectivity of non-
executive Directors and encourages the active participation of
all Directors for both the meetings of the Board of Directors and
the Committee meetings.
No loans or advances were granted to any director.
ATTENDANCE FEE
REMUNERATION
COMMITTEE
CORPORATE
GOVERNANCE
AND NOMINATION
COMMITTEE
ATTENDANCE FEE COR-
PORATE GOVERNANCE
AND NOMINATION
COMMITTEE
HEALTH, SAFETY,
SECURITY AND
ENVIRONMENTAL
COMMITTEE
ATTENDANCE FEE
HEALTH, SAFETY,
SECURITY AND
ENVIRONMENTAL
COMMITTEE
-
5,000
15,000
-
-
-
-
20,000
-
-
20,000
5,000
-
20,000
85,000
-
-
-
-
-
7,500
5,000
-
5,000
-
-
1,250
3,750
-
22,500
-
-
-
-
-
20,000
15,000
-
20,000
-
-
5,000
15,000
-
75,000
-
1,250
3,750
-
-
-
-
-
-
5,000
-
7,500
-
3,750
21,250
-
5,000
5,000
-
-
-
-
-
-
10,000
-
10,000
-
5,000
35,000
TOTAL
0
62,500
177,500
100,000
0
152,500
120,000
135,625
165,000
115,000
171,875
145,000
138,750
107,500
1,591,250
became a member of the Remuneration Committee as of Q2.
6 Mr. William Thomson was the Chairman of the Audit and Risk
Committee and a member of the Remuneration Committee until Q1. He
was appointed Chairman of the Remuneration Committee and member
of the Audit and Risk Committee as of Q2.
7 Mrs. Alice Wingfield Digby was a member of the Remuneration
Committee and was a member of the Corporate Governance and
Nomination Committee until Q1. She became a member of the Audit
and Risk Committee as of Q2.
8 Mrs. Anne-Hélène Monsellato was appointed Independent Director
as of 13 May 2015 and Chairman of the Audit and Risk Committee and
member of the Corporate Governance and Nomination Committee as
of her appointment.
9 Mr. Ludovic Saverys was appointed Director as of 13 May 2015 and
became a member of the Remuneration Committee and a member of
the Health, Safety, Security and Environmental Committee as of his
appointment.
Corporate Governance Statement 43
for
the Executive
4.3 Remuneration policy
Committee and the employees
Euronav’s remuneration packages intend to be fair and
appropriate to attract, retain and motivate management and
to be reasonable in view of the Company economics and the
relevant practices of comparable peer companies.
The Executive Committee and employee compensation
packages are composed of a fixed and a variable element. The
fixed and variable remuneration are determined according
to suitable industry benchmarks for specific positions and
individual employees’ abilities.
The Remuneration Committee decides annually on the
remuneration of the members of the Executive Committee.
Variable remuneration is determined on the basis of each
individual’s performance throughout the year. In the framework
of the variable remuneration, the Board of Directors also
approved a long term incentive plan in 2015 (please see section
4.5 below). The Company has no other rights or remedies than
the ones provided for by civil law and company law to claim
the variable remuneration back, in case it is attributed on the
basis of incorrect financial statements.
Remuneration (fixed and variable) in 2016
However, the Company went through a major transition over
the last 24 months, substantially increasing its fleet size and
successfully completing is Initial Public Offering on the NYSE.
These events transformed the Company from an entity with
concentrated share ownership to a dual listed entity with a free
float of around 85% compared to 37% early 2014. As a result
of these changes the Remuneration Committee acknowledged
that the remuneration structure was due to evolve accordingly.
In this respect the Company engaged PricewaterhouseCoopers
to advise the Remuneration Committee on the development of
a new remuneration structure for the Executive Committee.
This new remuneration structure that was approved by the
Board of Directors at its meeting of 15 March 2016, is based on
four parts which, in an on target year with all KPIs fully met,
looks as follows:
4
3
1
Fix
Variable / at risk
Annual Base Salary
Succes Participation
Individual & Company KPIs
LTIP
1
2
3
4
2
LTIP vests in three phases as from start of year three following the
grant date
44 Corporate Governance Statement
1. Annual Base Salary (fixed)
The fixed part of the remuneration package is referred to as the
Annual Base Salary (“ABS”). The size of the ABS is based on the
required competencies and responsibilities of the position. The
benchmarking exercise revealed that the ABS of Euronav for
the years 2013 and 2014 was lower than the median of shipping
sector. However, the total remuneration of the Executive
Committee on these years was higher than the median. It
is the desire of the Company to keep a significant part of the
remuneration for the Executive Committee members flexible
and dependent on the performance of the Company and to keep
the ABS stable for revision every three years.
2. Success Participation Bonus (variable)
includes a Success
The new remuneration structure
Participation Bonus which varies with the size of the
distributable result during that year. The distributable result
is calculated based on results available for dividend and/or
share buy-back, being 80% of net operating result. A target
distributable result of USD 280 million has been set for the
current year and serves as a target for future years, subject
to review by the Board of Directors upon recommendation of
the Remuneration Committee. If the target has been reached,
this will result in a Success Participation Bonus equal to 100%
of ABS. The Success Participation Bonus will vary pro rata in
the event that the target has not been reached or has been
outperformed:
DISTRIBUTABLE RESULT
IN USD
SUCCESS PARTICIPATION
BONUS ( % OF ABS)
0 Million
70 Million
140 Million
280 Million
560 Million
710 Million
0%
25%
50%
100%
200%
250%
The Remuneration Committee believes that the Success
the Executive Committee
Participation Bonus rewards
members in line with return of capital to shareholders, but
will review the introduction of absolute caps of the Success
Participation Bonus going forward. However, in order to
mitigate super bonuses in years where the freight market on
its own delivered exceptionally high returns and in order to
avoid that individual members of the Executive Committee
would be awarded exceptional bonuses in such years while
underperforming individually, the Remuneration Committee
and the Board of Directors will always review the Success
Participation Bonus against the background of individual
performance. An individual KPI score below 2/5 excludes
eligibility for participation in the Success Participation Bonus.
3. Management Performance Bonus (variable)
This part of the variable bonus is based on pre-determined
individual KPIs and Company KPIs as approved by the Board
of Directors upon recommendation of the Remuneration
Committee. The Remuneration Committee believes that KPIs
should be SMART and align with strategic priorities. Individual
KPIs include:
• (i) standard KPIs that need not necessarily be revisited each
year as they are not linked to specific projects. Examples
of standard KPIs are retention of key talent, no breaches of
loan covenants, successful risk register monitoring, spot
chartering performance compared to peers;
• (ii) project KPIs which will be set annually by the Board
of Directors upon recommendation of the Remuneration
Committee and should be in line with the strategy plan
defined by the Board of Directors. Examples of project
KPIs are successful integration of acquired tonnage,
successful implementation of Sarbanes-Oxley regulation,
development or improvement of department procedures.
Performance under the individual KPIs can result in a bonus
amount between 0% and 50% of ABS. In exceptional cases the
bonus can increase to 60% of ABS.
The Management Performance Bonus can, however, be
reduced if and to the extent certain Company KPIs are not met.
These Company KPIs are standard KPIs which need not to be
revised annually and relate to safety, Company recognition,
investor relations and administration. The Company KPIs
impact equally on all members of the Executive Committee
and is intended to guarantee the integrity of the collegial
responsibility of the Executive Committee.
4. Long Term Incentive Plan (“LTIP”) (variable)
The members of the Executive Committee are also entitled
to a LTIP under the form of phantom stock. The vesting and
settlement of the LTIP is spread over a timeframe of four
years and its main intention is to encourage retention of the
members of the Executive Committee. The phantom stock
awarded matures automatically in three equal tranches on the
second, third and fourth anniversary of the award date. By using
phantom stock the final award value is also linked to future
shareholder value. The Remuneration Committee is of the
opinion that in a market as cyclical as shipping a vesting period
over four years is reasonable. The Remuneration Committee
is further of the opinion that the LTIP ensures long-term
shareholder alignment.
The LTIP is granted to the members of the Executive Committee
for a value equal to the Management Performance Bonus. The
number of phantom stocks awarded is calculated using the
weighted average closing prices of the share three days before
the grant date which is usually three days after the publication
of each full year preliminary results. Other senior employees
may in the future be invited to the LTIP by the Board of Directors
upon recommendation of the Remuneration Committee.
Assessment Process of KPIs for the members of the
Executive Committee
As outlined above, KPIs will be set annually by the Board
of Directors upon recommendation of the Remuneration
Committee.
At year-end all members of the Executive Committee will
perform a self-assessment of their performance. This self-
assessment will be reviewed by and discussed with the other
Executive Committee members. The results of this self-
assessment will be submitted to the Remuneration Committee
who will then give advice to the Board of Directors on the
performance rating.
For the variable remuneration over year 2015 (see below), the
main principles of the new remuneration structure described
above have already been widely applied. It is the view of the
Remuneration Committee that the process, including the self-
assessment, has shown to be effective compared to purely
mathematical bonus calculations and has resulted in fair
variable remuneration amounts.
Corporate Governance Statement 45
4.4 Remuneration of the Executive Committee
Remuneration of the Chief Executive Officer
The remuneration in 2015 of the CEO is reflected in the table below:
IN GBP
FIXED REMUNERATION
Paddy Rodgers
393,728
VARIABLE
REMUNERATION
Cash: 530,000
LTIP: 138,000
PENSION AND
BENEFITS
OTHER COMPONENTS
0
10,779
The CEO has an employment contract. In the event of termination of his contract he would be entitled to a compensation equivalent
to one year’s salary.
No loans or advances were granted to the CEO.
Remuneration of the other members of the Executive Committee
The remuneration in 2015 of the members of the Executive Committee (excluding the CEO) is reflected in the table below:
IN EURO
FIXED REMUNERATION
Three members
1,083,097
VARIABLE
REMUNERATION
Cash: 1,382,000
LTIP: 378,000
PENSION AND
BENEFITS
OTHER COMPONENTS
35,025
57,404
The current composition of the Executive Committee is set out in point 2.3 above. No loans or advances were granted to any member
of the Executive Committee. The COO is entitled to a compensation equivalent to one year’s salary in the event of termination of
his appointment.
Variable remuneration differs amongst the members of the Executive Committee, though globally it can be stated that the variable
remuneration represents 62% of the global remuneration for all members of the Executive Committee together.
In relation to variable remuneration for all members of the Executive Committee, the Company has the right to claim the variable
remuneration back in case of incorrect financial statements or fraud, as provided under civil and Company law provisions.
4.5 Long Term Incentive Plans
LTIP 2014
Within the framework of a stock option plan, the Board of Directors granted on 16 December 2013 options on its 1,750,000 treasury
shares to the members of the Executive Committee with an exercise price of EUR 5.7705, as follows:
LTIP 2014
CEO
CFO
COO
General Counsel
GRANTED
525,000
525,000
350,000
350,000
VESTED
525,000
525,000
350,000
350,000
EXERCISED
350,000
350,000
350,000
350,000
LTIP 2015
Within the framework of a management incentive plan, the Board of Directors granted on 12 February 2015 65,433 Restricted
Stock Units (RSU’s) and 236,590 stock options as follows:
LTIP 2015
CEO
CFO
COO
General Counsel
GRANTED
80,518
58,716
54,614
42,742
VESTED
26,839
19,572
18,205
14,247
EXERCISED
-
-
-
-
46 Corporate Governance Statement
RSU
CEO
CFO
COO
General Counsel
GRANTED
22,268
16,239
15,105
11,821
The exercise price of the options is EUR 10.0475.
The RSU’s will all vest automatically on the third anniversary of the grant.
LTIP 2016
Within the framework of a Phantom Stock Plan, the Board of Directors granted on 2 February 2016 54,616 phantom stock units
as follows:
LTIP 2016
CEO
CFO
COO
General Counsel
GRANTED
17,116
20,728
8,009
8,762
VESTED
-
-
-
-
The phantom stock units will mature one-third each year on the second, third, fourth anniversary of the award. All of the
beneficiaries have accepted the phantom stock units granted to them. The number of phantom stocks granted was calculated on
the basis of a share price of euro 10.6134 which equals the weighted average of the share price of the three days preceding the
grant date.
4.6 Remuneration of the Auditor Klynveld Peat Marwick Goerdeler (KPMG)
Permanent representatives: Serge Cosijns, Jos Briers (until 13 May 2015) and Götwin Jackers (as of 13 May 2015)
For 2015, the worldwide audit and other fees in respect of services provided by the statutory auditor KPMG can be summarized as
follows:
IN USD
Audit services for the annual financial statements
Audit related services
Tax services
TOTAL
2015
653,484
150,607
2,063
806,154
2014
492,497
1,509,927
71,807
2,074,230
The limits prescribed by Article 133 of the Belgian Company Code were observed.
Corporate Governance Statement 47
5. INTERNAL CONTROL AND RISK
MANAGEMENT SYSTEMS
Internal control can be defined as a system developed
and implemented by management and which contributes
to managing the activities of the Company, its efficient
functioning and the efficient use of its resources, all in
function of the objectives, the size and the complexity of
its activities. Risk assessment can be defined as a process
developed to identify possible events which may affect the
Company and to manage the risks of the Company within the
boundaries of its risk appetite.
These risks (as described in more detail in the ‘Risk Factors’
section in this annual report) are the following:
• economic (including slowing economic growth, inflation
or fluctuations in interest and foreign currency exchange
rates) and competitive risks (such as greater price
competition);
• operational: risks inherent in the operation of ocean-going
vessels, the conversion of vessels, the operation of its FSO
activities and effective management of its international
operations;
• regulations: if the Company fails to comply with health,
safety and environmental laws, regulations (including
is
regulations about emissions) or requirements or
involved in legal proceedings in this regard, its operations
and revenues may be adversely affected;
• financing: the Company is subject to operational and
financial restrictions in debt agreements; refinancing of
loans may not always be possible;
• terrorist attacks, piracy, civil disturbances and regional
conflicts in any particular country;
• risks relating to the TI Pool and VLCC Chartering, the joint
ventures and associates.
As part of the reference framework Euronav:
• laid down its ethical values and business conduct rules in
the ‘Code of Business Conduct and Ethics’ and the ‘Dealing
Code’;
• has also included these values and rules in the Staff
Handbook for all its employees;
• clearly documented its corporate structure, organization
chart and job descriptions (and hence tasks, responsibilities
and reporting lines);
• clearly specified the delegations of authority for key
decisions;
• ensures proper communication between local management
and Executive Committee throughout various committees
such as management committee, pool committee, revenue
committee, insurance committee,…;
48 Corporate Governance Statement
• has embedded group policies in the main business
processes, which Euronav applies group-wide, covering
areas such as: fixed assets, financial statement close,
procurement, order-to-cash, hedging, IT systems, human
resources & payroll, treasury, tax, insurances,…
Euronav also has developed a Health, Safety, Quality and
Environmental (HSQE) Management System which integrates
health, safety, environment and quality management into a
system that fully complies with the ISM Code for the Safe
Operation of Ships and Pollution Prevention.
To support the financial reporting, Euronav has a system of
internal control over financial reporting including policies
and procedures to accurately reflect the transactions and
dispositions of assets of the Company, provide reasonable
assurance that transactions are recorded in accordance
with generally accepted accounting principles and that
provide reasonable assurance to timely detect unauthorized
acquisition or use or disposition of Company’s assets.
Compliance is monitored by means of annual assessments
attended by senior management and their outcome is
reported to the corporate finance function, which presents
a consolidated report to the Audit and Risk Committee. More
details on the exact role and responsibilities of the Audit
and Risk Committee in relation to the internal control and
risk management systems can be found in the section on its
powers, described above.
In addition, the Compliance Officer assesses the application
of the Corporate Governance Charter.
Euronav has outsourced the internal audit function to Moore
Stephens, upon recommendation of the Audit and Risk
Committee. Moore Stephens reviews and analyzes strategic,
operational, financial and IT risks and discusses the findings
with the Audit and Risk Committee.
Euronav has appointed KPMG as its external auditor to verify
its financial results and compliance with Belgian legislation.
The external auditor issues a report at least twice a year
which they submit to the Audit and Risk Committee. They are
also invited to attend the Annual General Meeting to present
their report.
5.1 Hedging policy
Euronav hedges part of its exposure to changes in interest rates
on borrowings and all borrowings contracted for the financing
of vessels are on the basis of a floating interest rate, increased
by a margin. The Group does not hold or trade derivatives
for speculative purposes. Euronav uses derivative financial
instruments - such as foreign exchange forward contracts,
interest rate swaps, purchase of CAP options, sale of FLOOR
options, currency swaps and other derivative instruments
- solely to manage its exposure to interest rates and foreign
currency exchange rates and to achieve an appropriate mix of
fixed and floating rate exposure as defined by the Group. For a
more detailed position of Euronav’s financial instruments, we
refer to note 18 of the Financial Statements.
5.2 Tonnage Tax Regime and Risks
Tonnage Tax Regime
Shortly after its incorporation, Euronav applied for treatment
under the Belgian tonnage tax regime. It was declared eligible
for this regime by the Federal Finance Department on 23
October 2003. Following the acquisition of the Tanklog fleet and
Euronav’s express desire to operate the vessels under Greek
flag, Euronav was deemed eligible for tonnage tax in Greece. As a
result, for a ten-year period, Euronav’s profits will in principle be
determined nominally on the basis of the tonnage of the vessels
it operates. After this first ten-year period had elapsed, the
tonnage tax regime has been automatically renewed for another
ten year period. This tonnage tax replaces all factors that are
normally taken into account in traditional tax calculations, such
as profit or loss, operating costs, depreciation, gains and the
offsetting of past losses of the revenues taxable in Belgium.
Some of Euronav’s subsidiaries are subject to the ordinary
Belgian corporate income tax regime, however, which benefit
from a tax investment allowance due to the recent acquisitions
of certain VLCCs. Nevertheless, Euronav has decided to apply
for the Belgian tonnage tax regime for those subsidiaries and
obtained the authorization for both subsidiaries in the beginning
of 2016.
Risks associated to the business
Due to the cyclical nature of its activities
Euronav’s operating results have experienced fluctuations on an
annual or quarterly basis in the past. This will probably remain
the case in the future. The fluctuations in Euronav’s operating
results are due to various factors, a number of which lie outside
Euronav’s control. The tanker market is historically a cyclical
one. It is a market that experiences high volatility as a result
of changes in supply and demand for seaborne transportation
of crude oil. Firstly, the supply of tanker capacity is affected by
the number of newly constructed vessels, the scrap percentage
of existing tankers and the changes in laws and regulations.
Secondly, the demand for tankers is highly sensitive to global
and regional market conditions and to crude oil production
levels. The nature and timing of all these factors, some of which
are of a geopolitical nature, are unpredictable, and may have a
significant impact on Euronav’s activities and operating results.
Euronav is subject to operational and financial restrictions
in debt agreements
Euronav’s existing debt agreements impose operational and
financial restrictions which have an impact on, and in some
respects limit or preclude, among other things, the possibility
for Euronav and its subsidiaries of taking on additional debts,
pledging securities, selling shares in subsidiaries, making
certain investments, entering into mergers and acquisitions,
buying and selling of vessels, or paying dividends without the
lender’s approval.
Euronav’s loan agreements also stipulate a certain minimum
ratio of market value for vessels and other securities. The
financial institutions may reduce the term of the debt under
such loan agreements, and seize the securities used to
guarantee the loan in the event of bankruptcy, including
Euronav’s failure to honor these agreements in full. Under
any of these circumstances, there is no guarantee that
Euronav will have enough funds or other resources to meet
all its commitments.
in
Euronav is subject to the risks inherent in the operation of
ocean-going vessels
Euronav’s activities are subject to various risks, including
extremes of weather, negligence of
its employees,
mechanical defects
its vessels, collisions, severe
damage to vessels, damage to or the loss of freight and
the interruption of commercial activities due to political
circumstances, hostilities or strikes. Moreover, the operation
of ocean-going vessels is subject to the inherent possibility of
maritime disasters such as oil spills and other environmental
accidents, and to the obligations arising from the ownership
and management of vessels in international trade.
Euronav believes that its current insurance policies are
sufficient to protect it against possible accidents, and that it is
also adequately covered against environmental damage and
pollution, as required by relevant legislation and standard
practices in the sector. However, there is no guarantee
that such insurance will remain available at rates which
are regarded as reasonable by the Company, or that such
insurance will remain sufficient to cover all losses incurred
by Euronav or the cost of each compensation claim made
against Euronav, or that its insurance policies will cover
the loss of income resulting from a vessel becoming non-
operational. Should compensation claims be made against
Euronav, its vessels may be impounded or subject to other
judicial procedures.
Euronav’s activities are subject to important environmental
legislation which may cause Euronav’s expenditure to
increase abruptly
Euronav’s activities are subject to extensive, changing
environmental legislation. In the past, Euronav has incurred
significant expenses in order to comply with such legislation
and regulations, including spending on changes to vessels
and to operational procedures. It expects such expenditure
to remain high. Additional laws and regulations could be
introduced restricting Euronav’s ability to pursue its activities,
or causing its costs to increase substantially. That could have
a negative impact on Euronav’s activities, financial situation
and operating results.
Corporate Governance Statement 49
The prospects for a particular period may not be
attained during that period as a result of unpredictable
economic cycles
Although various analysts provide forecasts regarding the
development of the markets, these do not always precisely
reflect future freight rates, which tend to be unpredictable.
The forecasting of freight rates is difficult due to the uncertain
prospects of the global economy.
Euronav may need additional capital in the future and may
prove unable to find suitable funds on acceptable terms
Euronav has made considerable investments in recent years.
Although most of these projects are satisfactorily financed,
the risk exists that the financial markets will be unable to
provide sufficient funds to continue supporting such projects.
Euronav’s activities are subject to fluctuations in exchange
rates and interest rates, causing pronounced variations in
its net results
Euronav’s income is mainly expressed in USD, although some
operating costs are expressed in other currencies, especially
the Euro. This partial mismatch between operating income and
expenses could lead to fluctuations in Euronav’s net results.
Euronav is subject to risks inherent in conversion of
vessels into Floating, Storage and Offloading services
operation (FSO) units and the operation of its FSO activities
Euronav’s FSO activities are subject to various risks, including
delays, cost overruns, negligence of its employees, mechanical
defects in its machinery, collisions, severe damage to vessels,
damage to or loss of freight, piracy or strikes. In case of delays
in delivering FSO under service contract to its end-user,
contracts can be amended and/or cancelled. Moreover, the
operation of FSO vessels is subject to the inherent possibility of
maritime disasters such as oil spills and other environmental
accidents, and to the obligations arising from the ownership
and management of vessels in international trade. Euronav
has established sufficient current insurance against possible
accidents and environmental damage and pollution as
requested by relevant legislation and standard practices in the
sector. However, there is no guarantee that such insurance will
remain available at rates which are regarded as reasonable by
Euronav or that such insurance will remain sufficient to cover
all losses incurred or the cost of each compensation claim
made against Euronav, or that its insurance policies will cover
the loss of income resulting from a vessel becoming non-
operational. Should compensation claims be made against
Euronav, its vessels may be impounded or subject to other
judicial procedures.
Refinancing of loans may not always be possible
There is no assurance that Euronav will be able to repay or
refinance its facilities on acceptable terms or at all as they
become due upon their respective maturity dates. Financial
markets and debt markets are not always open independently
50 Corporate Governance Statement
of the situation of Euronav and the lack of debt finance may
adversely affect Euronav’s operations business and results
of operations.
Risks relating to the TI Pool and VLCC Chartering, the joint
ventures and associates may adversely affect Euronav’s
operations, business and results of operations
Although efforts are made to identify and manage the various
potential risks within Euronav in the same way, this is not
always possible or enforceable. In the case of the TI Pool and
VLCC Chartering, joint ventures and associates, differing
views from the other partner(s) may arise, as a result of
which, according to Euronav, specific treatment of the risks
may be limited or even prevented. The different approaches
to these risks may lead to consequences other than those
which Euronav would have incurred or would have wished
to incur, which may adversely affect Euronav’s operations,
business and results of operations.
Acts of piracy on ocean-going vessels could adversely
affect Euronav’s business
Acts of piracy have historically affected ocean-going vessels
trading in regions of the world such as the South China Sea,
the Gulf of Guinea and in the Gulf of Aden off the coast of
Somalia. Over the past few years, the frequency of piracy
incidents in the Gulf of Aden and in the Indian Ocean has
decreased significantly, whereas there has been an increase
in the South China Sea whilst the situation in the Gulf of
Guinea has now more or less stabilized. If these piracy
attacks occur in regions in which the Company’s vessels are
deployed being characterized by insurers as “enhanced risk”
areas, premiums payable for such coverage could increase
significantly and in extreme circumstances, such insurance
coverage may be more difficult to obtain. In addition, crew
costs, as well as costs which may be incurred to the extent the
Company employs on board security guards, could increase
in such circumstances. Detention as a result of an act of
piracy against the Company’s vessels, or an increase in cost,
or unavailability of insurance for the vessels, could have a
material adverse impact on the Company’s business, results
of operations, cash flows, financial condition and ability to pay
dividends. In response to piracy incidents, particularly in the
Gulf of Aden off the coast of Somalia and the wider western
Indian Ocean area and following consultation with regulatory
authorities, Euronav follows the latest version of BMP4
(Best Management Practices) which is a guide that has been
produced jointly by EUNAVFOR, the NATO Shipping Centre
and UKMTO (UK Maritime Trade Operations) in addition to
several maritime industry organizations or the Company may
even consider to station armed guards on some of its vessels.
Whilst use of armed guards has been proven to deter and
prevent the hijacking of the Company’s vessels, it may also
increase the risk of liability for death or injury to persons or
damage to personal effects and third party property, which
could adversely impact its business, results of operations,
cash flows, financial condition and ability to pay dividends.
6. INFORMATION TO BE INCLUDED
IN THE ANNUAL REPORT AS PER
ARTICLE 34 OF THE ROYAL DECREE
OF 14 NOVEMBER 2007
6.1 Capital structure
At the time of preparing this report the registered share capital
of Euronav amounts to USD 173,046,122.14 and is represented
by 159,208,949 shares without par value. The shares are in
registered or dematerialized form. Euronav currently holds
850,000 own shares.
At the time of preparing this report, no convertible bonds
or perpetual preferred equity instruments of the Company
were outstanding. Besides the stock option plans referred to
section 4.5 of this Corporate Governance Statement, there are
no other share plans, stock options or other rights to acquire
shares of the Company in place.
6.2 Restrictions on the exercise of voting rights or
on the transfer of securities
Each share entitles the holder to one vote. There are no
securities issued by the Company which would entitle the
holder to special voting rights or control. The articles of
association contain no restrictions on the voting rights, and
each shareholder can exercise his voting rights provided he
is validly admitted to the shareholders’ meeting and his rights
are not suspended. Pursuant to Article 12 of the articles of
association, the Company is entitled to suspend the exercise
of rights attached to shares belonging to several owners.
No person can vote at the shareholders’ meeting using voting
rights attached to shares for which the formalities to be
admitted to the General Meeting as laid down in Article 34 of
the articles of association or the law have not been fulfilled in
time or accurately. Likewise, there are no restrictions in the
articles of association or by law on the transfer of shares.
6.3 General shareholders’ meeting
The ordinary General Shareholders’ Meeting is held in
Antwerp on the second Thursday of the month of May, at 11
a.m., at the registered office or any other place mentioned in
the convening notices. If such date would be a bank holiday,
the Annual Shareholders’ Meeting would take place on the
preceding business day.
6.4 Agreements amongst shareholders or other
agreements
The Board of Directors is not aware of any agreements among
major shareholders or any other shareholders that may result
in restrictions on the transfer of securities or the exercise of
voting rights. The major shareholders have not entered into
a shareholders’ agreement or a voting agreement, nor do
they act in concert. There are no agreements between the
Company and its employees or Directors providing in any
compensation in case of resignation or dismissal on account
of public acquisition offer. Apart from the customary change
of control provision in the financing agreements and the long-
term incentive plans Euronav has entered into, there are no
other important agreements to which the Company is a party
and which enter into force, be amended or be terminated, in
case of a change of control of the Company following a public
offer.
the
6.5 Appointment and replacement of Directors
The articles of association (Article 17 and following) and
section III.2 of the Euronav Corporate Governance Charter
contain specific rules concerning
(re)appointment,
replacement and the evaluation of Directors. The General
Shareholders’ Meeting appoints the Board of Directors. The
Board of Directors submits the proposals for the appointment
or re-election of Directors - supported by a recommendation
of the Corporate Governance and Nomination Committee
- to the General Shareholders’ Meeting for approval. If a
Director’s mandate becomes vacant in the course of the
term for which the Director was appointed, the remaining
Board members may provisionally fill the vacancy until the
following General Shareholders’ Meeting, which will decide
on the final replacement. A Director nominated under such
circumstances is only appointed for the time required to
terminate the mandate of the Director whose place he has
taken. Appointments of Directors are made for a maximum
of four years. After the end of his/her term, each Director is
eligible for re-appointment.
6.6 Amendments to articles of association
The articles of association can be amended by the extraordinary
General Meeting in accordance with the Belgian Company
Code. Each amendment to the articles of association requires
a qualified majority of votes.
6.7 Authorization granted to the Board of Directors
to increase share capital
The articles of association (Article 5) contain specific rules
concerning the authorization to increase the share capital of
the Company. By decision of the Shareholders’ Meeting held
on 13 May 2015, the Board of Directors has been authorized
to increase the share capital of the Company in one or several
times by a total maximum amount of USD 150,000,000 during
a period of five years as from the date of publication of the
decision, subject to the terms and conditions to be determined
by the Board of Directors.
6.8 Authorization granted to the Board of Directors
to acquire or sell the Company’s own shares
The articles of association (Article 15 and 16) contain
specific rules concerning the authorization to acquire or sell
the Company’s own shares. Pursuant to a decision of the
extraordinary Shareholders’ Meeting of 24 February 2014
which has been adopted in accordance with the relevant legal
provisions, the Company has been authorized to acquire and
Corporate Governance Statement 51
sell the Company’s own shares or profit shares, without a
decision of the Shareholders’ Meeting being required, for a
period of three years as from the publication in the annexes
to the Belgian State Gazette of the aforementioned decision,
irrespective of whether these include the entitlement to vote,
by way of a purchase or an exchange, directly or through a
person acting in its own name but for the account of the
Company, if such acquisition is necessary to prevent imminent
and serious harm to the Company, including a public purchase
offer for the Company’s securities (Article 15 of the articles
of association). The Board of Directors can, in accordance
with the Belgian Company Code, without prior permission of
the Shareholders’ Meeting, to prevent imminent and serious
harm to the Company, including a public purchase offer for the
Company’s securities, sell acquired shares or profit shares of
the Company on the Stock Exchange or by way of an offer to
sell, addressed to all shareholders under the same conditions,
during a period of three years as from the publication in the
Annexes to the Belgian Official Gazette, of the decision, taken
by the General Meeting of 24 February 2014 (Article 16 of the
articles of association).
7. APPROPRIATION OF PROFITS
Under its new dividend policy for the group, Euronav intends
to distribute at least 80% of its annual net result (excluding
exceptional items such as gains on the disposal of vessels) for
future dividends. The yearly dividend is paid in two instalments:
first as an interim dividend then as a balance payment
corresponding to the final dividend. The interim dividend
payout ratio, which may typically be more conservative than
the yearly payout of at least 80% of net results, is announced
together with the half year results and is paid in September.
The final dividend is proposed by the Board of Directors (and
is subject to approval by the shareholders). It is announced in
March, together with the group full year results and is paid
after the approval of shareholders at the Annual Shareholders
Meeting which takes place the second Thursday of the month
of May and will be paid within the month of May.
8. CODE OF CONDUCT
The Board of Directors approved the Euronav Code of Business
Conduct and Ethics at its meeting of 9 December 2014. The
purpose of the Code of Business Conduct and Ethics is to
assist all the Euronav employees to enhance and protect the
good reputation of Euronav. The Code of Business Conduct and
Ethics articulates the policies and guidelines that highlight
the values of Euronav, more particularly in its relationship
with customers, shareholders and other stakeholders as well
as society in general. The full text of the Code of Business
Conduct and Ethics can be found on the Company’s website
www.euronav.com.
9. MEASURES REGARDING INSIDER
DEALING AND MARKET MANIPULATION
In accordance with Directive 2003/6/EC on insider dealing
and market manipulation (market abuse), at its meeting of 9
December 2014 the Board of Directors approved an updated
version of the Company’s Dealing Code and Policies and
Procedures to Detect and Prevent Insider Trading, also called
the “Dealing Code”. The Dealing Code includes restrictions on
trading in Euronav shares during so called “closed periods”,
which have been in application for the first time in 2006.
Directors and employees who intend to deal in Euronav shares
must first request clearance from the Compliance Officer.
Transactions that are to be disclosed in accordance with
the Royal Decree of 5 March 2006 are being disclosed at the
appropriate time.
10. GUBERNA
As Euronav strongly believes in the merits of corporate
governance principles and is keen on further developing its
corporate governance structure, Euronav joined Guberna
as
institutional member at the end of 2006. Guberna
(www.guberna.be) is a knowledge centre promoting corporate
governance in all its forms and offers a platform for the
exchange of experiences, knowledge and best practices.
11. GENDER DIVERSITY
In accordance with provision 2.1 of the Corporate Governance
Code, the Board of Directors must be composed in a manner
compliant with the principles of gender diversity as well as
of diversity in general. The Board of Directors of Euronav
currently consists of eight men and two women with varying
yet complementary knowledge bases and fields of experience.
The Board of Directors has been made aware of the law of
28 July 2011 on gender diversity and the recommendations
issued by the Corporate Governance and Nomination
Committee following the enacting of the law with regard to
the representation of women on boards of directors of listed
companies.
52 Corporate Governance Statement
12. APPROPRIATION ACCOUNTS
The result to be allocated for the financial year amounts
to USD 213,422,171.56. Together with the transfer of USD
244,713,944.79 from the previous financial year, this gives
a profit balance to be appropriated of: USD 458,136,116.35.
It will be proposed to the Annual Shareholders’ Meeting of
12 May 2016 to distribute a gross dividend in the amount of
USD 0.82 per share to all shareholders. The dividend will
be payable as from 26 May 2016. The share will trade ex-
dividend as from 17 May 2016 (record date 18 May 2016). The
dividend to holders of Euronav shares listed and tradeable
on Euronext Brussels will be paid in EUR at the USD/EUR
exchange rate of the record date.
Exceptionally this year, the Company paid a dividend in May
2015 out of the profits carried forward from prior years but
based on the strong cash flow made in the first quarter of
2015 and the strong market prospects at that time. The
calculation of the final dividend for the financial year 2015
was made taking into account our policy to return 80% of our
net profits to shareholders excluding exceptional items such
as gains on the disposal of vessels. The total gross dividend
paid in relation to 2015 of USD 1.69 per share is the sum of
the dividends paid in May and September 2015 in addition to
the proposed amount of USD 0.82 per share proposed to the
Annual Shareholders’ Meeting of 12 May 2016.
If this proposal is agreed upon, the allocation of profits will
be as follows:
• capital and reserves
• dividends
• carried forward
USD 10,671,108.58
USD 229,260,886.56
USD 218,204,121.21
15 March 2016
Board of Directors
Corporate Governance Statement 53
THE EURONAV GROUP
EURONAV SHIP MANAGEMENT SAS
EURONAV HONG KONG LTD
Euronav Ship Management SAS, with head office
in
Nantes in the South of Brittany, France and branch office
in Antwerp, Belgium, is besides the traditional shipping
activities, responsible for Euronav’s offshore projects and the
management of vessels for the offshore industry. That includes
tender projects, conversion works as well as performing the
management of these vessels including crewing, technical
procurement, accounting and quality. All vessels are registered
in Belgium, France or the Marshall Islands. That guarantees
high levels of quality, safety and reliability. The Nantes office
and the Antwerp office also provide crew management for
Euronav’s trading oil tankers.
EURONAV SHIP MANAGEMENT
(HELLAS) LTD
In November 2005 Euronav Ship Management (Hellas) Ltd was
established in Piraeus, Greece, as branch office. Euronav Ship
Management (Hellas) Ltd engages in the ship management
of the trading ocean-going oil tankers of Euronav and
the supervision of the construction of newbuildings. Ship
management
includes crewing, technical, procurement,
accounting, safety and quality assurance.
EURONAV (UK) AGENCIES LTD
Located in the heart of London, Euronav (UK) Agencies Ltd is
a commercial agency of the Euronav Group. Having a London
presence enables Euronav to work closely with the major
London-based clients and international brokering houses.
54 The Euronav Group
Euronav Hong Kong Ltd is the holding company of four wholly
owned subsidiaries and seven 50% joint venture companies.
The wholly owned subsidiaries that fall under Euronav Hong
Kong Ltd are Euronav Ship Management (Hellas) Ltd (see
short summary above), Euronav Singapore Pte. Ltd, Euronav
Luxembourg SA and Euro-Ocean Ship Management Ltd, a ship
management company that handles the crew management of
the FSO Asia and FSO Africa. TI Asia Ltd and TI Africa Ltd, 50%
joint venture companies with OSG, are the owners of respectively
the FSO Asia and FSO Africa, both currently employed at the
Al Shaheen field offshore Qatar. Fontvieille Shipholding Ltd,
Moneghetti Shipholding Ltd, Fiorano Shipholding Ltd and
Larvotto Shipholding Ltd, 50% joint venture companies with
Bretta Tankers Holding Inc., each own one Suezmax vessel. The
50% joint venture company Kingswood Co., Ltd fully owns Seven
Seas Shipping Ltd, which owns one VLCC flying Panamanian
flag. In October 2015 Euronav Hong Kong Ltd moved to a
new office: Room 2503-05 25th Floor Harcourt House, No. 39
Gloucester Road, Wanchai, Hong Kong.
GREAT HOPE ENTERPRISES LTD
Great Hope Enterprises Ltd is a 50% joint venture company
incorporated in Hong Kong which owned one VLCC, the
Ardenne Venture, which was delivered to its new owners in
January 2014.
EURONAV SHIPPING NV AND
EURONAV TANKERS NV
Following the acquisition of 15 VLCCs in January 2014, Euronav
Shipping NV and Euronav Tankers NV were incorporated as
subsidiaries of Euronav NV, in January and February 2014
respectively. Each of these companies own seven to eight
vessels and for each of these companies tonnage tax has been
applied for effective as of 1 January 2016.
CURRENT STRUCTURE
Euronav NV Belgium
100%
100%
100%
100%
100%
100%
50%
Euronav
Ship Management
SAS France
Euronav
Shipping NV
Belgium
Euronav
Tankers NV
Belgium
Euronav SAS
Euronav UK Ltd
France
United Kingdom
Euronav
Hong Kong Ltd
Hong Kong
Great Hope
Enterprises Ltd
Hongkong
100%
100%
50%
100%
100%
50%
50%
50%
50%
50%
50%
100%
Euronav Ship
Management
(Antwerp)
Branch Office
Belgium
Euronav Ship
Management
(Hellas) Ltd
Liberia
Kingswood
Marshall
Islands
Euronav
Singapore
Pte. Ltd
Euronav
Luxembourg
SA
Fontvieille
Shipholding
Ltd
Moneghetti
Shipholding
Ltd
Larvotto
Shipholding
Ltd
Fiorano
Shipholding
Ltd
TI Africa
Ltd
TI Asia
Ltd
Singapore
Luxembourg
Hongkong
Hongkong
Hongkong
Hongkong
Hongkong
Hongkong
E.S.M.C.
Euro-Ocean
Ship Manage-
ment Ltd
Cyprus
100%
100%
Euronav Ship
Management
(Hellas)
Branch Office
Greece
Seven Seas
Shipping Ltd
Marshall
Islands
The Euronav Group 55
PRODUCTS
AND SERVICES
FOR OUR CLIENTS
To operate in a manner that is intended to contribute to the
success of their business by setting increasingly higher
standards of quality and reliability.
TANKER SHIPPING
Euronav is a vertically integrated owner, operator and manager
able to provide complete shipping services in addition to the
carriage of crude oil on its fleet of modern large tankers. The
crude oil seaborne transportation market is cyclical and highly
volatile requiring flexible and proactive management of assets in
terms of fleet composition and employment. Euronav increases
exposure to the market through opportunistically entering the
market by chartering vessels from other owners and tonnage
providers whilst maintaining a core fleet of high quality owned
or controlled tonnage. On 24 March 2016 the Euronav core fleet
has a weighted average age of 7.7 years. Euronav operates its
fleet both on the spot and the period market. Most of Euronav’s
VLCCs are operated in the Tankers International (TI) Pool.
Euronav’s Suezmax fleet is partly fixed on long-term charter
while the other part is operated on the spot market by Euronav
directly.
VLCC fleet
The Tankers International (TI) Pool
Euronav’s entire owned VLCC fleet flies Belgian, Greek,
French, Marshall Islands or Panamanian flag. Euronav is a
founding member of the TI Pool, which commenced operation
in January 2000. The TI Pool was established by Euronav
and other leading tanker companies to meet the global
transportation requirements of international oil companies
and other major charterers. The TI Pool operates one of the
largest modern fleets available in the world. The Pool consisted
of 38 double hull VLCCs on 24 March 2016. By participating in
a Pool, Euronav and its customers benefit from the economies
of scale inherent to such an arrangement. Furthermore, the
TI Pool has been able to enhance vessel earnings by improved
utilization (increased proportion of laden days versus ballast
days) through use of combination voyages, contracts of
affreightment and other efficiencies facilitated by the size and
quality of its modern VLCC fleet. By operating together scores
of modern vessels, the TI Pool aims to have a modern high
quality VLCC available in the right place at the right time.
Average age profile of Euronav owned
VLCC and V-Plus (and TC-in)
43% 0-5 years old
37% 5-10 years old
20% 10-15 years old
56 Products and services
Products and services 57
Suezmax fleet
Euronav’s entire owned Suezmax fleet flies Greek or Belgian
flag. The use of a national flag together with operational and
maintenance standards in terms of age and performance,
which are higher than industry norm, enables Euronav
to employ part of its fleet on time charter. In order to
counterbalance the spot employment of its VLCC fleet, Euronav
chooses to employ a part of its Suezmax fleet on long-term
time charter. This strategy allows the Company to benefit from
a secure, steady and visible flow of income. Euronav owns and
employs 22 Suezmax vessels. Euronav’s Suezmax charterers
are leading oil majors, refiners and oil traders such as Valero,
Petrobras, Total and Repsol. On 24 March 2016 Euronav traded
16 Suezmax vessels on the spot market.
Average age profile of Euronav owned
Suezmax (and TC-in)
14% 0-5 years old
50% 5-10 years old
36% > 10 years old
Asia
i a
i
d East - A s
M
i
d
E
a
s
t
–
P
acific Rim
Europe
Mid East
M
i
d
E
a
s
t
West Africa
– Eu r
p e
o
M
Mid East – Europe
Mid East – U
f
ul
S G
W
e
s
t
A
f
r
i
c
a
-
A
s
i
a
Latam - Far East
Far East
US Gulf
U
S
G
ulf – A
sia
West
A
f
r
i
c
a
W
e
–
st Africa – US Gul f
Europe
L
a
t
a
E
u
r
o
p
e - F
a
r E
a
st
VLCC
Suezmax
Both VLCC and Suezmax
m - Far East
58 Products and services
FLOATING PRODUCTION, STORAGE
AND OFFLOADING/FLOATING STORAGE
AND OFFLOADING (FPSO/FSO)
The cost of a converted FSO ranges from USD 30 million to USD
200 million, depending on the size, field location, mooring and
design life. A newbuild FSO can range from USD 100 million to
USD 300 million.
For areas without pipeline infrastructure and where the
production platform has no storage capabilities (fixed platform,
MOPU, Spar, TLP, Semi), FSOs are perfect because of their
very large storage capacity and ability to be moored in almost
any water depth. They have no process topsides, which makes
them relatively simple to convert from existing tankers, as
compared to an FPSO. FSOs can be relocated to other fields
and some have also been converted to FPSOs. Furthermore,
there is an established market for leasing FSOs, which can help
commercialize marginal or remote fields. The FSO system is
now one of the most commercially viable concepts for remote or
deep-water oil field developments.
The offshore industry is a highly technical one with many risk
factors but with an equally high reward. Each offshore unit is
unique because of the additional engineering and logistical
requirements
installing and
operating facilities in the remote offshore environment as
opposed to onshore production or storage plants. Each unit is
specifically designed for the field’s geological and environmental
characteristics.
in designing,
transporting,
FSOs provide field storage (ranging from 60,000 to three million
barrels) and offloading in a variety of situations. Most of them
store oil although there are a few LPG or LNG FSOs.
Approximately 45% of FSOs in service are positioned in
Southeast Asia and another 20% are in West Africa. The others
are mainly spread over the Middle East, India, Northern Europe,
the Mediterranean and Brazil.
Euronav’s initial exposure to those markets was with VLCC
deployments in the Gulf and in West Africa back in 1998. The
Maersk Oil Qatar (MOQ) project (cf. below) was engaged in
because of the specific assets that Euronav owned: two of the
only four V-Plus vessels (also known as ULCCs – Ultra Large
Crude Carriers) that exist in the world, the TI Asia (which
belonged to Euronav) and the TI Africa (which belonged to OSG).
The TI Europe (fully owned by Euronav) is one of the only two
remaining unconverted V-Plus vessels worldwide. The Company
strongly believes that the long-term employment of this not
yet converted unit lies in the offshore market. Most of the new
oil field discoveries are done offshore and many of them are
gigantic oil fields (Brazil, West Africa, Australia) which should
require very large FSOs. Euronav therefore believes there will be
a demand for this unit by offshore field operators.
By engaging in the MOQ project, Euronav re-entered the
offshore market. MOQ awarded two contracts for the provision
of FSO services on the Al Shaheen oil field offshore Qatar where
both converted V-Plus vessels are currently operating through a
50% joint venture with OSG. Both FSOs are managed in-house
by Euronav.
Products and services 59
SHIP MANAGEMENT
Fleet management is conducted by three wholly-owned
subsidiaries: Euronav Ship Management SAS, Euronav SAS
and Euronav Ship Management (Hellas) Ltd. In 2015 Euronav
also established a Singapore office to enhance the support
services offered to the vessels that frequently call Asian ports.
The skills of its seagoing officers and crew and its shore-based
staff, including experienced captains and marine engineers,
give Euronav a competitive edge in high quality, maintenance
and operation of vessels, as well as project development
and execution. Euronav manages in-house a fleet of modern
double hull crude oil carriers ranging from Suezmax to Very
Large and V-Plus and FSO. Euronav’s fleet trades worldwide in
some of the most difficult weather conditions and sea states,
to ports and for charterers with the strictest requirements.
The vessels and crews are in constant interaction with the
shore staff through regular onboard visits, briefing and
debriefing discussions, sophisticated communication means
and conferences ashore and onboard or in-house training
sessions. Superintendents, internal and external auditors,
customers, as well as national and international regulatory
bodies assess vessel and crew performance. Euronav has
excellent relations with all oil majors. The organization, as
well as the vessels, has successfully passed numerous oil
major vetting assessments.
All services are provided with the ultimate regard for the
health, safety, security, environmental and quality standards
applicable to the maritime transportation industry as a primary
concern. Euronav is committed to continuous enhancement
of the safety, security and quality of the fleet’s operation and
employment as well as to the protection of the environment.
Euronav is devoted to a teamwork culture where people
work together for the overall success of the Company, onshore
and at sea.
60 Ship management
Euronav practices genuine performance planning and
appraisal, training and development, and promotion from
within. Its policies aim to enhance and reward performance,
engage its people and retain key talent.
Euronav maintains an integrated ship management approach
with the following qualities:
• proven experience in managing oil tankers;
• experienced officers and crews with professional credentials;
• professional relations based on merit and trust;
• commitment to improving the quality of working life at sea;
• safety and quality assurance including training, auditing
and vetting;
• modern and effective computer-based management and
training systems;
• human resources policies where people work together for
common goals;
• hands-on technical management backed by the latest
software platforms and communication systems;
• experience in long-term asset protection and upgrade;
• open communication and transparency in reporting.
FULL RANGE OF SERVICES
The Euronav Group provides a full range of ship management
services:
• full technical services;
• fleet personnel management of experienced officers and crew;
• comprehensive health, safety, quality and environmental
protection management system;
• insurance and claims handling;
“
IN 2015 EURONAV ESTABLISHED A
SINGAPORE OFFICE TO ENHANCE THE
SUPPORT SERVICES OFFERED TO THE
VESSELS THAT FREQUENTLY CALL
ASIAN PORTS. “
• global sourcing of bunkering, equipment and services for
optimum synergies, pricing and quality;
• financial, information technology, human resources and
legal services to improve performance of the Group’s
human, financial and information assets;
• project management for:
о newbuilding supervision, including pre- and post-
contract consultancy and technical support;
о FSO conversions;
о upgrade of assets for improved operational efficiency;
• commercial management;
• operational management.
Euronav utilizes a set of clearly defined Key Performance
Indicators (KPIs) as well as standardized inspection reports
which are thoroughly evaluated to facilitate the measurement
of performance such as:
• vessel reliability;
• crew and shore staff retention and wellbeing;
• safety and environmental performance;
• vessel energy efficiency;
• vetting and port state controls;
• planned and condition-based maintenance;
• dry-docking planning and repairs based on work list from
dry-dock to dry-dock.
Quarterly management review meetings and regular
management coordination meetings monitor the trend and set
the course of actions.
Ship management 61
FLEET OF THE EURONAV GROUP
AS PER 31 DECEMBER 2015
OWNED VLCC AND V-PLUS
NAME
Alex1
Alice2
Alsace
TBN Anne3
Antigone
Artois
Famenne4
Flandre
Hakata5
Hakone5
Hirado5
Hojo
Ilma
Ingrid
Iris
Nautic
Nautilus
Navarin
Nectar
Neptun
Newton
Noble
Nucleus
Sandra
Sara5
Simone
Sonia
TI Europe
TI Hellas5
TI Topaz
V.K. Eddie5
OWNED
BUILT
100%
100%
100%
TBO
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
2016
2016
2012
2016
2015
2001
2001
2004
2010
2010
2011
2013
2012
2012
2012
2008
2006
2007
2008
2007
2009
2008
2007
2011
2011
2012
2012
2002
2005
2002
2005
62 Fleet of the Euronav Group
DWT
299,445
299,320
320,350
300,000
299,421
298,330
298,412
305,688
302,550
302,624
302,550
302,965
314,000
314,000
314,000
307,284
307,284
307,284
307,284
307,284
307,284
307,284
307,284
323,527
323,183
313,988
314,000
441,561
319,254
319,430
305,261
DRAFT
FLAG
LENGTH (M)
SHIPYARD
21.60
21.60
22.50
21.60
21.60
21.13
21.13
22.42
21.03
21.03
21.03
21.64
22.37
22.38
22.37
22.72
22.72
22.72
22.72
22.72
22.30
22.72
22.72
21.32
22.62
22.10
22.10
24.53
22.52
22.52
22.42
Belgian
Belgian
Greek
French
Greek
French
French
French
French
Greek
Greek
Belgian
Belgian
Belgian
Belgian
Marsh I
Marsh I
Marsh I
Marsh I
Marsh I
Belgian
Belgian
Marsh I
French
French
Belgian
Belgian
Belgian
Belgian
Belgian
Panama
333.00
333.00
330.00
333.00
333.00
333.00
332.94
332.00
333.00
333.00
333.00
330.00
319.03
319.03
333.14
321.67
321.70
321.65
321.60
321.70
321.66
321.67
321.64
319.57
319.57
319.57
319.57
380.00
332.99
332.99
332.00
Hyundai H.I.
Hyundai H.I.
Samsung H.I.
Hyundai H.I.
Hyundai H.I.
Hitachi Zosen
Hitachi Zosen
Daewoo H.I.
Universal
Universal
Universal
Japan Marine United
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
STX O&S
STX O&S
STX O&S
STX O&S
Daewoo H.I.
Hyundai H.I.
Hyundai H.I.
Daewoo H.I.
OWNED FSO (FLOATING, STORAGE AND OFFLOADING)
NAME
FSO Africa
FSO Asia
OWNED
50%
50%
BUILT
2002
2002
DWT
442,000
442,000
DRAFT
24.53
24.53
FLAG
Marsh I
Marsh I
LENGTH (M)
380.00
380.00
SHIPYARD
Daewoo H.I.
Daewoo H.I.
TC Out = time chartered out
Marsh I = Marshall Islands
TBN = to be named
TBO = to be owned
1 Vessel delivered to Euronav on 24 March 2016.
2 Vessel delivered to Euronav on 26 January 2016.
3 Vessel scheduled to be delivered to Euronav in May 2016.
4 Vessel sold on 15 January 2016 and delivered to its new owners on 9 March 2016.
5 In 2015 the Hakata, the Hakone, the Hirado, the Sara, the TI Hellas and the V.K. Eddie have been in dry-dock
and underwent a special survey (standard procedure for ships every 5 years). The Hakone in Ras Laffan,
Qatar (October), the Hirado in Dubai, United Arab Emirates (December), the Sara in Singapore (December),
the TI Hellas in Singapore (May) and the V.K. Eddie in Zhousan, China (April).
Fleet of the Euronav Group 63
64 Fleet of the Euronav Group
OWNED SUEZMAX
NAME
Cap Charles
Cap Diamant
Cap Felix
Cap Georges6
Cap Guillaume
Cap Jean6
Cap Lara
Cap Leon
Cap Philippe
Cap Pierre
Cap Romuald6
Cap Theodora
Cap Victor
Capt. Michael
Devon6
Eugenie
Felicity
Filikon
Finesse
Fraternity
Maria
OWNED
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
100%
100%
100%
100%
50%
BUILT
2006
2001
2008
1998
2006
1998
2007
2003
2006
2004
1998
2008
2007
2012
2011
2010
2009
2002
2003
2009
2012
DWT
158,881
160,044
158,765
146,652
158,889
146,627
158,826
159,049
158,920
159,083
146,640
158,819
158,853
157,648
157,642
157,672
157,667
149,989
149,994
157,714
157,523
DRAFT
17.00
15.62
17.02
17.00
17.00
16.12
17.00
17.02
17.00
17.02
16.12
17.00
17.00
17.00
17.02
17.02
17.02
15.95
15.95
17.02
17.00
FLAG
Greek
Greek
Belgian
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Belgian
Greek
Greek
Belgian
Greek
LENGTH (M)
274.00
277.32
274.00
274.06
274.00
274.06
274.00
274.29
274.00
274.29
274.06
274.00
274.00
274.82
274.82
274.00
274.00
274.20
247.20
274.20
274.82
SHIPYARD
Samsung H.I.
Hyundai H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Samsung H.I.
Universal
Universal
Samsung H.I.
Samsung H.I.
6 In 2015 the Cap Georges, the Cap Jean, the Cap Romuald and the Devon were dry-docked and underwent a special survey (standard procedure for
ships every five years): the Cap Georges, the Cap Jean and the Cap Romuald in Setubal, Portugal in July, September and December respectively and
the Devon in Ras Laffan, Qatar (October).
SUEZMAX VESSELS SOLD IN THE COURSE OF 2015
NAME
Cap Laurent7,8
OWNED
100%
BUILT
1998
DWT
146,645
DRAFT
16.12
FLAG
Greek
LENGTH (M)
274.06
SHIPYARD
Samsung H.I.
7 Vessel delivered to its new owners on 26 November 2015.
8 In 2015 the Cap Laurent was dry-docked and underwent a special survey in Singapore (July).
TIME CHARTERED IN VLCC
NAME
KHK Vision
INTEREST
100%
BUILT
2007
DWT
305,749
DRAFT
22.40
FLAG
Singapore
LENGTH (M)
332.00
SHIPYARD
Daewoo H.I.
TIME CHARTERED IN SUEZMAX
NAME
Suez Hans
INTEREST
100%
BUILT
2011
DWT
158,574
DRAFT
17.17
FLAG
Marsh I
LENGTH (M)
274.33
SHIPYARD
Hyundai H.I.
Fleet of the Euronav Group 65
CORPORATE SOCIAL RESPONSIBILITY -
HEALTH, SAFETY, QUALITY, ENVIRONMENT
AND SOCIETY
FOR OUR SOCIETY
HEALTH
To transport an essential source of energy in a manner that
is economically, socially and environmentally viable now and
in the future.
Corporate Social Responsibility
At Euronav we define Corporate Social Responsibility (CSR)
as responsible citizenship within the environment and
communities in which we operate. We do this by continuously
improving waste and pollution reducing processes, replacing
obsolete assets to maintain a modern fleet (ship recycling)
and actively contributing to environmental, educational and
social programs, including philanthropy and volunteering.
Moreover, we consider our Health, Safety, Quality and
Environment (HSQE) standards as part of the Company’s wider
CSR policy. The Company’s mission, vision, its Corporate
Governance Charter, Code of Conduct, Compliance Officer
and policies all underpin the Company’s strong commitment
to responsible business and to CSR. We believe that all these
factors have enabled us to retain the trust and support of our
customers, shareholders, employees and the communities in
which we operate.
The health of Euronav personnel both on board and ashore is a
very important aspect of the Company’s management system.
The working environment is regularly monitored for proper
health conditions. Health standards and guidelines of Euronav
highlight important issues such as general living conditions,
physical exercise and storage of food and nutritional practices.
Health awareness
Targeted for seafarers, the health awareness focuses on three
main elements:
• fitness: providing necessary equipment on board;
• healthy food: giving healthy food preparation tips and
menus;
• food safety: realizing the importance of the receipt and
handling of provisions (personal hygiene in the galley and
the cleaning and disinfection of the aliments).
Drug and alcohol policy
Euronav is fully committed to maintaining a safe and healthy
working environment.
Illegal possession, consumption,
distribution or sale of drugs or alcohol by any shipboard
personnel shall lead to instant dismissal and will expose the
person to legal proceedings.
66 Corporate Social Responsibility
SAFETY
Euronav is committed to operating in accordance with the
highest standards of safety in the marine transportation
industry and employs experienced crew to ensure that its
vessels are operated in a safe and environmentally sound
manner. By promoting an active safety culture among its
personnel, both ashore and on board, Euronav is committed
not only to providing a quality service to their clients,
but especially to ensuring consistent protection of the
environment and working conditions. Focusing on safety also
means making sure the crew is qualified, regularly trained,
informed of current issues and looked after as far as their
health is concerned.
Fleet
The Euronav fleet has been built in the world’s established
shipyards and the vessels built for Euronav are constructed in
accordance with Euronav’s own specifications, which in many
cases exceed the requirements of the international regulatory
agencies.
Management of emergencies
The main potential risk for the environment related to the
transport of crude oil is the accidental release of cargo into
the sea due to breaching the vessel’s containment, as a result
of grounding, collision etc. Hence, why the focus on safety of
transportation is paramount in our organization. To deal with
possible emergencies, the following procedures have been put
into place:
• Emergency and Contingency Manual (ECM) dealing with all
possible emergencies other than oil pollution;
• Ship Oil Pollution Emergency Plan (SOPEP) dealing with oil
pollution emergencies and the response thereto;
• Vessel Response Plan (VRP) dealing with oil pollution
emergencies and the response thereto in U.S. waters (as
required by U.S. law – Oil Pollution Act 1990);
• California Contingency Plan (CCP) dealing with oil pollution
emergencies and the response in Californian waters;
• Standard Table Top Exercises (TTX) which are emergency
drills including officers, vessel staff and external participants
such as qualified individual or salvage and fire experts;
• Quarterly Tailor made Table Top Exercise (TTX) with the
participation of vessels and shore management;
• Weekly emergency drills on board covering various
scenarios.
QUALITY
By focusing on quality, Euronav arranges for its employees to
receive a level of care and training designed to deliver the best
service to its clients, whilst striving to have the less possible
negative impact on the environment. One way of delivering
the best quality is setting measurable annual objectives and
key performance indicators and regularly monitoring the
actual performance against these. Regular communication
and feedback exchange with the clients, as well as prompt
response to their requests is a key parameter for ensuring the
quality of our services.
Corporate Social Responsibility 67
ISM compliance
Euronav has developed a Health, Safety, Quality and
Environmental Maritime Management System which integrates
health, safety, environment and quality management into one
seamless system that fully complies with the ISM Code for the
“Safe Operation of Ships and Pollution Prevention”.
Certificates
Euronav Ship Management SAS renewed its ISM Document of
Compliance (“DOC”) from the Belgian Maritime Inspectorate
for Belgian flag vessels on 24 July 2015, as well as from Bureau
Veritas on behalf of the Marshall Islands Flag Administration
on 8 October 2015. The Certification for Quality Management
Systems (ISO 9001:2008 (RvA)) was renewed while the
Certification for Environmental Management Systems (ISO
14001:2004 (UKAS)) and the Certification for Occupational,
Health and Safety Management Systems (OHSAS 18001
(UKAS)) were maintained.
Euronav Ship Management (Hellas) Ltd has maintained its
DOC from the American Bureau of Shipping on behalf of Greek
and Marshall Islands Flag Administration, as well as from the
Belgian Maritime Inspectorate for the Belgian flag vessels
and from the French Flag Administration for the French flag
vessels. The ISO 9001:2008 (RvA) as well as 14001:2004 (RvA)
certifications obtained by the American Bureau of Shipping,
were renewed in 2014.
Quality shipping for the 21st century
In their efforts to eliminate substandard shipping, U.S. Coast
Guard has primarily focused on improved methods to identify
poor and high quality vessels and to enforce compliance
with international and U.S. standards. QUALSHIP 21 is a
Marine Safety Initiative implemented by the Coast Guard on
1 January 2001 to identify high quality foreign-flagged ships
and to provide incentives to encourage quality operations.
High quality ships are recognized and rewarded for their
commitment to safety and quality.
In 2015 all vessels operated within Euronav were eligible for
QUALSHIP 21 and Euronav was proud to see the following 19 of
its vessels awarded with QUALSHIP 21: Cap Philippe, Eugenie,
Alsace, Devon, Famenne, Filikon, Finesse, Cap Laurent, Cap
Leon, Maria, Captain Michael, Cap Theodora, Cap Charles, Cap
Guillaume, Cap Lara, Cap Romuald, Cap Victor, Cap Diamant,
and Cap Georges.
Indicatively, the eligibility criteria for rewarding non-U.S.
flagged quality ships are:
• no substandard vessel detentions in the U.S. within the
previous 36 months;
• no marine violations or serious marine casualties and
no more than one ticket in the U.S. within the previous 36
months;
68 Corporate Social Responsibility
• successful U.S. Port State Control (PSC) Safety Exam
within the previous 12 months;
• not owned or operated by any company that has been
associated with any PSC detention in U.S. waters within
the previous 24 months;
• not certified by a targeted organization (targeted recognized
organizations are any that have points assigned in the U.S.
Port State Control Matrix);
• not registered with a Flag State that has a detention ratio
greater than 1.0% and the vessel’s Flag State must have
at least ten distinct arrivals in each of the previous three
years.
Training
Euronav has built a comprehensive system of continuous
training programs and seminars both on board and ashore
which ensures a constant awareness among all personnel
in their day-to-day operational duties. Training activities are
carried out in a classroom or online through a computer-
based program.
ENVIRONMENT
The Company believes that pollution prevention on board a
ship is a first priority and aims at environmental excellence. In
order to accomplish this, key personnel, corporate and contract
personnel must clearly adhere to the complete contents
of our internal Health, Safety, Quality and Environmental
Protection Management System that was developed based on
international and industry standards.
implements
initiatives regarding
During quarterly management review meetings, management
reassesses and
the
Company’s environmental performance. Euronav also actively
participates in several industry associations (Intertanko,
Helmepa, Namepa, TSCF, Oil Majors and Industry Conferences
and Classification Societies Committees) which promote
safe and environmentally sound ship design and operations.
Through its membership with the Intertanko Safety, Technical
and Environmental Committee, the Company has promoted
the concept of benchmarking on environmental performance
within the shipping industry. Euronav is ISO 14001 certified for
environmental protection.
Handling of emissions to the atmosphere
World trade and ship numbers have seen a steady increase
over recent years, but in parallel there have been economies
of scale with larger, more efficient ships. On a per unit
basis, emissions both of harmful substances, pollutants and
greenhouse gases from ships have been reduced, allowing
shipping to assert it is the most environmentally friendly and
the most energy efficient transport mode. Even if shipping will
never replace all the other transport modes, more shipping
is part of the solution to the challenges of air emissions and
global warming which the world faces today.
“
AT EURONAV WE DEFINE CORPORATE
SOCIAL RESPONSIBILITY AS
RESPONSIBLE CITIZENSHIP WITHIN
THE ENVIRONMENT AND COMMUNITIES
IN WHICH WE OPERATE.
“
Corporate Social Responsibility 69
Euronav’s dedication to the reduction of emissions
demonstrated by:
is
• the setup of a Fleet Energy Management team, i.e. dedicated
resources with the sole objective to plan and implement
measures to reduce emissions and fuel consumption;
• the development of an effective policy on reduction of
harmful emissions to air;
• the development of an advanced performance management
system;
• not burning plastics on board the vessels but delivering
them ashore;
• the participation of Euronav vessels in the performance
of lightering operations in the Delaware River with cargo
vapor emission control.
Euronav takes a systematic approach towards monitoring the
fuel efficiency and evaluating potential improvements in order
to reduce the fuel oil consumption and CO2 emissions. Energy
efficiency measures include:
• installation of devices that improve propulsion efficiency
(e.g. Mewis duct);
• installation of electric heaters
for minimizing
fuel
consumption when the vessel is idle or slow steaming;
• painting vessels with modern anti-fouling paint which
improves propulsion efficiency, carbon emissions, as well
as reducing the toxic effect of the paint on marine life;
• hull and propeller cleaning based on observation;
• slow steaming as part of voyage optimization;
• hardware and software installation for close monitoring of
a vessel’s speed and consumption performance.
Handling of waste
During normal vessels’ operations, Euronav tries to reduce
vessels’ waste to a maximum by:
• reducing the plastic packaging on board to a strict minimum;
• recycling packing material;
• compacting rubbish prior to discharging;
• keeping on board cargo residues and delivering ashore at
proper reception facilities;
• participating in the International Maritime Organisation
(IMO) initiatives to improve the port reception facilities
by reporting any deficiencies by using the IMO relevant
questionnaire;
• sewage treatment plants on board handling the black
and grey waters in order to minimize the impact on the
environment.
70 Corporate Social Responsibility
Further initiatives
The safety of human life and the protection of the environment
are primary concerns to Euronav. Euronav is committed
to the implementation of the following safety, quality and
environmental objectives:
• provide a safe working environment ashore and afloat by
encouraging all employees to identify potentially unsafe
conditions or practices and to undertake corrective
measures;
• cooperate with maritime organizations and government,
industry associations to achieve highest
trade and
standards of safety and preservation of the environment;
• protect and preserve resources, preventing pollution by an
environmentally conscious operation of vessels;
• introduction of efficient fuel saving measures;
• continuously
improve safety management skills of
personnel ashore and on board ships, including preparing
for emergencies related both to safety and environmental
protection;
• continuously improve all processes by reviewing the
available information against stated policies and objectives,
evaluating audit results, and analyzing available records of
corrective and preventive actions.
Ship recycling
Although our fleet is young, vessel recycling is an important
matter on which Euronav is actively working. The green
passport is a significant item of the recycling policy and is a
document that follows the entire life of a vessel, beginning
with its construction. This document needs to be updated
on a regular basis by all different parties involved during
the life cycle of a vessel. It contains information such as
ship particulars, details on the construction yard but, most
importantly, information about every product used during
the construction and operation of the vessel. Because of the
importance of the green passport within the recycling policy,
all Euronav’s newbuildings are carrying a green passport,
namely: Cap Theodora, Cap Philippe, Cap Guillaume, Cap
Charles, Cap Victor, Cap Lara, Cap Felix, Felicity, Fraternity,
Eugenie, Devon, Maria, Captain Michael and Alsace.
SOCIETY
Community involvement
Euronav wants to impact positively on the communities where
we live and work. We do this by building relationships and
inspiring philanthropy and goodwill both inside and outside
the Company. We actively encourage staff to engage in
community initiatives and support employee involvement, be
it volunteering, fundraising or donations through options such
as fund-matching or sponsoring specific events.
Benefit for children 2015
The Valero Texas Open Benefit for Children Golf Classic which
has been running since 2002 is a project of the Valero Energy
Corporation raising money for children’s charities in the
communities where Valero has major operations. The 2015
Valero Texas Open Benefit for Children Golf Classic and the
Valero Texas Open contributed USD 10.4 million to children.
As for previous years, Euronav specifically requested for its
donation to be oriented towards children’s charities based in
Quebec where a large number of our vessels trade.
Centraide
On the occasion of the inauguration of its new administrative
building in 2012, Valero fixed a wall plaque in the entrance
hall displaying the names of its major business partners. In
return for a donation, Euronav’s name was included on this
plaque, among other companies, for a period of three years.
The totality of these donations is used to support Centraide
Québec. Centraide is an organization that raises money
and invests it locally to break the cycle of poverty and social
exclusion with the ultimate goal of improving quality of life.
The Ocean Cleanup
Rather than sending a traditional season’s greetings card,
Euronav has sent an electronic card to all sea staff and
associates. The amount otherwise allocated to cards and
postage was donated to the Ocean Cleanup. The Ocean Cleanup
develops technologies to extract, prevent and intercept oceanic
plastic pollution to protect wildlife and wildlife habitat.
EDUCATION
School and training program
Euronav Ship Management (Hellas) Ltd is participating in
the Internship programs of Greek Universities, focusing in
Marine studies, by offering their students the opportunity to
work in shipping companies for a couple of months, usually
during the summer. The Company has also been sponsoring
distinguished graduates of these schools.
Euronav Ship Management (Hellas) Ltd has been partly
subsidizing the educational visits of students of the Nautical
Academies of Chios and Macedonia to engine makers’
premises in Germany and Italy.
Corporate Social Responsibility 71
HUMAN RESOURCES
FOR OUR EMPLOYEES
To inspire and enable talented, hard-working people to achieve
their career goals in a healthy, challenging and rewarding
environment.
One cornerstone of the Euronav mission is dedicated to our
people: to inspire and enable talented, hard-working people
to achieve their career goals in a healthy, challenging and
rewarding environment. Throughout its shore-based offices
in London, Nantes, Antwerp, Singapore and Piraeus, Euronav
has approximately 147 employees. This geographic span
across Europe reflects a deep-rooted maritime history and
culture built up over generations. About 2,700 seafarers of
many different nationalities work aboard Euronav vessels.
In an environment where there is a shortening supply of
competent seafarers, Euronav has qualified and experienced
masters to man all the vessels. Masters’ conferences and
crew conferences are held regularly. Euronav is devoted to
a teamwork culture and an environment where people work
together for the overall success of the Company, on shore
and at sea. Euronav practices genuine performance planning
and appraisal, training and development and promotion from
within. Our policies aim to enhance and reward performance,
engage our people and retain key talent. We celebrate the
diversity in our workforce. Many of our employees and officers
have a wealth of long service and experience in the business
while others are new entrants with fresh perspectives.
This commitment and stability enriched with diversity have
enabled us to achieve excellent results in an extremely
competitive industry. Euronav people bring to the job a rich
diversity of educational and professional qualifications,
including professionals with engineering, finance, business
administration, legal and humanities backgrounds, who
have specialized in tanker operations, crewing, marine and
technical areas and shipping corporate services. Virtually
everyone speaks at least two languages fluently and half the
staff speaks three or more languages.
72 Human Resources
Total officers and apprentices on board = 557
1 Serbia
3 Poland
30 Romania
4 Russia
3 Colombia
1 Pakistan
1 Netherlands
1 Morocco
19 Belgium
100 Philippines
77 Bulgaria
4 Canada
1 Cyprus
36 France
40 Panama
39 Indonesia
49 Croatia
122 Greece
Total ratings on board = 639
115 El Salvador
1 Greece
1 Chili
19 Romania
344 Philippines
137 Honduras
20 Indonesia
2 Peru
25 Ukraine1 Turkey Our Culture
Euronav is an integrated shipping services provider with
high quality standards and ambitious goals. To empower
its people to meet these challenges, Euronav’s identity is
characterized by:
• common culture with local authority to act;
• high involvement and flexibility in which much of the work is
carried out by cross-functional, cross-branch, self-directed
work teams;
• clarity in roles, expectations and authorities;
• professional growth and development opportunities aligned
with business needs;
• quality and professionalism in matters large and small;
• communication and a no-blame culture cultivated by example.
We encourage corporate social responsibility and have values
of fairness and responsibility embedded in our operating
ethos. We are an equal opportunity employer; people are
selected, rewarded and advanced based on performance and
merit. We strive to fully comply with law and regulations in
the markets in which we operate. Euronav strives to be an
exemplary employer among its peers and participates in
forums for an open exchange of best practices.
Accomplishments in 2015
In 2015 the human resources department has invested a great
deal of work in the following areas:
• staff changes: HR has been actively involved in the selection,
recruitment and induction of staff due to the need for
additional resources following the fleet growth;
• performance appraisals: the annual performance review
which took place in November/December using a newly
developed online process;
• training: the human resources department partnered with all
departments to help define, develop and deliver customized
training solutions. As part of the performance process,
individual training plans were developed for each staff
member across the group as guidance for the whole year;
• further development on internal Eurostaff software for
reporting purposes and audit requirements;
• maritime HR forum: active participation to the forum of
which Euronav is a founding member;
• All Hands event: the ninth edition of this teambuilding event
took place in Greece and was attended by 141 employees.
Human Resources 73
GLOSSARY
Aframax – A medium-sized crude oil tanker of approximately
80,000 to 120,000 deadweight tons. Aframaxes can generally
transport from 500,000 to 800,000 barrels of crude oil and
are also used in lightering. A coated Aframax operating in the
refined petroleum products trades may be referred to as an
LR2.
Commercial Management or Commercially Managed –
The management of the employment, or chartering, of a vessel
and associated functions, including seeking and negotiating
employment for vessels, billing and collecting revenues,
issuing voyage instructions, purchasing fuel and appointing
port agents.
Ballast – Seawater taken into a vessel’s tanks in order to
increase draft, to change trim or to improve stability. Ballast
can be taken into cargo tanks, double bottoms, fore and aft
peak tanks and/or segregated ballast tanks (SBT). All Euronav
vessels are equipped with segregated ballast tanks.
Bareboat Charter – A Charter under which a customer pays a
fixed daily or monthly rate for a fixed period of time for use of
the vessel. The customer pays all costs of operating the vessel,
including voyage and vessel expenses. Bareboat charters are
usually long term.
Barrel – A volumetric unit of measurement equal to 42 U.S.
gallons or 158.99 liter. There are 6.2898 barrels in one cubic
meter. Note that while oil tankers do not carry oil in barrels
(although ships once did in the 19th century), the term is still
used to define the volume.
BITR – Baltic Index Tanker Routes. The Baltic Exchange is
a source of independent, freight market data. Information
collected from a number of major shipbrokers around
the world is collated and published daily. The Exchange
publishes the following daily indices: the Baltic Panamax
Index, the Baltic Capesize Index, the Baltic Handymax Index
and the Baltic International Tanker Routes — clean and dirty.
The Exchange also publishes a daily fixture list.
Bulk cargo – Bulk cargo is commodity cargo that is transported
unpackaged in large quantities. The containment for this type
of cargo is the tanks of the ship.
Contango – Is a term used in the futures market to describe
an upward sloping forward curve. Such a forward curve is said
to be “in contango”. Formally, it is the situation where and the
amount by which, the price of a commodity for future delivery
is higher than the spot price, or a far future delivery price
higher than a nearer future delivery. The opposite market
condition to contango is known as backwardation.
Contract of Affreightment or COA – An agreement providing
for the transportation between specified points for a specific
quantity of cargo over a specific time period but without
designating specific vessels or voyage schedules, thereby
allowing flexibility in scheduling since no vessel designation
is required. COAs can either have a fixed rate or a market-
related rate.
Crude oil – Oil in its natural state that has not been refined
or altered.
Deadweight – Deadweight Tonnage (dwt) – The lifting or
carrying capacity of a ship when fully loaded. This measure
is expressed in metric tons when the ship is in salt water and
loaded to her marks. It includes cargo, bunkers, water, stores,
passengers and crew.
Demurrage – Additional revenue paid to the ship owner on
its Voyage Charters for delays experienced in loading and/or
unloading cargo that are not deemed to be the responsibility of
the ship owner, calculated in accordance with specific Charter
terms.
Charter – Contract entered into with a customer for the use
of the vessel for a specific voyage at a specific rate per unit
of cargo (Voyage Charter), or for a specific period of time at
a specific rate per unit (day or month) of time (Time Charter).
Double hull – A design of tanker with double sides and a
double bottom. The spaces created between the double sides
and bottom are used for ballast and provide a protective
distance between the cargo tanks and the outside world.
Charterer – The company or person to whom the use of the
vessel is granted for the transportation of cargo or passengers
for a specified time.
Classification Societies – Organizations
that establish
and administer standards for the design, construction and
operational maintenance of vessels. Vessels cannot trade
unless they meet these standards.
Draft – The vertical distance measured from the lowest point
of a ship’s hull to the water surface. Draft marks are cut into
or welded onto the surface of a ship’s plating. They are placed
forward and aft on both sides of the hull and also amidships.
The Plimsoll lines which designate maximum drafts allowed
for vessels under various conditions are also found amidships.
74 Glossary
Dry-dock – An out-of-service period during which planned
repairs and maintenance are carried out, including all
underwater maintenance such as external hull painting.
During the dry-docking, certain mandatory Classification
Society inspections are carried out and relevant certifications
issued. Modern vessels are designed to operate for five years
between dry-dockings. Normally, as the age of a vessel
increases, the cost and frequency of dry-docking increase.
After the third Special Survey, Dry-docks will be conducted
every 2.5 years.
FPSO – Stands for Floating Production, Storage and Offloading.
FPSOs are designed to receive all of the hydrocarbon fluids
pumped by nearby offshore platforms (oil and gas), process it
and store it. FPSOs are typically moored offshore ship-shaped
vessels, with processing equipment, or topsides, aboard the
vessel’s deck and hydrocarbon storage below, in the hull of
the vessel.
FSO – A Floating, Storage and Offloading vessel is commonly
used in oil fields where it is not possible or efficient to lay a
pipeline to the shore. The production platform will transfer the
oil to the FSO where it will be stored until a tanker arrives and
connects to the FSO to offload it.
IMO – International Maritime Organisation – IMO’s main
task is to develop and maintain a comprehensive regulatory
framework for shipping
including safety, environmental
concerns, legal matters, technical co-operation, maritime
security and the efficiency of shipping. The Convention
establishing the International Maritime Organisation (IMO)
was adopted in Geneva in 1948.
Intertanko – International Association of Independent Tanker
Owners.
ISM – International Safety Management is a set of regulations
that operators of tankers must comply with, which aims to
improve the safety standards of the tanker industry.
Knot – A unit of speed equal to one nautical mile (1.852 km)
per hour, approximately 1.151 mph.
KPI – Key Performance Indicator. A performance indicator
or key performance indicator (KPI) is a type of performance
measurement. An organization may use KPIs to evaluate its
success, or to evaluate the success of a particular activity in
which it is engaged.
Mewis Duct – A device that can be positioned ahead of the
propeller. It can significantly enhance the efficiency of the
propulsion and can also be retrofitted on an existing ship. It
provides significant fuel savings at a given speed. The device
consists of a duct together with an integrated fin system.
MOPU – Mobile Offshore Production Unit.
OCIMF – The Oil Companies International Marine Forum
(OCIMF) is a voluntary association of oil companies with an
interest in the shipment and terminalling of crude oil, oil
products, petrochemicals and gas.
indemnity
insurance,
P&I Insurance – Protection and
commonly known as P&I insurance, is a form of marine
insurance provided by a P&I club. A P&I club is a mutual (i.e.
a co-operative) insurance association that provides cover for
its members, who will typically be ship owners, ship operators
or charterers.
Pool – A pool is a group of similar size and quality vessels with
different ship owners that are placed under one administrator
or manager. Pools allow for scheduling and other operating
efficiencies such as multi-legged charters and Contracts of
Affreightment.
Pool points – A system of pool points creates a model for a
ship with a performance equating to the average of those being
pooled. This ship is awarded 100 pool points. All other ships in
the pool are then given more or less pool points adjusted for
the characteristics of each vessel. Pool points, by their nature,
can only be used to address the differences between the ships
as described, and not the ship as performed.
Profit share – A mechanism where, depending on the outcome
of the negotiations and under certain Time Charter contracts
it is being agreed that the owner of the vessel is entitled to
an increase of the agreed base hire rate (minimum or floor)
amounting to a certain percentage of the difference between
that base rate and the average of rates applicable for a certain
period on certain routes.
Rate – The cost or revenue for a particular voyage based on a
standard reference, e.g. Worldscale, INTASCALE, ATRS.
Scrapping – The disposal of vessels by demolition for scrap
metal.
Glossary 75
Semi – A semi-submersible (semi-submerged ship) is a
specialized marine vessel used in a number of specific
offshore roles such as offshore drilling rigs, safety platforms,
oil production platforms and heavy lift cranes. They are
designed with good stability and seakeeping characteristics.
Other terms include semisubmersible, semi-sub, or simply
semi.
Shale oil – Crude oil that is extracted from oil shale (fine-
grained sedimentary rock containing kerogen) by using
techniques other than the conventional (oil well) method for
example heating and distillation.
Spar – Single Point Mooring and Reservoir — A spar is a type
of floating oil platform typically used in very deep waters and
is named for logs used as buoys in shipping that are moored
in place vertically. Spar production platforms have been
developed as an alternative to conventional platforms.
Special Survey – The survey required by the Classification
Society that usually takes place every five years and usually
in a dry-dock. During the Special Survey all vital pieces
of equipment and compartments and steel structures are
opened up and inspected by the classification surveyor.
Spill – Oil getting into the sea, in any amount, for any reason.
Spot (Voyage) Charter – A charter for a particular vessel to
transport a single cargo between specified loading port(s)
and discharge port(s) in the immediate future. The contract
rate (spot rate) covers total operating expenses such as port
charges, bunkering, crew expenses, insurance, repairs and
canal tolls. The charterer will generally pay all cargo-related
costs and is liable for Demurrage, if incurred. The rate is
usually quoted in terms of Worldscale (see below).
Spot Market – The market for the immediate charter of a
vessel.
Suezmax – The maximum size vessel that can sail through
the Suez Canal. This is generally considered to be between
120,000 and 199,999 dwt depending on a ship’s dimensions
and draft. These tankers can transport up to one million
barrels of crude oil.
(Super) slow steaming – Reducing operating speeds in order
to save fuel. Operating laden speeds are reduced from 15
knots to 13 knots and operating ballast speeds from 15 knots
to 8 knots.
Technical Management – The management of the operation
of a vessel, including physically maintaining the vessel,
maintaining necessary certifications and supplying necessary
stores, spares and lubricating oils. Responsibilities also
generally include selecting, engaging and training crew and
could also include arranging necessary insurance coverage.
Time Charter (T/C) – A Charter for a fixed period of time,
usually between one and ten years, under which the owner
hires out the vessel to the Charterer fully manned, provisioned
and insured. The Charterer is usually responsible for bunkers,
port charges, canal tolls and any extra cost related to the
cargo. The Charter rate (hire) is quoted in terms of a total
cost per day. Subject to any restrictions in the Charter, the
customer decides the type and quantity of cargo to be carried
and the ports of loading and unloading.
Time Charter Equivalent (TCE) – TCE revenues, which are
voyage revenues less voyage expenses, serve as an industry
standard for measuring and managing fleet revenue and for
comparing results between geographical regions and among
competitors.
Tension Leg Platform (TLP) – A tension-leg platform (TLP) or
extended tension leg platform (ETLP) is a vertically moored
floating structure normally used for the offshore production
of oil or gas and is particularly suited for water depths greater
than 300 meters (about 1,000 ft.) and less than 1,500 meters
(about 4,900 ft). Use of tension-leg platforms has also been
proposed for wind turbines.
76 Glossary
Ton-mile – A unit for freight transportation equivalent to a ton
of freight moved one mile.
VLCC – The abbreviation for Very Large Crude Carrier. Tankers
with a capacity between 200,000 and 320,000 dwt. These
tankers can transport up to two million barrels of crude oil.
Ton-mile demand – A calculation that multiplies the average
distance of each route a tanker travels by the volume of cargo
moved. The greater the increase in long-haul movement
compared with shorter haul movements, the higher the
increase in ton-mile demand.
Tramp – As opposed to freight liners, tramp ships trade on the
spot market with no fixed schedule, itinerary or ports-of-call.
Trampers go wherever the cargo is and carry it to wherever it
wants to go, within reason, like taxi cabs.
Ultra Deep Water (UDW) – Water depth of more than 1,500
meters.
Vessel Expenses – Includes crew costs, vessel stores and
supplies, lubricating oils, maintenance and repairs, insurance
and communication costs associated with the operation of
vessels.
Vetting – The Oil Companies International Maritime Forum
(OCIMF) set up a system for inspecting ships to ensure they
are fit for purpose. They use a system called Ship Inspection
Report Programme
(SIRE) which requires six-monthly
inspections. Most cargo moves require a SIRE inspection
within the last six months and each oil company is free to
decide if it considers the inspection report satisfactory. The
SIRE report system can only be viewed by the members of
OCIMF and not by brokers or ship owners.
V-Plus – A crude oil tanker (ULCC or Ultra Large Crude
Carrier) of more than 350,000 dwt which makes it one of the
biggest oil tankers in the world. These tankers can transport
up to three million barrels or more of crude oil and are mainly
used on the same long-haul routes as VLCCs.
Voyage Expenses – Includes fuel, port charges, canal tolls,
cargo handling operations and brokerage commissions paid
by the ship owner under Voyage Charters. These expenses are
subtracted from shipping revenues to calculate Time Charter
Equivalent revenues for Voyage Charters.
Worldscale – The New Worldwide Tanker Nominal Freight
Scale is a catalogue of theoretical freight rates expressed as
USD per ton for most of the conceivable spot voyages in the
tanker trade. The final rate agreed will be determined as a
percentage of the ‘Worldscale’ rate, based upon a guaranteed
minimum quantity of cargo. That allows for charter parties to
cover a wide range of possible voyage options without the need
to calculate and negotiate each one separately.
Glossary 77
FINANCIAL REPORT
- Consolidated financial statements
- Notes to the consolidated financial statements
- Statutory financial statements Euronav NV
80
86
147
Een Nederlandstalige versie van de geconsolideerde jaarrekening is beschikbaar
op de website van de vennootschap www. euronav.com. Een papieren versie van
de geconsolideerde jaarrekening in het Nederlands is tevens verkrijgbaar op
eenvoudig verzoek.
78 Financial Report
78 Visie en Missie
Financial Report 79
Visie en Missie 79
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of USD except per share amounts)
Note
December 31, 2015
December 31, 2014
ASSETS
Current assets
Trade and other receivables
Current tax assets
Cash and cash equivalents
Non-current assets held for sale
TOTAL CURRENT ASSETS
Non-current assets
Vessels
Assets under construction
Other tangible assets
Prepayments
Intangible assets
Receivables
Investments in equity-accounted investees
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
10
-
11
2
7
7
7
7
-
9
24
8
219,080
114
131,663
24,195
375,052
2,288,036
93,890
1,048
2
238
259,908
21,637
935
2,665,694
3,040,746
194,733
36
254,086
89,000
537,855
2,258,334
-
1,226
16,601
29
258,447
17,332
6,536
2,558,505
3,096,360
80 Financial Report
80 Visie en Missie
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
(in thousands of USD except per share amounts)
Note
December 31, 2015
December 31, 2014
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Tax liabilities
Bank loans
Convertible and other Notes
Provisions
TOTAL CURRENT LIABILITIES
Non-current liabilities
Bank loans
Convertible and other Notes
Other payables
Deferred tax liabilities
Employee benefits
Amounts due to equity-accounted joint ventures
Provisions
TOTAL NON-CURRENT LIABILITIES
Equity
Share capital
Share premium
Translation reserve
Hedging reserve
Treasury shares
Other equity interest
Retained earnings
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
TOTAL EQUITY AND LIABILITIES
17
-
14
14
-
14
14
15
8
16
24
-
-
-
-
18
12
12
-
79,078
1
100,022
-
406
179,507
952,426
-
590
-
2,038
-
436
125,555
1
146,303
23,124
412
295,395
1,088,026
231,373
489
-
2,108
5,880
381
955,490
1,328,257
173,046
1,215,227
(50)
-
(12,283)
-
529,809
1,905,749
3,040,746
142,441
941,770
379
-
(46,062)
75,000
359,180
1,472,708
3,096,360
The accompanying notes on pages 86 to 146 are an integral part of these consolidated financial statements.
Financial Report 81
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(in thousands of USD except per share amounts)
Shipping revenue
Revenue
Gains on disposal of vessels/other tangible assets
Other operating income
TOTAL SHIPPING REVENUE
Operating expenses
Voyage expenses and commissions
Vessel operating expenses
Charter hire expenses
Losses on disposal of vessels/other tangible assets
Impairment on non-current assets held for sale
Depreciation tangible assets
Depreciation intangible assets
General and administrative expenses
TOTAL OPERATING EXPENSES
RESULT FROM OPERATING ACTIVITIES
Finance income
Finance expenses
NET FINANCE EXPENSES
Share of profit (loss) of equity accounted investees (net of income tax)
PROFIT (LOSS) BEFORE INCOME TAX
Income tax benefit (expense)
PROFIT (LOSS) FOR THE PERIOD
Attributable to:
Owners of the Company
Basic earnings per share
Diluted earnings per share
Weighted average number of shares (basic)
Weighted average number of shares (diluted)
Note
2015
Jan. 1 - Dec. 31, 2015
2014
Jan. 1 - Dec. 31, 2014
3
7
-
4
4
4
7
2
7
-
4
5
5
24
6
-
13
13
13
13
846,507
13,302
7,426
473,985
13,122
11,411
867,235
498,518
(71,237)
(153,718)
(25,849)
(8,002)
-
(210,156)
(50)
(46,251)
(118,303)
(124,089)
(35,664)
-
(7,416)
(160,934)
(20)
(40,565)
(515,263)
(486,991)
351,972
3,312
(50,942)
11,527
2,617
(95,970)
(47,630)
(93,353)
51,592
30,286
355,934
(51,540)
(5,633)
5,743
350,301
(45,797)
350,301
(45,797)
2.25
2.22
(0.39)
(0.39)
155,872,171
157,529,562
116,539,018
116,539,018
The accompanying notes on pages 86 to 146 are an integral part of these consolidated financial statements.
82 Financial Report
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in thousands of USD except per share amounts)
Note
2015
Jan. 1 - Dec. 31, 2015
2014
Jan. 1 - Dec. 31, 2014
Profit/(loss) for the period
350,301
(45,797)
Other comprehensive income, net of tax
Items that will never be reclassified to profit or loss:
Remeasurements of the defined benefit liability (asset)
Items that are or may be reclassified to profit or loss:
Foreign currency translation differences
Cash flow hedges - effective portion of changes in fair value
Equity-accounted investees - share of other comprehensive income
OTHER COMPREHENSIVE INCOME, NET OF TAX
16
5
18
24
(44)
(393)
(429)
-
1,610
1,136
(567)
1,291
2,106
2,437
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
351,437
(43,360)
Attributable to:
Owners of the Company
351,437
(43,360)
The accompanying notes on pages 86 to 146 are an integral part of these consolidated financial statements.
Financial Report 83
Visie en Missie 83
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in thousands of USD except per share amounts)
Note
Share
capital
Share
premium
Trans-
lation
reserve
Hedging
reserve
Treasury
shares
Retained
earnings
Capital
and
reserves
Other
equity
interest
Total
equity
BALANCE AT 1 JANUARY 2014
58,937
365,574
946
(1,291)
(46,062)
422,886
800,990
-
-
-
-
-
-
800,990
(45,797)
2,437
(43,360)
462,306
102,278
(45,797)
1,713
(44,084)
(45,797)
2,437
(43,360)
(12,694)
(7,422)
462,306
102,278
-
-
-
-
-
-
-
-
(3,500)
71,500
75,000
146,500
3,994
(19,622)
3,994
640,078
-
75,000
3,994
715,078
Profit (loss) for the period
Total other comprehensive income
Total comprehensive income
Transactions with owners of the
Company
Issue of ordinary shares
Issue and conversion convertible Notes
Issue and conversion perpetual
convertible preferred equity
Equity-settled share-based payment
Total transactions with owners
-
-
12
12
12
22
-
-
-
-
-
-
-
(567)
(567)
-
1,291
1,291
53,119
20,103
421,881
89,597
10,282
64,718
-
83,504
-
576,196
-
-
-
-
-
-
-
-
-
-
379
379
BALANCE AT 31 DECEMBER 2014
142,441
941,770
BALANCE AT 1 JANUARY 2015
142,441
941,770
-
(46,062)
359,180 1,397,708
75,000 1,472,708
-
(46,062)
359,180 1,397,708
75,000 1,472,708
Profit (loss) for the period
Total other comprehensive income
Total comprehensive income
Transactions with owners of the Company
Issue of ordinary shares
Conversion perpetual convertible
preferred equity
Dividends to equity holders
Treasury shares
Equity-settled share-based payment
Total transactions with owners
-
-
12
12
-
12
22
-
-
-
-
-
-
-
(429)
(429)
20,324
208,738
10,281
64,719
-
-
-
30,605
-
-
-
273,457
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
350,301
-
-
1,565
- 351,866
350,301
1,136
351,437
-
-
-
350,301
1,136
351,437
-
-
(19,357)
209,705
-
209,705
-
75,000
(75,000)
-
- (138,001)
(25,516)
1,637
33,779 (181,237)
33,779
-
(138,001)
8,263
1,637
-
-
-
156,604 (75,000)
(138,001)
8,263
1,637
81,604
BALANCE AT 31 DECEMBER 2015
173,046
1,215,227
(50)
-
(12,283)
529,809 1,905,749
- 1,905,749
The accompanying notes on pages 86 to 146 are an integral part of these consolidated financial statements.
84 Financial Report
84 Visie en Missie
Note
2015
Jan. 1 - Dec. 31, 2015
2014
Jan. 1 - Dec. 31, 2014
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of USD except per share amounts)
Cash flows from operating activities
Profit (loss) for the period
Adjustments for:
Depreciation of tangible assets
Depreciation of intangible assets
Impairment on non-current assets held for sale
Provisions
Tax (benefits)/expenses
Share of profit of equity-accounted investees, net of tax
Net finance expense
(Gain)/loss on disposal of assets
Equity-settled share-based payment transactions
Changes in working capital requirements
Change in cash guarantees
Change in trade receivables
Change in accrued income
Change in deferred charges
Change in other receivables
Change in trade payables
Change in accrued payroll
Change in accrued expenses
Change in deferred income
Change in other payables
Change in provisions for employee benefits
Income taxes paid during the period
Interest paid
Interest received
Dividends received from equity-accounted investees
NET CASH FROM (USED IN) OPERATING ACTIVITIES
Acquisition of vessels
Proceeds from the sale of vessels
Acquisition of other tangible assets
Acquisition of intangible assets
Proceeds from the sale of other (in)tangible assets
Loans from (to) related parties
Proceeds from capital decreases in joint ventures
Purchase of joint ventures, net of cash acquired
NET CASH FROM (USED IN) INVESTING ACTIVITIES
Proceeds from issue of share capital
Transaction costs related to issue of share capital
Proceeds from issue of perpetual convertible preferred equity
Transaction costs related to issue perpetual convertible preferred equity
Proceeds from sale of treasury shares
Proceeds from new long-term borrowings
Repayment of long-term borrowings
Transaction costs related to issue of loans and borrowings
Dividends paid
NET CASH FROM (USED IN) FINANCING ACTIVITIES
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Net cash and cash equivalents at the beginning of the period
Effect of changes in exchange rates
NET CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
-
7
-
2
-
6
24
5
7
4
-
10
10
10
9-10
17
17
17
17
17
16
-
5-17
5-10
24
7
7
7
-
-
24
24
24
12
12
12
12
12
14
14
14
-
11
-
11
The accompanying notes on pages 86 to 146 are an integral part of these consolidated financial statements.
350,301
(45,797)
208,305
210,156
50
-
91
5,633
(51,592)
47,630
(5,300)
1,637
(57,692)
1
12,330
(13,175)
11,090
(34,654)
1,190
255
(1,649)
6,612
(39,800)
108
(109)
(50,810)
262
275
450,532
(351,596)
112,890
(8,289)
(258)
95
39,785
1,500
-
217,410
160,934
20
7,416
840
(5,743)
(30,286)
93,353
(13,118)
3,994
(112,280)
(658)
(23,755)
(8,577)
(2,124)
(64,299)
(10,512)
166
9,581
(2,016)
(10,171)
85
67
(54,449)
421
9,410
14,782
(1,053,939)
123,609
(123,188)
(19)
22
29,508
1,000
-
(205,873)
(1,023,007)
229,063
(19,357)
-
-
8,263
931,270
(1,367,871)
(8,680)
(138,003)
475,000
(12,694)
150,000
(3,500)
-
1,395,392
(799,891)
(15,284)
(2)
(365,315)
1,189,021
(120,656)
180,796
254,086
(1,767)
131,663
74,309
(1,019)
254,086
Financial Report 85
Notes to the consolidated financial statements for the period ended
December 31, 2015
SIGNIFICANT ACCOUNTING POLICIES
1. Reporting Entity
Euronav NV (the “Company”) is a company domiciled in
Belgium. The address of the Company’s registered office
is De Gerlachekaai 20, 2000 Antwerpen, Belgium. The
consolidated financial statements of the Company comprise
the Company and its subsidiaries (together referred to as
the “Group”) and the Group’s interest in associates and joint
ventures.
Euronav NV is a fully-integrated provider of international
maritime shipping and offshore services engaged in the
transportation and storage of crude oil. The Company was
incorporated under the laws of Belgium on June 26, 2003, and
grew out of three companies that had a strong presence in
the shipping industry; Compagnie Maritime Belge NV, or CMB,
formed in 1895, Compagnie Nationale de Navigation SA, or
CNN, formed in 1938, and Ceres Hellenic formed in 1950. The
Company started doing business under the name “Euronav” in
1989 when it was initially formed as the international tanker
subsidiary of CNN.
Euronav NV charters its vessels to leading international energy
companies. The Company pursues a balanced chartering
strategy by employing its vessels on a combination of spot
market voyages, fixed-rate contracts and long-term time
charters, which typically include a profit sharing component.
2. Basis of preparation
(a) Statement of compliance
These financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) issued
by the International Accounting Standards Board (IASB) as
adopted by the European Union on December 31, 2015.
(d) Use of estimates and judgements
The preparation of the consolidated financial statements
in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets
and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience
and various other factors that are believed to be reasonable
under the circumstances, the results of which are the basis of
making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and
future periods.
Information about critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognized in the consolidated financial statement is included
in the following note:
• Note 7 – Impairment
Information about assumptions and estimation uncertainties
that have a significant risk on resulting in a material
adjustment within the next financial year are included in the
following note:
• Note 7 – Impairment test: key assumptions underlying the
recoverable amount
All accounting policies have been consistently applied for all
periods presented in the consolidated financial statements,
unless disclosed otherwise.
Measurement of fair values
A number of the Group’s accounting policies and disclosures
require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The consolidated financial statements were authorized for
issue by the Board of Directors on March 15, 2016.
(b) Basis of measurement
The consolidated financial statements have been prepared
on the historical cost basis except for the following material
items in the statement of financial position:
• Derivative financial instruments are measured at fair value.
(c) Functional and presentation currency
The consolidated financial statements are presented in USD,
which is the Company’s functional and presentation currency.
All financial information presented in USD has been rounded
to the nearest thousand except when otherwise indicated.
The Group has an established control framework with
respect to the measurement of fair values. This includes a
valuation team that has overall responsibility for overseeing
all significant fair value measurements, including Level 3 fair
values, and reports directly to the CFO.
The valuation team regularly reviews significant unobservable
inputs and valuations adjustments. If third party information,
such as broker quotes or pricing services, is used to measure
fair values, then the valuation team assesses the evidence
obtained from the third parties to support the conclusion that
such valuations meet the requirements of IFRS, including
the level in the fair value hierarchy in which such valuations
should be classified.
86 Financial Report
Significant valuation issues are reported to the Group Audit
and Risk Committee.
When measuring the fair value of an asset or a liability, the
Group uses market observable data as far as possible. Fair
values are categorized into different levels in a fair value
hierarchy based on the inputs used in the valuation techniques
as follows.
• Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability might be categorized in different levels of the fair value
hierarchy, then the fair value measurement is categorized in
its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
The Group recognizes transfers between levels of the fair
value hierarchy at the end of the reporting period during which
the change has occurred.
(e) Changes in accounting policies
Except for the changes below, the accounting policies adopted
in the preparation of the consolidated financial statements
for the year ended December 31, 2015 are consistent with
those applied in the preparation of the consolidated financial
statements for the year ended December 31, 2014. The Group
has adopted the following new standards, interpretations
and amendments to standards, including any consequential
amendments to other standards, with a date of initial
application of January 1, 2015:
• Amendments to IAS 19 Employee Benefits – Defined benefit
plans: Employee Contributions
• Annual
improvements to
IFRS 2010-2012 cycle and
2011-2013 cycle
• IFRIC 21 Levies
The adoption of
interpretations and
these standards,
amendments to standards did not have a material impact on
the Group’s consolidated financial statements.
(f) Basis of Consolidation
(i) Business Combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to
govern the financial and operating policies of an entity so as
to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that
currently are exercisable.
For acquisitions on or after January 1, 2010, the Group
measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognized amount of any non-controlling interests in
the acquiree; plus if the business combination is achieved
in stages, the fair value of the existing equity interest in the
acquiree; less
• the net recognized amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognized immediately in profit or loss.
The consideration transferred does not include amounts
related to the settlement of pre-existing relationships. Such
amounts generally are recognized in profit or loss.
Transaction costs, other than those associated with the issue
of debt or equity securities, that the Group incurs in connection
with a business combination are expensed as incurred.
Any contingent consideration payable is measured at fair
value at the acquisition date. If the contingent consideration is
classified as equity, then it is not remeasured and settlement
is accounted for within equity. Otherwise, subsequent changes
in the fair value of the contingent consideration are recognized
in profit or loss.
(ii) Acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for
as transactions with owners in their capacity as owners and
therefore no goodwill is recognized as a result. Adjustments
to non-controlling interests arising from transactions that do
not involve the loss of control are based on a proportionate
amount of the net assets of the subsidiary.
(iii) Subsidiaries
Subsidiaries are those entities controlled by the Group. The
Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the
entity. The financial statements of subsidiaries are included in
the consolidated financial statements from the date on which
the control commences until the date on which control ceases.
(iv) Loss of control
On the loss of control, the Group derecognizes the assets and
liabilities of the subsidiary, any non-controlling interests and
the other components of equity related to the subsidiary. Any
surplus or deficit arising on the loss of control is recognized
in profit or loss. If the Group retains any interest in the former
subsidiary, then such interest is measured at fair value at the
date that control is lost. Subsequently it is accounted for as an
equity-accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.
Financial Report 87
(v) Interests in equity-accounted investees
The Group’s interests in equity-accounted investees comprise
interest in associates and joint ventures.
Associates are those entities in which the Group has significant
influence, but not control or joint control, over the financial
and operating policies. A joint venture is an arrangement in
which the Group has joint control, whereby the Group has
rights to the net assets of the arrangement.
Interest in associates and joint ventures are accounted for
using the equity method. They are recognized initially at
cost, which includes transaction costs. Subsequent to initial
recognition, the consolidated financial statements include the
Group’s share of the profit or loss and OCI of equity-accounted
investees, until the date on which significant influence or joint
control ceases.
joint ventures
in associates and
include any
Interests
long-term interests that, in substance, form part of the
Group’s investment in those associates or joint ventures and
include unsecured shareholder loans for which settlement is
neither planned nor likely to occur in the foreseeable future,
which, therefore, are an extension of the Group’s investment
in those associates and joint ventures. The Group’s share of
losses that exceeds its investment is applied to the carrying
amount of those loans. After the Group’s interest is reduced to
zero, a liability is recognized to the extent that the Group has a
legal or constructive obligation to fund the associates’ or joint
ventures’ operations or has made payments on their behalf.
(vi) Transactions eliminated on consolidation
Intragroup balances and transactions, and any unrealized
gains arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealized
gains arising
transactions with equity-accounted
investees are eliminated against the investment to the extent
of the Group’s interest in the investee. Unrealized losses are
eliminated in the same way as unrealized gains, but only to the
extent that there is no evidence of impairment.
from
(g) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to USD at the
foreign exchange rate applicable at the date of the transaction.
Monetary assets and liabilities denominated
in foreign
currencies at the balance sheet date are translated to USD
at the foreign exchange rate applicable at that date. Foreign
exchange differences arising on translation are recognized
in profit or loss. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the
transaction.
88 Financial Report
(ii) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated to USD at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to
USD at rates approximating the exchange rates at the dates of
the transactions.
Foreign currency differences are recognized directly in equity
(Translation reserve). When a foreign operation is disposed of,
in part or in full, the relevant amount in the translation reserve
is transferred to profit or loss.
(h) Financial Instruments
(i) Non-derivative financial assets
The Group initially recognizes loans and receivables on
the date that they are originated. All other financial assets
(including assets designated as at fair value through profit
and loss) are recognized initially on the trade date, which is
the date that the Group becomes a party to the contractual
provisions of the instrument.
The Group derecognizes a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers
the rights to receive the contractual cash flows in a transaction
in which substantially all the risks and rewards of ownership
of the financial asset are transferred. Any interest in such
transferred financial assets that is created or retained by the
Group is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and
only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realize the
asset and settle the liability simultaneously.
The fair values of quoted investments are based on current bid
prices. If the market for a financial asset is not active (and for
unlisted securities), the Group establishes fair value by using
valuation techniques. These include the use of recent arm’s
length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, and
option pricing models refined to reflect the issuer’s specific
circumstances.
loss,
The Group classifies non-derivative financial assets into the
following categories: financial assets at fair value through
loans and receivables, held-to-maturity
profit or
financial assets and available-for-sale financial assets. The
Company determines the classification of its investments at
initial recognition and re-evaluates this designation at every
reporting date.
Financial assets at fair value through profit or loss
A financial asset is classified as at fair value through profit or
loss if it is classified as held for trading or is designated as
such on initial recognition. Financial assets are designated as
at fair value through profit or loss if the Group manages such
investments and makes purchase and sale decisions based on
their fair value in accordance with the Group’s documented risk
management or investment strategy. Attributable transaction
costs are recognized in profit or loss as incurred. Financial
assets at fair value through profit or loss are measured at
fair value and changes therein, which takes into account any
dividend income, are recognized in profit or loss.
Financial assets designated as at fair value through profit or
loss comprise equity securities that otherwise would have
been classified as available for sale.
Assets in this category are classified as current assets if they
are expected to be realized within 12 months of the balance
sheet date.
Loans and receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active
market. Such assets are recognized initially at fair value
plus any directly attributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at
amortized cost using the effective interest method, less any
impairment losses.
They arise when the Group provides money, goods or services
directly to a debtor with no intention of trading the receivable.
They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These
are classified as non-current assets. Loans and receivables
are included in trade and other receivables in the statement
of financial position.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of
changes in their fair value, and are used by the Group in the
management of its short-term commitments.
Held-to-maturity financial assets
If the Group has the positive intent and ability to hold debt
securities to maturity, then such financial assets are classified
as held-to-maturity. Held-to-maturity financial assets are
recognized initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, held-to-
maturity financial assets are measured at amortized cost using
the effective interest method, less any impairment losses.
Held-to-maturity financial assets comprise debentures.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that
are either designated in this category or not classified in any
of the other categories. Available-for-sale financial assets are
recognized initially at fair value plus any directly attributable
transaction costs.
Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses
and foreign currency differences on available-for-sale debt
instruments, are recognized in other comprehensive income
and presented in the fair value reserve in equity. When an
investment is derecognized, the gain or loss accumulated in
equity is reclassified to profit or loss.
Available-for-sale financial assets comprise equity securities
and debt securities.
They are included in non-current assets unless the Company
intends to dispose of the investment within 12 months of the
balance sheet date.
(ii) Non-derivative financial liabilities
The Group initially recognizes debt securities issued and
subordinated liabilities on the date that they are originated. All
other financial liabilities (including liabilities designated as at
fair value through profit or loss) are recognized initially on the
trade date, which is the date that the Group becomes a party
to the contractual provisions of the instrument.
The Group derecognizes a financial
contractual obligations are discharged, cancelled or expire.
liability when
its
Non-derivative financial liabilities are recognized initially
at fair value less any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities
are measured at amortized cost using the effective interest
method.
Non-derivative financial
borrowings, bank overdrafts, and trade and other payables.
liabilities comprise
loans and
Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as
a component of cash and cash equivalents for the purpose of
the statement of cash flows.
(iii) Share capital
Ordinary share capital
Ordinary share capital is classified as equity. Incremental
costs directly attributable to the issue of ordinary shares are
recognized as a deduction from equity, net of any tax effects.
Financial Report 89
Repurchase of share capital
When share capital recognized as equity is repurchased,
the amount of the consideration paid, including directly
attributable costs, net of any tax effects, is recognized as a
deduction from equity. Repurchased shares are classified as
treasury shares and presented in the reserve for own shares.
When treasury shares are sold or reissued subsequently, the
amount received is recognized as an increase in equity, and
the resulting surplus or deficit on the transaction is presented
in share premium.
(iv) Derivative financial instruments
The Group from time to time may enter into derivative financial
instruments to hedge its exposure to market fluctuations,
interest rate risks arising from
foreign exchange and
operational, financing and investment activities.
On initial designation of the derivative as hedging instrument,
the Group formally documents the relationship between the
hedging instrument(s) and hedged item(s), including the
risk management objectives and strategy in undertaking the
hedge transaction, together with the methods that will be
used to assess the effectiveness of the hedging relationship.
The Group makes an assessment, both at the inception of the
hedge relationship as well as on an ongoing basis, whether
the hedging instruments are expected to be “highly effective”
in offsetting the changes in the fair value or cash flows of
the respective hedged items during the period for which the
hedge is designated, and whether the actual results of each
hedge are within a range of 80-125 percent. For a cash flow
hedge of a forecast transaction, the transaction should be
highly probable to occur and should present an exposure to
variations in cash flows that could ultimately affect reported
net income.
Derivative financial instruments are recognized initially at
fair value; attributable transaction costs are expensed as
incurred. Subsequent to initial recognition, all derivatives are
remeasured to fair value, and changes therein are accounted
for as follows:
Cash flow hedges
When a derivative is designated as the hedging instrument
in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognized asset or liability
or a highly probable forecast transaction that could affect
profit or loss, the effective portion of changes in the fair value
of the derivative is recognized in other comprehensive income
and presented in the hedging reserve in equity.
The amount recognized in other comprehensive income is
removed and included in profit or loss in the same period as
the hedged cash flows affect profit or loss under the same line
item in the statement of comprehensive income as the hedged
item. Any ineffective portion of changes in the fair value of the
derivative is recognized immediately in profit or loss.
90 Financial Report
When the hedged item is a non-financial asset, the amount
accumulated in equity is included in the carrying amount of
the asset when the asset is recognized. In other cases, the
amount accumulated in equity is reclassified to profit or loss
in the same period that the hedged item affects profit or loss.
If the hedging instrument no longer meets the criteria for
hedge accounting, expires or is sold, terminated, exercised,
or the designation is revoked, then hedge accounting is
discontinued prospectively. If the forecast transaction is
no longer expected to occur, then the balance in equity is
reclassified to profit or loss.
Other non-trading derivatives
When a derivative financial instrument is not held for trading,
and is not designated in a qualifying hedge relationship, all
changes in its fair value are recognized immediately in profit
or loss.
(v) Compound financial instruments
Compound financial instruments issued by the Group comprise
Notes denominated in USD that can be converted to ordinary
shares at the option of the holder, when the number of shares is
fixed and does not vary with changes in fair value.
The liability component of compound financial instruments is
initially recognized at the fair value of a similar liability that does
not have an equity conversion option. The equity component is
initially recognized at the difference between the fair value of
the compound financial instrument as a whole and the fair value
of the liability component. Any directly attributable transaction
costs are allocated to the liability and equity component in
proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a
compound financial instrument is measured at amortized cost
using the effective interest method. The equity component of a
compound financial instrument is not remeasured.
Interest related to the financial liability is recognized in profit
and loss. On conversion, the financial liability is reclassified to
equity and no gain or loss is recognized.
(i) Intangible assets
(i) Goodwill
Goodwill that arises on the acquisition of subsidiaries is
presented as an intangible asset. For the measurement of
goodwill at initial recognition, see accounting policy (f).
After initial recognition goodwill is measured at cost less
accumulated impairment losses (refer to accounting policy
(k)). In respect of equity accounted investees, the carrying
amount of goodwill is included in the carrying amount of
the investment, and any impairment loss is allocated to the
carrying amount of the equity accounted investee as a whole.
(ii) Other intangible assets
Other intangible assets that are acquired by the Group and
have finite useful lives are measured at cost less accumulated
amortization and impairment losses (see accounting policy k).
The cost of an intangible asset acquired in a separate acquisition
is the cash paid or the fair value of any other consideration given.
The cost of an internally generated intangible asset includes the
directly attributable expenditure of preparing the asset for its
intended use.
Gains and losses on disposal of a vessel or of another item of
property, plant and equipment are determined by comparing
the net proceeds from disposal with the carrying amount of
the vessel or the item of property, plant and equipment and
are recognized in profit or loss.
For the sale of vessels or other items of property, plant and
equipment, transfer of risk and rewards usually occurs upon
delivery of the vessel to the new owner.
(iii) Subsequent expenditure
Subsequent expenditure on intangible assets is capitalised only
when it increases the future economic benefits embodied in the
specific asset to which it relates and its cost can be measured
reliably. All other expenditure is expensed as incurred.
(iv) Amortization
Amortization is charged to the income statement on a straight-
line basis over the estimated useful lives of the intangible
assets from the date they are available for use. The estimated
useful lives are as follows:
• Software: 3 - 5 years
Amortization methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
(j) Vessels, property, plant and equipment
(i) Owned assets
Vessels and items of property, plant and equipment are stated
at cost or deemed cost less accumulated depreciation (see
below) and impairment losses (refer to accounting policy (k)).
Cost includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed assets
includes the following:
• The cost of materials and direct labor;
• Any other costs directly attributable to bringing the assets to
a working condition for their intended use;
• When the Group has an obligation to remove the asset or
restore the site, an estimate of the costs of dismantling and
removing the items and restoring the site on which they are
located; and
• Capitalized borrowing costs.
Property that is being constructed or developed for future
use as investment property is classified as property, plant
and equipment and stated at cost until construction or
development is complete, at which time it is reclassified as
investment property.
Where an item of property, plant and equipment comprises
major components having different useful lives, they are
accounted for as separate items of property, plant and
equipment (refer to accounting policy (j) viii).
(ii) Leased assets
Leases in terms of which the Group assumes substantially all
of the risks and rewards of ownership are classified as finance
leases. Plant and equipment acquired by way of finance lease
is stated at an amount equal to the lower of its fair value and
the present value of the minimum lease payments at inception
of the lease, less accumulated depreciation (see below)
and impairment losses (refer accounting policy (k)). Lease
payments are accounted for as described in accounting policy
(q).
Other leases are operating leases and are not recognized in
the Group’s statement of financial position.
(iii) Investment property
Investment property is property held either to earn rental
income or for capital appreciation or for both, but not for sale
in the ordinary course of business, use in the production or
supply of goods or services or for administrative purposes.
Investment property is measured at cost less accumulated
depreciation and impairment losses (refer to accounting policy
(k)). As such, the accounting policies as described in note (j)
Vessels, property, plant and equipment apply.
Cost includes expenditure that is directly attributable to
the acquisition of the investment property. The cost of
self-constructed investment property includes the cost of
materials and direct labor, any other costs directly attributable
to bringing the investment property to a working condition for
their intended use and capitalized borrowing costs.
Any gain or loss on disposal of an investment property
(calculated as the difference between the net proceeds from
disposal and the carrying amount of the item) is recognized
in profit or loss.
(iv) Assets under construction
Assets under construction, especially newbuilding vessels,
are accounted for in accordance with the stage of completion
of the newbuilding contract. Typical stages of completion are
the milestones that are usually part of a newbuilding contract:
signing or receipt of refund guarantee, steel cutting, keel
laying, launching and delivery. All stages of completion are
guaranteed by a refund guarantee provided by the shipyard.
Financial Report 91
(v) Subsequent expenditure
Subsequent expenditure is capitalized only when it increases
the future economic benefits embodied in the item of property,
plant and equipment and its cost can be measured reliably.
The carrying amount of the replaced part is derecognized. All
other expenditure is recognized in the consolidated statement
of profit or loss as an expense as incurred.
(vi) Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized
as part of the cost of that asset.
(vii) Depreciation
Depreciation is charged to the consolidated statement of profit
or loss on a straight-line basis over the estimated useful lives of
vessels and items of property, plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term. Land is not depreciated.
Vessels and items of property, plant and equipment are
depreciated from the date that they are available for use, in
respect of internally constructed assets, from the date that the
asset is completed and ready for use.
The estimated useful lives of significant items of property,
plant and equipment are as follows:
• tankers
• FSO/FpSO/FPSO
• buildings
• plant and equipment
• fixtures and fittings
• other tangible assets
• dry-docking
20 years
25 years
33 years
5 - 20 years
5 - 10 years
3 - 20 years
3 - 5 years
Depreciation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
(viii) Dry-docking – component approach Dry-docking –
component approach
Where an item of property, plant and equipment comprises
major components having different useful lives, they are
accounted for as separate items of property, plant and
equipment. Costs associated with routine repairs and
maintenance are expensed as incurred including routine
maintenance performed whilst the vessel is in dry-dock. After
each dry-dock, all the components installed (as replacements
or as additional components) during the dry-dock are
classified in two categories (according to their estimated
lifetime and their respective cost).
(k) Impairment
(i) Non-derivative financial assets
A financial asset not classified as at fair value through profit
or loss is assessed at each reporting date whether there is
objective evidence that it is impaired.
A financial asset is impaired if there is objective evidence of
impairment as a result of one or more events that occurred
after the initial recognition of the asset, and that loss event(s)
had an impact on the estimated future cash flows of that asset
that can be estimated reliably.
Objective evidence that financial assets are impaired includes
default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not
consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status
of borrowers or issuers, economic conditions that correlate
with defaults or the disappearance of an active market for a
security. In addition, for an investment in an equity security a
significant or prolonged decline in the fair value of the security
below its cost is objective evidence of impairment.
Financial assets measured at amortized cost
The Group considers evidence of impairment for financial
assets measured at amortized cost (loans and receivables and
held-to-maturity financial assets) at both a specific asset and
collective level. All individually significant assets are assessed
for specific impairment. Those found not to be specifically
impaired are then collectively assessed for any impairment
that has been incurred but not yet identified. Assets that
are not individually significant are collectively assessed for
impairment by grouping together assets with similar risk
characteristics.
In assessing collective impairment, the Group uses historical
trends of the probability of default, the timing of recoveries
and the amount of loss incurred, adjusted for management’s
judgement as to whether current economic and credit
conditions are such that the actual losses are likely to be
greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured
at amortized cost is calculated as the difference between its
carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest
rate. Losses are recognized in profit or loss and reflected in
an allowance account against loans and receivables or held-
to maturity financial assets. Interest on the impaired asset
continues to be recognized. When an event occurring after the
impairment was recognized causes the amount of impairment
loss to decrease, the decrease in impairment loss is reversed
through profit or loss.
When the useful life is higher than one year, the component is
capitalized and then amortized over its estimated useful life
(3-5 years).
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are
recognized by reclassifying the losses accumulated in the
92 Financial Report
fair value reserve in equity to profit or loss. The cumulative
loss that is reclassified from equity to profit or loss is the
difference between the acquisition cost, net of any principal
repayment and amortization, and the current fair value, less
any impairment loss recognized previously in profit or loss.
Changes in cumulative impairment losses attributable to the
application of the effective interest method are reflected as
a component of interest income. If, in a subsequent period,
the fair value of an impaired available-for-sale debt security
increases and the increase can be related objectively to an
event occurring after the impairment loss was recognized,
then the impairment loss is reversed, with the amount of the
reversal recognized in profit or loss. However, any subsequent
recovery in the fair value of an impaired available-for-sale
equity security is recognized in other comprehensive income.
Equity-accounted investees
An impairment loss in respect of an equity-accounted investee
is measured by comparing the recoverable amount of the
investment with its carrying amount. An impairment loss is
recognized in profit or loss, and is reversed if there has been
a favorable change in the estimates used to determine the
recoverable amount.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets,
other than inventories and deferred tax assets (refer to
accounting policy (s)), are reviewed at each reporting date
to determine whether there is any indication of impairment.
If any such indication exists, the asset’s recoverable amount
is estimated. Goodwill and indefinite-lived intangible assets
are tested annually for impairment. An impairment loss is
recognized whenever the carrying amount of an asset or its
cash-generating unit (CGU) exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of
its fair value less cost to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and
the risks specific to the asset or CGU. Future cash flows are
based on current market conditions, historical trends as
well as future expectations. For the purpose of impairment
testing, assets are grouped together into the smallest group
of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets
or CGU’s. Goodwill acquired in a business combination is
allocated to groups of CGU’s that are expected to benefit from
the synergies of the combination.
Impairment losses are recognized in profit or loss. Impairment
losses recognized in respect of CGU’s are allocated first
to reduce the carrying amount of any goodwill allocated to
the CGU (group of CGU’s), and then to reduce the carrying
amounts of the other assets in the CGU (group of CGU’s) on
a pro rata basis.
An impairment loss recognized for goodwill shall not be
reversed. For other assets, an impairment loss is reversed
only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined,
net of depreciation or amortization, if no impairment loss had
been recognized.
(l) Assets held for sale
Non-current assets, or disposal groups comprising assets and
liabilities, that are expected to be recovered primarily through
sale rather than through continuing use are classified as held
for sale. Immediately before classification as held for sale, the
assets, or components of a disposal group, are remeasured in
accordance with the Group’s accounting policies. Thereafter
generally the assets or disposal group are measured at the
lower of their carrying amount and fair value less cost to sell. Any
impairment loss on a disposal group is allocated first to goodwill,
and then to the remaining assets and liabilities on pro rata basis,
except that no loss is allocated to inventories, financial assets,
deferred tax assets, employee benefit assets or investment
property, which continue to be measured in accordance with
the Group’s accounting policies. Impairment losses on initial
classification as held for sale and subsequent gains and losses
on remeasurement are recognized in profit or loss. Gains are not
recognized in excess of any cumulative impairment loss.
Once classified as held for sale, intangible assets and
property, plant and equipment are no longer amortized or
depreciated, and any equity-accounted investee is no longer
equity accounted.
(m) Employee benefits
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which an entity pays fixed contributions into a separate
entity and has no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution
plans are recognized as an employee benefit expense in
profit or loss in the periods during which related services are
rendered by employees. Prepaid contributions are recognized
as an asset to the extent that a cash refund or a reduction
in future payments is available. Contributions to a defined
contribution plan that are due more than 12 months after the
end of the period in which the employees render the services
are discounted to their present value.
(ii) Defined benefit plans
The Group’s net obligation in respect of defined benefit plans is
calculated separately for each plan by estimating the amount
of future benefit that employees have earned in the current
and prior periods, discounting that amount and deducting the
fair value of any plan assets.
The calculation of defined benefit obligations is performed
annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset
Financial Report 93
for the Group, the recognized asset is limited to the present
value of economic benefits available in the form of any future
refunds from the plan or reductions in future contributions to
the plan. To calculate the present value of economic benefits,
consideration is given to any applicable minimum funding
requirements.
Remeasurements of the net defined benefit liability, which
comprise actuarial gains and losses, the return of plan assets
(excluding interest) and the effect of the asset ceiling (if any,
excluding interest), are recognized immediately in OCI. The
Group determines the net interest expense (income) on the net
defined benefit liability (asset) for the period by applying the
discount rate used to measure the defined benefit obligation
at the beginning of the annual period to the then-net defined
benefit liability (asset), taking into account any changes in
the net defined benefit liability (asset) during the period as
a result of contributions and benefit payments. Net interest
expense and other expenses related to defined benefit plans
are recognized in profit and loss.
When the benefits of a plan are changed or when a plan is
curtailed, the resulting change in benefit that relates to
past service or the gain or loss on curtailment is recognized
immediately in profit or loss. The Group recognizes gains and
losses on the settlement of a defined plan when the settlement
occurs.
(iii) Other long term employee benefits
The Group’s net obligation in respect of long-term employee
benefits, other than pension plans, is the amount of future
benefit that employees have earned in return for their service
in the current and prior periods. The obligation is calculated
using the projected unit credit method and is discounted to
its present value and the fair value of any related assets is
deducted. The discount rate is the yield at the reporting date on
AA credit rated bonds that have maturity dates approximating
the terms of the Group’s obligations and that are denominated
in the currency in which the benefits are expected to be paid.
Remeasurements are recognized in profit or loss in the period
in which they arise.
(iv) Termination benefits
Termination benefits are recognized as an expense when the
Group is demonstrably committed, without realistic possibility
or withdrawal, to a formal detailed plan to either terminate
employment before the normal retirement date, or to provide
termination benefits as a result of an offer made to encourage
voluntary redundancy. Termination benefits for voluntary
redundancies are recognized as an expense if the Group has
made an offer of voluntary redundancy, it is probable that the
offer will be accepted, and the number of acceptances can
be estimated reliably. If benefits are payable more than 12
months after the reporting date, then they are discounted to
their present value.
94 Financial Report
(v) Short-term employee benefit
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognized for the amount expected to
be paid under short-term cash bonus or profit-sharing plans
if the Group has a present legal or constructive obligation to
pay this amount as a result of past service provided by the
employee, and the obligation can be estimated reliably.
(vi) Share-based payment transactions
The grant-date fair value of equity-settled share-based
payment awards granted to employees is generally recognized
as an expense, with a corresponding increase in equity, over
the vesting period of the awards. The amount recognized as an
expense is adjusted to reflect the number of awards for which
the related service and non-market performance conditions
are expected to be met, such that the amount ultimately
recognized is based on the number of awards that meet the
related service and non-market performance conditions at the
vesting date.
(n) Provisions
A provision is recognized when the Group has a legal or
constructive obligation that can be estimated reliably, as
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation.
The provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where
appropriate, the risks specific to the liability. The unwinding of
the discount is recognized as finance cost.
Restructuring
A provision for restructuring is recognized when the Group has
approved a detailed and formal restructuring plan, and the
restructuring has either commenced or has been announced
publicly. Future operating costs are not provided for.
Onerous contracts
A provision for onerous contracts is recognized when the
expected benefits to be derived by the Group from a contract
are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present
value of the lower of the expected cost of terminating
the contract and the expected net cost of continuing with
the contract. Before a provision is established, the Group
recognizes any impairment loss on the assets associated with
that contract.
(o) Revenue
(i) Pool Revenues
Aggregated revenue recognized on a daily basis from vessels
operating on voyage charters in the spot market and on Contract
of Affreightment (“COA”) within the pool is converted into an
aggregated net revenue amount by subtracting aggregated
voyage expenses (such as fuel and port charges) from gross
voyage revenue. These aggregated net revenues are combined
with aggregate time charter revenues to determine aggregate
pool Time Charter Equivalent revenue (“TCE”). Aggregate pool
TCE revenue is then allocated to pool partners in accordance
with the allocated pool points earned for each vessel that
recognizes each vessel’s earnings capacity based on its cargo,
capacity, speed and fuel consumption performance and actual
on hire days. The TCE revenue earned by our vessels operated
in the pools is equal to the pool point rating of the vessels
multiplied by time on hire, as reported by the pool manager.
(ii) Time - and bareboat charters
Revenues from time charters and bareboat charters are
accounted for as operating leases and are recognized on a
straight line basis over the periods of such charters, as service
is performed.
The Group does not recognize time charter revenues during
periods that vessels are offhire.
(iii) Spot voyages
Within the shipping industry, there are two methods used
to account for voyage revenues: rateably over the estimated
length of each voyage and completed voyage.
The recognition of voyage revenues rateably on a daily basis
over the estimated length of each voyage is the most prevalent
method of accounting for voyage revenues and the method
used by the Group and the pools in which we participate. Under
each method, voyages may be calculated on either a load-to-
load or discharge-to-discharge basis. In applying its revenue
recognition method, management believes that the discharge-
to-discharge basis of calculating voyages more accurately
estimates voyage results than the load-to-load basis. Since,
at the time of discharge, management generally knows the
next load port and expected discharge port, the discharge-
to-discharge calculation of voyage revenues can be estimated
with a greater degree of accuracy. Euronav does not begin
recognizing voyage revenue until a charter has been agreed
to by both the Group and the customer, even if the vessel has
discharged its cargo and is sailing to the anticipated load port
on its next voyage because it is only at this time the charter
rate is determinable for the specified load and discharge ports
and collectability is reasonably assured.
No revenue is recognized if there are significant uncertainties
regarding recovery of the consideration due and associated
costs.
(p) Gain and losses on disposal of vessels
In view of their importance the Group reports capital gains
and losses on the sale of vessels as a separate line item in
the consolidated statement of profit or loss. For the sale of
vessels, transfer of risks and awards usually occurs upon
delivery of the vessel to the new owner.
(q) Leases
Lease payments
Payments made under operating leases are recognized in the
income statement on a straight-line basis over the term of the
lease. Lease incentives received are recognized as an integral
part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are
apportioned between the finance expense and the reduction
of the outstanding liability. The finance expense is allocated to
each period during the lease term so as to produce a constant
period rate of interest on the remaining balance of the liability.
(r) Finance income and finance cost
Net financing costs comprise interest payable on borrowings
calculated using the effective interest rate method, dividends
on redeemable preference shares, interest receivable on
funds invested, dividend income, foreign exchange gains and
losses, and gains and losses on hedging instruments that
are recognized in the consolidated statement of profit or loss
(refer to accounting policy (h)).
Interest income is recognized in the income statement as it
accrues, taking into account the effective yield on the asset.
Dividend income is recognized in the consolidated statement
of profit or loss on the date that the dividend is declared.
The interest expense component of finance lease payments
is recognized in the consolidated statement of profit or loss
using the effective interest rate method.
(s) Income tax
Income tax expense comprises current and deferred tax.
Current tax and deferred tax are recognized in profit or loss
except to the extent that it relates to a business combination, or
items recognized directly in equity or in other comprehensive
income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantially enacted
at the balance sheet date, and any adjustment to tax payable
in respect of previous years.
Deferred tax is recognized using the balance sheet method,
in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for: the initial recognition of
goodwill, the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit, and differences
relating to investments in subsidiaries to the extent that they
will probably not reverse in the foreseeable future. The amount
of deferred tax recognized, is based on the expected manner of
realization or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantially enacted at
the balance sheet date. Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset current tax
Financial Report 95
liabilities and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity.
A deferred tax asset is recognized only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilized. Deferred tax assets are
reduced to the extent that it is no longer probable that the
related tax benefit will be realized.
In application of an IFRIC agenda decision on IAS 12 Income
taxes, tonnage tax is not accounted for as income taxes in
accordance with IAS 12 and is not presented as part of income
tax expense in the income statement but is shown as an
administrative expense under the heading Other operating
expenses.
(t) Segment reporting
An operating segment is a component of the Group that engages
in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate
to transactions with any of the Group’s other components. The
Group distinguishes two segments: the operation of crude
oil tankers on the international markets and the floating
storage and offloading operations (FSO/FPSO). The Group’s
internal organizational and management structure does not
distinguish any geographical segments.
(u) Discontinued operations
A discontinued operation is a component of the Group’s
business that represents a separate major line of business or
geographical area of operations that has been disposed of or
is held for sale, or is a subsidiary acquired exclusively with
a view to resale. Classification as a discontinued operation
occurs upon disposal or when the operation meets the criteria
to be classified as held for sale, if earlier. When an operation
is classified as a discontinued operation, the comparative
statement of profit or loss is represented as if the operation
had been discontinued from the start of the comparative
period.
(v) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not yet effective for the year ended 31
December 2015, and have not been applied in preparing these
consolidated financial statements:
IFRS 9 Financial Instruments published in July 2014 replaces
the existing guidance in IAS 39 Financial Instruments:
Recognition and Measurement. IFRS 9 includes revised
guidance on the classification and measurement of financial
instruments, including a new expected credit loss model
for calculating impairment on financial assets, and the new
general hedge accounting requirements, which align hedge
accounting more closely with risk management. It also
carries forward the guidance on recognition and derecognition
of financial instruments from IAS 39. IFRS 9 is effective for
96 Financial Report
annual periods beginning on or after 1 January 2018, with
early adoption permitted. This new standard has not yet been
endorsed by the EU. The Group does not plan to early adopt
this standard and the extent of the impact has not yet been
determined.
IFRS 15 Revenue from Contracts with Customers establishes
a comprehensive framework for determining whether, how
much and when revenue is recognized. It replaces existing
revenue recognition guidance, including IAS 18 Revenue, IAS
11 Construction Contracts and IFRIC 13 Customer Loyalty
Programmes. IFRS 15 is effective for the annual reports
beginning on or after 1 January 2018, with early adoption
permitted. This standard has not yet been endorsed by the EU.
The Group is assessing the potential impact on its consolidated
financial statements resulting from the application of IFRS 15.
Annual Improvements to IFRS 2012-2014 cycle is a collection
of minor improvements to four existing standards. This
collection, which becomes mandatory for the Group’s 2016
consolidated financial statements, is not expected to have a
material impact on our consolidated financial statements.
Accounting for Acquisitions of Interests in Joint Operations
(Amendments to IFRS 11) determines that when an entity
acquires an interest in a joint operation that is a business, as
defined in IFRS 3, it shall apply all of the principles on business
combinations accounting in IFRS 3, and other IFRSs, that do
not conflict with the guidance in this IFRS. The amendments
which become mandatory for the Group’s 2016 consolidated
financial statements, are not expected to have a material
impact on the Group’s consolidated financial statements.
Clarification of Acceptable Methods of Depreciation and
Amortization (Amendments to IAS 16 and IAS 38) emphasizes
that a depreciation method that is based on revenue that is
generated by an activity that includes the use of an asset
is not appropriate for property, plant and equipment. For
intangible assets, only in limited circumstances revenue-
based amortization can be permitted. The amendments which
become mandatory for the Group’s 2016 consolidated financial
statements, are not expected to have a material impact on the
Group’s consolidated financial statements.
Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (Amendments to IFRS 10 and IAS
28) provides guidance on the recognition of the gain or loss
when accounting for the sale or contribution of a subsidiary
to an associate or joint venture. The amendments which
become mandatory for the Group’s 2016 consolidated financial
statements, are not expected to have a material impact on the
Group’s consolidated financial statements.
The disclosure initiative (Amendments to IAS 1) are designed
to further encourage companies to apply professional
judgement in determining what information to disclose in
their financial statements. The narrow-focus amendments
to IAS 1 Presentation of Financial Statements clarify, rather
than significantly change, existing IAS 1 requirements. The
amendments relate to the following: materiality; order of the
notes; subtotals; accounting policies; and disaggregation. The
amendments are effective for annual periods beginning on
or after 1 January 2016, with earlier adoption permitted. The
amendments are not expected to have a material impact on
the Group’s consolidated financial statements.
Financial Report 97
Visie en Missie 97
Notes to the consolidated financial statements for the year ended
31 December 2015
Note 1 - Segment reporting
Note 2 - Assets and liabilities held for sale and discontinued
operations
Note 3 - Revenue
Note 4 - Expenses
for shipping activities and other
expenses from operating activities
Note 5 - Net finance expense
Note 6 - Income tax benefit (expense)
Note 7 - Property, plant and equipment
Note 8 - Deferred tax assets and liabilities
Note 9 - Non-current receivables
Note 10 - Trade and other receivables - current
Note 11 - Cash and cash equivalents
Note 12 - Equity
Note 13 - Earnings per share
Note 14 - Interest-bearing loans and borrowings
Note 15 - Non-current other payables
Note 16 - Employee benefits
Note 17 - Trade and other payables - current
Note 18 - Financial instruments - market and other risks
Note 19 - Operating leases
Note 20 - Provisions & contingencies
Note 21 - Related parties
Note 22 - Share-based payment arrangements
Note 23 - Group entities
Note 24 - Equity-accounted investees
Note 25 - Subsidiaries
Note 26 - Major exchange rates
Note 27 - Audit fees
Note 28 - Subsequent events
Note 29 - Statement on the true and fair view of the
consolidated financial statements and the fair
overview of the management report
98 Financial Report
98 Visie en Missie
NOTE 1 - SEGMENT REPORTING
The Group distinguishes two operating segments: the
operation of crude oil tankers on the international markets
(tankers) and the floating production, storage and offloading
in
operations (FSO/FPSO). These two divisions operate
completely different markets, where in the latter the assets
are tailor-made or converted for specific long-term projects.
The tanker market requires a different marketing strategy as
this is considered a very volatile market, contract duration is
often less than two years and the assets are to a big extent
standardized. The segment profit or loss figures and key assets
as set out below are presented to the Executive Committee
on at least a quarterly basis to help the key decision makers
in evaluating the respective segments. It was decided by
the Chief Operating Decision Makers (CODM) to present the
figures per segment based on proportionate consolidation for
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
the joint ventures and not by applying equity accounting. The
reconciliation between the figures of all segments combined
on the one hand and with the consolidated statements of
financial position and profit or loss on the other hand is
presented in a separate column Equity-accounted investees.
The Group has one client in the tankers segment that
represented 11% of the Tankers segment total revenue in 2015
(2014: one client which represented 11%). All the other clients
represent less than 10% of total revenues of the tankers
segment.
The Group’s internal organizational and management structure
does not distinguish any geographical segments.
(in thousands of USD except per share amounts)
TANKERS
31 DECEMBER 2015
LESS:
EQUITY-
ACCOUNTED
INVESTEES
FSO
TOTAL
TANKERS
31 DECEMBER 2014
LESS:
EQUITY-
ACCOUNTED
INVESTEES
FSO
TOTAL
ASSETS
TOTAL CURRENT ASSETS
Vessels
Assets under construction
Other tangible assets
Prepayments
Intangible assets
Receivables
Investments in equity accounted
investees
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
389,368
26,944
(41,260)
375,052
551,258
37,510
(50,913)
537,855
2,448,192
93,890
1,048
2
238
222,692
204,241
-
-
-
-
7,371
(364,397) 2,288,036
93,890
1,048
2
238
259,908
-
-
-
-
29,845
2,428,122
-
1,226
16,601
29
266,071
222,312
-
-
-
-
5,602
(392,100) 2,258,334
-
1,226
16,601
29
258,447
-
-
-
-
(13,226)
1,211
-
20,426
21,637
1,027
-
16,305
17,332
935
2,768,208
3,157,576
182
211,794
238,738
935
(182)
6,536
(314,308) 2,665,694 2,719,612
(355,568) 3,040,746 3,270,870
EQUITY AND LIABILITIES
TOTAL EQUITY
TOTAL CURRENT LIABILITIES
1,946,288
190,211
(40,540)
15,994
1 1,905,749 1,553,695
317,849
179,507
(26,698)
Bank and other loans
Convertible and other Notes
Other payables
Deferred tax liabilities
Employee benefits
Amounts due to equity-accounted
joint ventures
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
1,018,013
-
590
-
2,038
259,684
-
3,600
-
-
(325,271)
-
(3,600)
-
-
952,426
-
590
-
2,038
1,164,975
231,373
489
-
2,108
317,451
-
6,832
-
-
(394,400) 1,088,026
231,373
489
-
2,108
-
(6,832)
-
-
-
-
-
-
-
-
5,880
5,880
436
1,021,077
3,157,576
-
263,284
238,738
436
381
-
(328,871)
955,490 1,399,326
(355,568) 3,040,746 3,270,870
-
324,283
265,424
-
381
(395,352) 1,328,257
(439,934) 3,096,360
Financial Report 99
-
227,914
265,424
-
6,536
(389,021) 2,558,505
(439,934) 3,096,360
(80,987)
22,128
- 1,472,708
295,395
(44,582)
NOTE 1 - SEGMENT REPORTING (CONTINUED)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(in thousands of USD except per share amounts)
2015
2014
TANKERS
FSO
LESS:
EQUITY-
ACCOUNTED
INVESTEES
TOTAL TANKERS
FSO
LESS:
EQUITY-
ACCOUNTED
INVESTEES
TOTAL
898,495
64,504
(116,492)
846,507
510,973
64,178
(101,166)
473,985
-
-
13,302
15,315
-
(2,193)
13,122
808
65,312
(180)
(116,672)
7,426
867,235
11,685
537,973
323
64,501
(597)
(103,956)
11,411
498,518
(473)
(10,074)
-
13,132
17,250
-
(71,237)
(153,718)
(25,849)
(136,135)
(131,676)
(35,664)
(471)
(11,636)
-
18,303
19,223
-
(118,303)
(124,089)
(35,664)
-
-
-
-
(8,002)
-
-
(7,416)
-
-
-
-
-
(7,416)
(221,399)
(50)
(18,071)
-
29,314
-
(210,156)
(50)
(171,920)
(20)
(18,071)
-
29,057
-
(160,934)
(20)
(46,433)
(283)
465
(46,251)
(40,735)
(184)
354
(40,565)
SHIPPING REVENUE
Revenue
Gains on disposal of vessels/other
tangible assets
Other operating income
TOTAL SHIPPING REVENUE
OPERATING EXPENSES
Voyage expenses and commissions
Vessel operating expenses
Charter hire expenses
Losses on disposal of vessels/
other tangible assets
Impairment on non-current assets
held for sale
Depreciation tangible assets
Depreciation intangible assets
General and administrative
expenses
13,302
6,798
918,595
(83,896)
(160,894)
(25,849)
(8,002)
TOTAL OPERATING EXPENSES
(546,523)
(28,901)
60,161
(515,263)
(523,566)
(30,362)
66,937
(486,991)
RESULT FROM OPERATING
ACTIVITIES
372,072
36,411
(56,511)
351,972
14,407
34,139
(37,019)
11,527
Finance income
Finance expenses
NET FINANCE EXPENSES
3,313
(52,590)
(49,277)
22
(3,663)
(3,641)
(23)
5,311
5,288
3,312
(50,942)
(47,630)
2,625
(98,642)
(96,017)
28
(4,714)
(4,686)
(36)
7,386
7,350
2,617
(95,970)
(93,353)
Share of profit (loss) of equity
accounted investees
(net of income tax)
PROFIT (LOSS) BEFORE INCOME
TAX
185
-
51,407
51,592
617
-
29,669
30,286
322,980
32,770
184
355,934
(80,993)
29,453
-
(51,540)
Income tax expense
(5,633)
184
(184)
(5,633)
5,743
-
PROFIT (LOSS) FOR THE PERIOD
317,347
32,954
-
350,301
(75,250)
29,453
-
-
5,743
(45,797)
Attributable to:
Owners of the Company
317,347
32,954
-
350,301
(75,250)
29,453
-
(45,797)
100 Financial Report
NOTE 1 - SEGMENT REPORTING (CONTINUED)
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of USD except per share amounts)
2015
2014
TANKERS
FSO
LESS:
EQUITY-
ACCOUNTED
INVESTEES
TOTAL TANKERS
FSO
LESS:
EQUITY-
ACCOUNTED
INVESTEES
TOTAL
Net cash from operating activities
Net cash from (used in) investing
activities
Net cash from (used in) financing
activities
505,821
58,747
(114,036)
450,532
19,978
40,013
(45,209)
14,782
(248,770)
-
42,897
(205,873)
(1,007,928)
-
(15,079)
(1,023,007)
(350,429)
(20,557)
5,671
(365,315)
1,168,516
(55,552)
76,057 1,189,021
Capital expenditure
Impairment losses
Impairment losses reversed
(361,754)
-
-
1,611
-
-
(360,143)
-
-
(1,178,051)
-
-
-
-
-
-
-
905 (1,177,146)
-
-
-
-
Financial Report 101
Visie en Missie 101
NOTE 2 - ASSETS AND LIABILITIES HELD FOR SALE
AND DISCONTINUED OPERATIONS
ASSETS HELD FOR SALE
The assets held for sale can be detailed as follows:
(in thousands of USD)
2015
2014
Vessels
Of which in tankers segment
Of which in FSO segment
24,195
24,195
-
89,000
89,000
-
(ESTIMATED)
SALE PRICE
BOOK
VALUE
ASSET HELD
FOR SALE
EXPECTED
GAIN
EXPECTED
LOSS
AT 1 JANUARY 2014
-
-
21,510
Assets transferred to assets held for sale
Olympia
Antarctica
Assets sold from assets held for sale
Luxembourg
Olympia
AT 31 DECEMBER 2014
AT 1 JANUARY 2015
Assets transferred to assets held for sale
Famenne
Assets sold from assets held for sale
Antarctica
91,560
93,856
89,000
89,000
-
-
-
-
(2,560)
(4,856)
21,510
89,000
(21,510)
(89,000)
6,390
2,380
-
-
-
-
89,000
8,770
(7,416)
89,000
-
89,000
89,000
27,900
91,380
-
-
38,016
24,195
24,195
13,821
91,065
89,000
(89,000)
2,065
-
-
-
-
AT 31 DECEMBER 2015
-
-
24,195
15,886
The Antarctica (2009 – 315,981 dwt) was delivered to its new
owner on January 15, 2015, earlier than expected, resulting in
an increased sale price and a corresponding gain on disposal
of assets of USD 2.1 million which has been recorded in the
first quarter of 2015.
The Famenne (2001 - 298,412 dwt) was sold on January 15,
2016 for a net selling price of USD 38.0 million. The capital gain
on that sale of USD 13.8 million will be recorded at delivery.
The vessel is expected to be delivered to its new owner in the
course of the first quarter of 2016.
DISCONTINUED OPERATIONS
As per December 31, 2015 and per December 31, 2014 the Group had no operations that meet the criteria of a discontinued
operation.
102 Financial Report
NOTE 3 - REVENUE
(in thousands of USD)
Pool revenue
Spot voyages
Time charters
TOTAL REVENUE
NOTE
2015
2014
-
-
19
455,617
264,799
126,091
149,624
192,243
132,118
846,507
473,985
For the accounting treatment of revenue, we refer to the accounting policies (o) - Revenue.
The increase in revenue is mainly related to the increase in the fleet size and improvement of the shipping market in general.
Spot voyages
Time charters
Pool
2015
2014
Financial Report 103
Visie en Missie 103
NOTE 4 - EXPENSES FOR SHIPPING ACTIVITIES AND OTHER EXPENSES FROM
OPERATING ACTIVITIES
VOYAGE EXPENSES AND COMMISSIONS
(in thousands of USD)
Voyage related expense
Commissions paid
NOTE
2015
2014
-
-
(62,787)
(8,450)
(111,238)
(7,065)
TOTAL VOYAGE EXPENSES AND COMMISSIONS
(71,237)
(118,303)
The majority of voyage expenses are port costs, bunkers and agent fees paid to operate the vessels on the spot market. These
expenses decreased in 2015 compared to 2014 mainly due to lower bunker prices.
VESSEL OPERATING EXPENSES
(in thousands of USD)
Operating expenses
Insurance
NOTE
2015
2014
-
-
(142,035)
(11,683)
(112,834)
(11,255)
TOTAL VESSEL OPERATING EXPENSES
(153,718)
(124,089)
The operating expenses relate mainly to the crewing, technical and other costs to operate tankers. In 2015 these expenses
increased compared to 2014, which is mainly related to a higher number of vessels operated by the Group following the delivery
of the vessels acquired in 2014.
CHARTER HIRE EXPENSES
(in thousands of USD)
Charter hire
Bare boat hire
NOTE
2015
2014
19
19
(25,849)
-
(32,080)
(3,584)
TOTAL CHARTER HIRE EXPENSES
(25,849)
(35,664)
The decrease in charter hire is mainly due to the three time chartered-in VLCCs, the Maersk Hojo, the Maersk Hirado, and the
Maersk Hakone which the Group acquired in 2014 and the redelivery of one time charter-in VLCC, the Island Splendor, to its
owners on May 18, 2014. The decrease in bareboat charter-hire expenses is entirely attributable to the bareboat contract for the
Suezmax Cap Isabella, which ended on October 9, 2014.
GENERAL AND ADMINISTRATIVE EXPENSES
(in thousands of USD)
NOTE
2015
2014
Wages and salaries
Social security costs
Provision for employee benefits
Equity-settled share-based payments
Other employee benefits
EMPLOYEE BENEFITS
Administrative expenses
Claims
Provisions
-
-
16
22
-
-
-
-
(12,554)
(2,379)
(108)
(1,637)
(3,715)
(20,392)
(25,749)
(19)
(91)
(10,840)
(2,495)
(85)
(3,994)
(3,075)
(20,489)
(19,228)
(8)
(840)
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES
(46,251)
(40,565)
Average number of full time equivalents
132.20
113.32
104 Financial Report
NOTE 5 - NET FINANCE EXPENSE
The administrative expenses include amongst other director fees, office rental, consulting- and audit fees and Tonnage Tax. Due
to the increase in the number of owned vessels in 2015, administrative expenses relating to the Tankers International Pool and
Tonnage Tax increased. Because of additional FTE’s in 2015, wages and salaries increased accordingly in 2015 compared to 2014.
RECOGNIZED IN PROFIT OR LOSS
(in thousands of USD)
Interest income
Foreign exchange gains
FINANCE INCOME
Interest expense on financial liabilities measured at amortized cost
Fair value adjustment on interest rate swaps
Amortization other Notes
Other financial charges
Foreign exchange losses
FINANCE EXPENSE
2015
2014
208
3,103
3,312
(38,246)
-
(4,127)
(4,355)
(4,214)
(50,942)
487
2,131
2,617
(57,948)
-
(31,878)
(3,829)
(2,315)
(95,970)
NET FINANCE EXPENSE RECOGNIZED IN PROFIT OR LOSS
(47,630)
(93,353)
Interest expense on financial liabilities measured at amortized cost decreased in 2015, compared to 2014 which is primarily
attributable to (i) the redemption of the unsecured convertible notes, (ii) the early repayment of the USD 235.5 million seven-year
bond and (iii) the conversion of the remaining 30 perpetual convertible preferred equity securities, which all took place in the
first quarter of 2015 and resulted in a decrease of USD 20.2 million. This decrease was partially offset with an increase in the
interest expenses related to bank loans of USD 1.8 million. Amortization other Notes decreased in 2015, compared to 2014 which
is primarily due to the repayment of the USD 235.5 million bond, issued to partly finance the acquisition of the Maersk Acquisition
Vessels. As the bond was issued below par and in accordance with IFRS, the Group amortized USD 31.9 million during the year
ended December 31, 2014 and a further USD 4.1 million was amortized in the first quarter of 2015.
The above finance income and expenses include the following in respect of assets (liabilities) not at fair value through profit or loss:
Total interest income on financial assets
Total interest expense on financial liabilities
Total other financial charges
RECOGNIZED DIRECTLY IN EQUITY
(in thousands of USD)
Foreign currency translation differences for foreign operations
Cash flow hedges - effective portion of changes in fair value
Cash flow hedges - reclassified to profit or loss
NET FINANCE EXPENSE RECOGNIZED DIRECTLY IN EQUITY
Attributable to:
Owners of the Company
NET FINANCE EXPENSE RECOGNIZED DIRECTLY IN EQUITY
Recognized in:
Translation reserve
Hedging reserve
208
(42,372)
(4,355)
487
(89,826)
(3,829)
2015
2014
(429)
-
-
(429)
(429)
(429)
(429)
-
(567)
1,291
-
724
724
724
(567)
1,291
Financial Report 105
NOTE 6 - INCOME TAX BENEFIT (EXPENSE)
(in thousands of USD)
Current tax
Current period
TOTAL CURRENT TAX
Deferred tax
Recognition of unused tax losses/(use of tax losses)
Other
TOTAL DEFERRED TAX
TOTAL TAX BENEFIT/(EXPENSE)
RECONCILIATION OF EFFECTIVE TAX
Profit (loss) before tax
Tax at domestic rate
Effects on tax of:
Tax exempt profit / loss
Tax adjustments for previous years
Loss for which no DTA (°) has been recognized
Use of previously unrecognized tax losses
Non-deductible expenses
Tonnage Tax regime
Effect of share of profit of equity-accounted investees
Effects of tax regimes in foreign jurisdictions
2015
2014
(98)
(98)
(5,450)
(85)
(5,535)
(5,633)
(9)
(9)
5,507
245
5,752
5,743
2015
2014
355,934
(51,540)
(33.99%)
(120,982)
(33.99%)
17,518
(144)
17
(4,811)
15,668
(5,225)
91,334
17,536
974
3,039
-
(17,926)
-
(193)
(6,590)
10,294
(400)
TOTAL TAXES
(1.58%)
(5,633)
(11.14%)
5,743
In application of an IFRIC agenda decision on IAS 12 income taxes, tonnage tax is not accounted for as income taxes in accordance with
IAS 12 and is not presented as part of income tax expense in the consolidated statement of profit or loss but has been shown as an
administrative expense under the heading General and administrative expenses (see Note 4).
° DTA= Deferred Tax Asset
106 Financial Report
106 Visie en Missie
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
(in thousands of USD)
AT 1 JANUARY 2014
Cost
Depreciation & impairment losses
NET CARRYING AMOUNT
Acquisitions
Disposals and cancellations
Depreciation charges
Transfer to assets held for sale
Transfers
Translation differences
BALANCE AT 31 DECEMBER 2014
AT 1 JANUARY 2015
Cost
Depreciation & impairment losses
NET CARRYING AMOUNT
Acquisitions
Disposals and cancellations
Depreciation charges
Transfer to assets held for sale
Transfers
Translation differences
BALANCE AT 31 DECEMBER 2015
AT 31 DECEMBER 2015
Cost
Depreciation & impairment losses
NET CARRYING AMOUNT
VESSELS
VESSELS
UNDER
CONSTRUCTION
OTHER
TANGIBLE
ASSETS
PREPAYMENTS
TOTAL PPE
2,424,978
(990,178)
1,434,800
1,053,939
-
(160,590)
(185,415)
115,600
-
2,258,334
3,342,607
(1,084,273)
2,258,334
257,706
(10,681)
(209,728)
(24,195)
16,600
-
2,288,036
3,477,605
(1,189,569)
2,288,036
-
-
-
-
-
-
-
-
-
-
-
-
-
93,890
-
-
-
-
-
93,890
93,890
-
93,890
2,487
(1,854)
633
987
(2)
(344)
-
-
(48)
10,000
-
10,000
122,201
-
-
-
(115,600)
2,437,465
(992,032)
1,445,433
1,177,127
(2)
(160,934)
(185,415)
-
-
(48)
1,226
16,601
2,276,161
2,997
(1,771)
1,226
288
(3)
(428)
-
-
(35)
1,048
2,482
(1,434)
1,048
16,601
-
16,601
8,001
(8,000)
-
-
(16,600)
-
2
3,362,205
(1,086,044)
2,276,161
359,885
(18,684)
(210,156)
(24,195)
-
(35)
2,382,976
2
-
2
3,573,979
(1,191,003)
2,382,976
• In 2015, the TI Hellas, Hakata, Cap Georges, Cap Laurent,
Cap Jean, Cap Romuald, Devon, Hakone, Sara and Hirado
have been dry-docked. The cost of planned repairs and
maintenance is capitalized and included under the heading
acquisitions
• On February 26, 2015 and April 9, 2015 respectively, the
Group took delivery of the last two VLCC Vessels, the Hirado
and the Hakata, as part of the acquisition of four modern
Japanese-built VLCC vessels announced on 8 July 2014.
• In June 2015, the Group entered into an agreement for
the acquisition through resale of four VLCCs which are
completing construction at Hyundai Heavy Industries for
an aggregate purchase price of USD 384 million or USD 96
million per unit. The first vessel, the Antigone, was delivered
on September 25, 2015. The second vessel, the Alice, was
delivered on January 26, 2016 (see Note 28). The other two
vessels (the Alex and Anne) are due to be delivered at the
end of March 2016 and May 2016 respectively. In addition
and against the payment of an option fee of an aggregate
amount of USD 8.0 million, the seller also granted the
Group an option to acquire up to a further four VLCCs with
delivery late 2016 and 2017. The option was not lifted (see
Disposal of assets - Gain/Losses below).
Financial Report 107
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
DISPOSAL OF ASSETS - GAIN/LOSSES
(in thousands of USD)
NOTE ACQUISITIONS
SALE PRICE
BOOK VALUE
GAIN
LOSS
-
-
-
-
-
27,900
89,000
91,380
89,000
4,329
-
21,510
91,560
89,000
93,855
-
-
6,390
-
2,380
-
4,329
23
13,122
-
(2,560)
-
(4,856)
-
-
(7,416)
ACQUISITIONS
SALE PRICE
BOOK VALUE
GAIN
LOSS
-
-
-
91,065
21,825
-
-
89,000
10,682
-
-
2,065
11,143
94
13,302
-
-
(8,002)
(8,002)
• The loss on disposal of assets in 2015 relates mainly to
the option fee of USD 8.0 million (see above). After careful
consideration, the Group has decided not to exercise the
option to purchase four VLCCs. As a consequence, the
value of these options was written off in the third quarter
of 2015.
Luxembourg - Sale
Olympia - Transfer to assets held for sale
Olympia - Sale
Antarctica - Transfer to assets held for sale
Cap Isabella - Sale
Other
AT DECEMBER 31, 2014
Antarctica - Sale
Cap Laurent - Sale
Other
AT DECEMBER 31, 2015
2
2
2
2
-
-
2
-
-
• The Antarctica was delivered to its new owner on January
15, 2015, earlier than expected, resulting in an increased
sale price and a corresponding gain on disposal of assets
of USD 2.1 million which has been recorded in the first
quarter of 2015.
• On November 11, 2015 the Company sold the Suezmax
Cap Laurent (1998 - 146,145 dwt), for a net sale price of
USD 21.8 million. The capital gain on that sale of USD 11.1
million was recorded in the fourth quarter of 2015. The
vessel was delivered to its new owner on 26 November
2015.
108 Financial Report
108 Visie en Missie
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Impairment
Tankers
Euronav defines its cash generating unit as a single vessel,
unless such vessel is operated in a pool, in which case
such vessel, together with the other vessels in the pool, are
collectively treated as a cash generating unit.
Although charter rates recovered during 2015, second
hand vessels values remained low and as such the Group
has performed an impairment test for tankers whereby
the carrying amount of an asset or CGU is compared to its
recoverable amount, which is the greater of its value in use
and its fair value less cost to sell. In assessing value in use, the
following assumptions were used:
tanker fleet (2014: USD 952.0 million), and when using one-
year historical charter rates in this impairment analysis, the
impairment analysis indicates that no impairment is required
for the tanker fleet (2014: USD 103.7 million).
FSO
For FSOs the impairment assessment has been based on a
value in use calculation to estimate the recoverable amount
from the vessel. This method is chosen as there is no efficient
market for transactions of FSO vessels as each vessel is often
purposely built for specific circumstances. In assessing value
in use, the following assumptions were used:
• Weighted Average Cost of Capital (‘WACC’) of 6.01%
(2014: 5.72%)
• ten-year historical average spot freight rates are used as
• 25-year useful life with residual value equal to zero
forecast charter rates
• Weighted Average Cost of Capital (‘WACC’) of 6.01%
(2014: 5.72%)
• 20-year useful life with residual value equal to zero
Although management believes that the assumptions used to
evaluate potential impairment are reasonable and appropriate,
such assumptions are subject to judgment. The impairment
test did not result in a requirement to record an impairment
loss in 2015. Even with an increase of the WACC of 3%, there
was no need to record an impairment loss in 2015.
Recognizing that the transportation of crude oil and petroleum
products is cyclical and subject to significant volatility based
on factors beyond Euronav’s control, Euronav believes the
use of estimates based on the ten-year historical average
rates calculated as of the reporting date to be reasonable as
historically it is the most appropriate reflection of a typical
shipping cycle. When using five-year historical charter rates
in this impairment analysis, the impairment analysis indicates
an impairment in a total amount of USD 123.3 million for the
This assessment did not result in a requirement to record an
impairment loss in 2015. Even with an increase of the WACC
of 3%, there was no need to record an impairment loss in
2015. The value in use calculation for FSOs is based on the
remaining useful life of the vessels as of the reporting date,
and is based on fixed daily rates as well as management’s best
estimate of daily rates for future periods. The FSO Asia and the
FSO Africa are on a timecharter contract to Maersk Oil Qatar
until July 22, 2017 and September 22, 2017, respectively.
Security
All tankers financed are subject to a mortgage to secure bank
loans (see Note 14).
Vessels on order or under construction
The Group has three vessels under construction as at
December 31, 2015 for an aggregate amount of USD
93.9 million (2014: 0). The amounts presented within “Vessels
under construction” relate to the three remaining vessels to be
delivered from Hyundai Heavy Industries, as discussed above.
Financial Report 109
Visie en Missie 109
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Capital commitment
As at December 31, 2015 the Group’s total capital commitment amounts to USD 195.9 million (2014: USD 149.4 million).
These can be detailed as follows:
(in thousands of USD)
AS AT DECEMBER 31, 2014 PAYMENTS SCHEDULED FOR
Commitments in respect of VLCCs
Commitments in respect of Suezmaxes
Commitments in respect of FSOs
TOTAL
TOTAL
149,400
-
-
149,400
2015
149,400
-
-
149,400
2016
-
-
-
-
2017
-
-
-
-
(in thousands of USD)
AS AT DECEMBER 31, 2015 PAYMENTS SCHEDULED FOR
Commitments in respect of VLCCs
Commitments in respect of Suezmaxes
Commitments in respect of FSOs
TOTAL
TOTAL
195,910
-
-
195,910
2016
195,910
-
-
195,910
2017
-
-
-
-
2018
-
-
-
-
110 Financial Report
110 Visie en Missie
NOTE 8 - DEFERRED TAX ASSETS AND LIABILITIES
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
(in thousands of USD)
ASSETS
LIABILITIES
Provisions
Employee benefits
Unused tax losses & tax credits
Offset
BALANCE AT DECEMBER 31, 2014
Provisions
Employee benefits
Unused tax losses & tax credits
Offset
BALANCE AT DECEMBER 31, 2015
238
52
6,246
6,536
-
6,536
169
23
743
935
-
935
-
-
-
-
-
-
-
-
-
-
-
-
NET
238
52
6,246
6,536
169
23
743
935
Unrecognized deferred tax assets and liabilities
Deferred tax assets and liabilities have not been recognized in respect of the following items:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Deductible temporary differences
Taxable temporary differences
Tax losses & tax credits
Offset
TOTAL
ASSETS
275
-
109,797
110,072
(21,220)
88,852
LIABILITIES
-
(21,220)
-
(21,220)
21,220
-
ASSETS
1,332
-
132,689
134,021
(18,548)
115,473
LIABILITIES
-
(18,548)
-
(18,548)
18,548
-
The unrecognized deferred tax assets in respect of tax losses
and tax credits are entirely related to tax losses carried
forward,
investment deduction allowances and excess
dividend received deduction. These unrecognized tax losses
and tax credits have no expiration date.
A deferred tax asset (‘DTA’) is recognized for unused tax
losses and tax credits carried forward, to the extent that it
is probable that future taxable profits will be available. The
Group considers future taxable profits as probable when it is
more likely than not that taxable profits will be generated in
the foreseeable future. When determining whether probable
future taxable profits are available the probability threshold is
applied to portions of the total amount of unused tax losses or
tax credits, rather than the entire amount.
Given the nature of the tonnage tax regime, the Group has a
substantial amount of unused tax losses and tax credits for
which no future taxable profits are probable and therefore no
DTA has been recognized.
The unrecognized tax liabilities in respect of taxable temporary
differences relate to tax liabilities in respect of non distributed
reserves of the Group that will be taxed when distributed.
No deferred tax liability has been recognized because the
Group controls whether the liability will be incurred and
management is satisfied that the liability will not be incurred
in the foreseeable future.
Financial Report 111
NOTE 8 - DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
Movement in deferred tax balances during the year
(in thousands of USD)
Provisions
Employee benefits
Unused tax losses & tax credits
TOTAL
Provisions
Employee benefits
Unused tax losses & tax credits
TOTAL
BALANCE AT
1 JAN. 2014
RECOGNIZED
IN INCOME
RECOGNIZED
IN EQUITY
TRANSLATION
DIFFERENCES
BALANCE AT
31 DEC. 2014
-
52
828
880
238
7
5,507
5,752
-
-
-
-
-
(7)
(89)
(96)
238
52
6,246
6,536
BALANCE AT
1 JAN. 2015
238
52
6,246
6,536
RECOGNIZED
IN INCOME
(61)
(24)
(5,450)
(5,535)
RECOGNIZED
IN EQUITY
-
-
-
-
TRANSLATION
DIFFERENCES
(8)
(5)
(53)
(66)
BALANCE AT
31 DEC. 2015
169
23
743
935
NOTE 9 - NON-CURRENT RECEIVABLES
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Shareholders loans to joint ventures
Other non-current receivables
Investment
TOTAL NON-CURRENT RECEIVABLES
259,229
678
1
259,908
257,771
675
1
258,447
Please refer to Note 24 for more information on the Shareholders loans to joint ventures.
THE MATURITY DATE OF THE NON-CURRENT RECEIVABLES IS AS FOLLOWS:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Receivable:
Between one and two years
Between two and three years
Between three and four years
Between four and five years
More than five years
TOTAL NON-CURRENT RECEIVABLES
-
-
-
-
259,908
259,908
-
-
-
-
258,447
258,447
112 Financial Report
112 Visie en Missie
NOTE 10 - TRADE AND OTHER RECEIVABLES - CURRENT
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Trade receivables
Accrued income
Accrued interest
Deferred charges
Other receivables
TOTAL TRADE AND OTHER RECEIVABLES
35,740
31,515
25
20,402
131,398
219,080
48,070
18,342
79
31,492
96,750
194,733
The increase in other receivables relates to income to be received by the Group from the Tankers International Pool. These
amounts increased in 2015 due to overall improving market conditions and the increase in the number of vessels operated through
the Tankers International Pool.
For currency and credit risk, we refer to Note 18.
NOTE 11 - CASH AND CASH EQUIVALENTS
(in thousands of USD)
Bank deposits
Cash at bank and in hand
TOTAL
Of which restricted cash
Less:
Bank overdrafts used for cash management purposes
NET CASH AND CASH EQUIVALENTS
DECEMBER 31, 2015
DECEMBER 31, 2014
59,205
72,458
131,663
124
-
131,663
146,100
107,986
254,086
-
-
254,086
Financial Report 113
Visie en Missie 113
NOTE 12 - EQUITY
NUMBER OF SHARES ISSUED
in shares
On issue at 1 January
Conversion convertible bonds
Conversion perpetual convertible preferred equity
Capital increases
ON ISSUE AT 31 DECEMBER - FULLY PAID
On January 20, 2015 the Group announced the commencement
of its underwritten Initial Public Offering (IPO) in the United
States of 13,550,000 ordinary shares. On January 19, 2015 the
closing price of the Company’s ordinary shares on Euronext
Brussels was USD 12.94 per share (based upon the Bloomberg
Composite Rate of EUR 0.8604 per USD 1.00 in effect on that
date). The Company received approval to list its ordinary shares
on the New York Stock Exchange (the “NYSE”) under the symbol
“EURN”. On January 28, 2015 the Group announced the closing
of its IPO of 18,699,000 common shares at a public offering price
of USD 12.25 per share for gross proceeds of USD 229,062,750.
This included the exercise in full by the underwriters of their
overallotment option. The transaction costs related to this
public offering for a total amount of USD 19.4 million were
recognized directly in retained earnings.
At December 31, 2015 the share capital is represented by
159,208,949 shares. The shares have no par value.
At December 31, 2015, the authorized share capital not issued
amounts to USD 150,000,000 (2014: USD 61,525,678) or the
equivalent of 138,005,652 shares (2014: 56,605,942 shares).
The holders of ordinary shares are entitled to receive dividends
when declared and are entitled to one vote per share at the
shareholders’ meetings of the Group.
Conversion of perpetual convertible preferred equity
Following its IPO, the Group exercised its right to request
the conversion of the remaining 30 outstanding perpetual
convertible preferred equity securities and issued such notice
on January 30, 2015. The aggregate principal amount of USD
75,000,000 was converted to Euronav’s share capital through a
contribution in kind on February 6, 2015 against the issuance
of 9,459,283 shares. These shares are listed on both Euronext
Brussels and the NYSE.
Translation reserve
The translation reserve comprises all foreign exchange
differences arising from the translation of the financial
statements of foreign operations.
Hedging reserve
The Group, in connection to the USD 300 million facility
raised in April 2009 entered in several Interest Rate Swap
114 Financial Report
DECEMBER 31, 2015
DECEMBER 31, 2014
131,050,666
-
9,459,283
18,699,000
159,208,949
54,223,817
18,495,656
9,459,286
48,871,907
131,050,666
(IRSs) instruments for a combined notional value of USD 300
million. These IRSs have been used to hedge the risk related
to the fluctuation of the Libor rate and qualified for hedging
instruments in a cash flow hedge relationship under IAS 39.
These instruments have been measured at their fair value;
effective changes in fair value have been recognized in equity
and the ineffective portion has been recognized in profit or loss.
These IRSs had a duration of five years matching the repayment
profile of that facility and matured on April 2, 2014. Therefore,
the fair value of these instruments at December 31, 2015 and at
December 31, 2014 amounted to USD 0.
Treasury shares
As of December 31, 2015 Euronav owned 466,667 of its own
shares, compared to 1,750,000 of shares owned on December
31, 2014. In the twelve months period ended December 31, 2015,
Euronav delivered 1,283,333 treasury shares upon the exercise
of share options. These treasury shares had an aggregate
weighted average cost of USD 33.8 million and Euronav
recognized a loss of USD 25.5 million in retained earnings
upon the delivery of these treasury shares to the share option
holders. The total net proceeds amounted to USD 8.3 million.
Dividends
On March 15, 2016, the Board of Directors decided to propose to
the Annual Shareholders’ meeting to be held on May 12, 2016,
to approve an additional gross dividend in the amount of USD
0.82 per share to all shareholders. The dividend to holders of
Euronav shares trading on Euronext Brussels will be paid in
EUR at the USD/EUR exchange rate of the record date.
Exceptionally this year, the company paid a dividend in May 2015
out of the profits carried forward from prior years but based
on the strong cash flow made in the first quarter of 2015 and
the strong market prospects at that time. The calculation of
the final dividend for the financial year 2015 was made taking
into account the Group’s policy to return 80% of the net profits
to shareholders excluding exceptional items such as gains on
the disposal of vessels. The total gross dividend paid in 2015
of USD 1.69 per share is the sum of the dividends paid in May
and September 2015 in addition to the proposed amount of USD
0.82 per share proposed to the Annual Shareholder’s meeting
of 12 May 2016.
NOTE 12 - EQUITY (CONTINUED)
Share-based payment arrangements
On December 16, 2013, the Group established a share option
program that entitles key management personnel to purchase
existing shares in the Company. Under the program, holders
of vested options are entitled to purchase shares at the market
price of the shares at the grant date. Currently this program
is limited to key management personnel. In May 2015, the
holders exercised two thirds of these options which resulted
in the sale of 1,166,666 treasury shares. In December 2015, a
further 116,667 options were exercised and a corresponding
number of treasury shares were sold. The key terms and
conditions did not change after December 31, 2013. For
this option program a total amount of USD 1.2 million was
recognized in the consolidated statement of profit or loss
during 2015 (2014: USD 4.0 million).
Long term incentive plan
The Group’s Board of Directors has implemented in 2015 a long
term incentive plan (‘LTIP’) for key management personnel.
Under the terms of this LTIP, the beneficiaries will obtain 40%
of their respective LTIP in the form of Euronav stock options,
with vesting over three years and 60% in the form of restricted
stock units (‘RSU’s’), with cliff vesting on the third anniversary.
In total 236,590 options and 65,433 RSU’s were granted on
February 12, 2015. Vested stock options may be exercised
until 13 years after the grant date. The stock options have
an exercise price of EUR 10.0475 and are equity-settled. All
of the stock options and RSUs granted on February 12, 2015
remained outstanding as of December 31, 2015. The fair value
of the stock options was measured using the Black Scholes
formula. The fair value of the RSUs was measured with
reference to the Euronav share price at the grant date. The
total employee benefit expense recognized in the consolidated
statement of profit or loss during 2015 with respect to the LTIP
was USD 0.5 million.
Financial Report 115
Visie en Missie 115
NOTE 13 - EARNINGS PER SHARE
Basic earnings per share
The calculation of basic earnings per share at December 31, 2015 was based on a result attributable to ordinary shares of USD
350,300,535 (2014: USD -45,795,933) and a weighted average number of ordinary shares outstanding during the period ended
December 31, 2015 of 155,872,171 (2014: 116,539,017), calculated as follows:
RESULT ATTRIBUTABLE TO ORDINARY SHARES
(in thousands of USD except share and per share information)
2015
2014
Result for the period
Weighted average
Basic earnings per share (in USD)
350,301
155,872,171
2.25
(45,797)
116,539,017
(0.39)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
(in shares)
ON ISSUE AT JANUARY 1, 2014
Issuance of shares
Purchases of treasury shares
Withdrawal of treasury shares
Sales of treasury shares
ON ISSUE AT DECEMBER 31, 2014
ON ISSUE AT JANUARY 1, 2015
Issuance of shares
Purchases of treasury shares
Withdrawal of treasury shares
Sales of treasury shares
ON ISSUE AT DECEMBER 31, 2015
SHARES ISSUED
TREASURY
SHARES
SHARES
OUTSTANDING
54,223,817
76,826,849
-
-
-
131,050,666
131,050,666
28,158,283
-
-
-
159,208,949
1,750,000
-
-
-
1,750,000
1,750,000
-1,283,333
466,667
52,473,817
76,826,849
-
-
-
129,300,666
129,300,666
28,158,283
-
-
1,283,333
158,742,282
WEIGHTED
NUMBER
OF SHARES
52,473,817
64,065,200
-
-
-
116,539,017
129,300,666
25,842,099
-
-
729,406
155,872,171
Diluted earnings per share
For the twelve months ended December 31, 2015, the diluted
earnings per share (in USD) amount to 2.22 (2014: -0.39).
At December 31, 2014, 250 convertible Notes and 30 PCPs
were excluded from the diluted weighted-average number of
ordinary shares calculation because their effect would have
been anti-dilutive (earnings per share would increase). At
December 31, 2015, no instruments were excluded from the
calculation of the diluted weighted average number of shares.
Weighted average number of
ordinary shares (diluted)
The table below shows the potential weighted number of
shares that could be created if all stock options, restricted
stock units, convertible notes and PCPs were to be converted
into ordinary shares.
(in shares)
2015
2014
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING (BASIC)
155,872,171
116,539,017
Effect of potential conversion of convertible Notes
Effect of potential conversion of PCPs
Effect of share-based payment arrangements
88,689
932,971
635,731
1,079,047
9,459,283
1,750,000
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (DILUTED)
157,529,562
128,827,347
116 Financial Report
NOTE 13 - EARNINGS PER SHARE (CONTINUED)
The number of shares related to a potential conversion of
convertible Notes may vary according to potential adjustments
of the conversion price in certain events such as a change of
control, a distribution of a dividend exceeding certain threshold
amounts or early voluntary conversion.
On February 6, 2014, 30 of the 60 perpetual convertible
preferred equity instruments issued on January 10, 2014,
were converted to share capital through a contribution in kind.
On February 6, 2015, the remaining 30 perpetual convertible
preferred equity instruments were converted as well.
In the course of 2014, all the convertible Notes issued in 2013
and maturing in 2018, were converted to new ordinary shares,
except for one which was redeemed at par.
After all the conversions of the convertible Notes and the
PCPs, there are no more remaining outstanding instruments
at December 31, 2015 which can give rise to dilution, except
for the share-based payment arrangements.
On January 31, 2015, the last 250 remaining outstanding Notes
due in January 2015, were redeemed at par.
Financial Report 117
Visie en Missie 117
NOTE 14 - INTEREST-BEARING LOANS AND BORROWINGS
(in thousands of USD)
More than five years
Between one and five years
More than one year
Less than one year
AT JANUARY 1, 2014
New loans
Scheduled repayments
Early repayments
Conversion
Other changes
BALANCE AT DECEMBER 31, 2014
More than five years
Between one and five years
More than one year
Less than one year
BALANCE AT DECEMBER 31, 2014
More than five years
Between one and five years
More than one year
Less than one year
AT JANUARY 1, 2015
New loans
Scheduled repayments
Early repayments
Conversion
Other changes
BALANCE AT DECEMBER 31, 2015
More than five years
Between one and five years
More than one year
Less than one year
BALANCE AT DECEMBER 31, 2015
BANK LOANS
CONVERTIBLE AND
OTHER NOTES
-
710,086
710,086
137,677
847,763
1,195,217
(137,545)
(660,946)
-
(10,160)
1,234,329
371,595
716,431
1,088,026
146,303
1,234,329
-
125,822
125,822
-
125,822
200,175
-
(1,400)
(109,700)
39,600
254,497
-
231,373
231,373
23,124
254,497
BANK LOANS
CONVERTIBLE AND
OTHER NOTES
TOTAL
-
835,908
835,908
137,677
973,585
1,395,392
(137,545)
(662,346)
(109,700)
29,440
1,488,826
371,595
947,804
1,319,399
169,427
1,488,826
TOTAL
371,595
947,804
1,319,399
169,427
1,488,826
371,595
716,431
1,088,026
146,303
1,234,329
931,270
(109,719)
(999,451)
-
(3,981)
1,052,448
147,174
805,252
952,426
100,022
1,052,448
-
231,373
231,373
23,124
254,497
-
(23,200)
931,270
(132,919)
(235,500)
(1,234,951)
-
4,203
-
-
-
-
-
-
-
222
1,052,448
147,174
805,252
952,426
100,022
1,052,448
Bank Loans
On April 3, 2009, the Group entered into a USD 300.0 million
secured loan facility with a syndicate of banks and Nordea
Bank Norge SA as Agent and Security Trustee. This facility
had an initial term of five years, which was amended to extend
maturity by an additional four years until 2018. The Group
used the proceeds of this facility to finance the acquisition
of six vessels, Fraternity, Felicity, Cap Felix, Cap Theodora,
Antarctica and Olympia, which were pledged as collateral
under the loan, and for general corporate and working
capital purposes. This facility, as amended, was repayable in
consecutive quarterly installments and bore interest at LIBOR
plus a margin of 3.40% per annum, plus applicable mandatory
costs. On October 22, 2014, the Group repaid this loan in full
using a portion of the borrowings under the USD 340.0 million
Senior Secured Credit Facility.
118 Financial Report
NOTE 14 - INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
As of December 31, 2015 and December 31, 2014, there were
no outstanding balances under this facility.
On June 22, 2011, the Group entered into a USD 750.0 million
secured loan facility with a syndicate of banks and Nordea
Bank Norge SA as Agent and Security Trustee. This facility
was comprised of a USD 500.0 million term loan facility and a
USD 250.0 million revolving credit facility, and had a term of six
years. The main purpose of this facility was to repay and retire
the USD 1,600 million facility signed in April 2005. This facility
was secured by 22 of the Group’s wholly-owned vessels. The
term loan was repayable in 11 instalments of consecutive six-
month intervals, with the final repayment due at maturity in
2017. Each revolving advance was repayable in full on the last
day of its applicable interest period. This facility, as amended,
bore interest at LIBOR plus a margin of 3.0% per annum plus
applicable mandatory costs. On September 1, 2015, the Group
repaid this loan in full using a portion of the borrowings under
the USD 750.0 million senior secured amortizing revolving
credit facility concluded on August 19, 2015.
On December 23, 2011, the Group entered into a USD 65.0
million secured term loan facility with DNB Bank ASA and
Skandinaviska Enskilda Banken AB (publ) to finance the
acquisition of Alsace, which was mortgaged under the loan.
This facility was repayable over a term of seven years in
ten installments at successive six month intervals, each
in the amount of USD 2.15 million together with a balloon
installment of USD 43.5 million payable with (and forming part
of) the tenth and final repayment on February 23, 2017. The
interest rate was LIBOR plus a margin of 2.95% per annum
plus applicable mandatory costs. This USD 65.0 million loan
facility was repaid in full on September 1, 2015 using a portion
of the borrowing under the USD 750.0 million senior secured
amortizing revolving credit facility concluded on August 19,
2015.
On March 25, 2014, the Group entered into a USD 500.0 million
senior secured credit facility with DNB Bank ASA, Nordea
Bank Norge ASA, and Skandinaviska Enskilda Banken AB
(publ). This facility bears interest at LIBOR plus a margin of
2.75% per annum and is repayable over a term of six years with
maturity in 2020 and is secured by the fifteen (15) Very Large
Crude Carriers (VLCC) from Maersk Tankers Singapore Pte
Ltd. The proceeds of the facility have been drawn and used to
partially finance the purchase price of the Maersk Acquisition
Vessels. As of December 31, 2015 and December 31, 2014, the
outstanding balances on this facility were USD 428.0 million
and USD 476.0 million, respectively.
On October 13, 2014, the Group entered into a new USD 340.0
million senior secured credit facility with a syndicate of banks
and ING Bank N.V. as Agent and Security Trustee. Borrowings
under this facility have been, or are expected to be, used
to partially finance the acquisition of the four (4) modern
Japanese built VLCC vessels (‘the VLCC Acquisition Vessels’)
from Maersk Tankers Singapore Pte Ltd and to repay USD 153.1
million of outstanding debt and retire the Group’s USD 300.0
million Secured Loan Facility dated April 3, 2009. This facility is
comprised of (i) a USD 148.0 million non-amortizing revolving
credit facility and (ii) a USD 192.0 million term loan facility.
This facility has a term of seven years and bears interest at
LIBOR plus a margin of 2.25% per annum. This credit facility is
secured by eight of our wholly-owned vessels, the Fraternity,
Felicity, Cap Felix, Cap Theodora and, upon their respective
deliveries, the VLCC Acquisition Vessels. On October 22, 2014
a first drawdown under this facility was made to repay the
USD 300 million secured loan facility, followed by additional
drawdowns on December 22, 2014 and December 23, 2014
for an amount of 60.3 million and 50.3 million following the
delivery of the Hojo and Hakone respectively. On March 3, 2015
and April 13, 2015 additional drawdowns of 53.4 million and
50.4 million were made following the delivery of the Hirado and
Hakata respectively. As of December 31, 2015 and December
31, 2014, the outstanding balances on this facility were USD
175.5 million and USD 235.2 million, respectively.
On August 19, 2015, the Group entered into a USD 750.0
million senior secured amortizing revolving credit facility
with a syndicate of banks led by DNB Bank ASA and Nordea
Bank Norge ASA. The facility will be available for the purpose
of (i) refinancing 21 vessels; (ii) financing four newbuilding
VLCCs vessels as well as (iii) Euronav’s general corporate and
working capital purposes. The credit facility will mature on 1
July 2022 and carries a rate of LIBOR plus a margin of 195 bps.
As of December 31, 2015, the outstanding balance under this
facility was USD 467.5 million.
On November 9, 2015, the Group entered into a USD 60.0
million unsecured revolving credit facility with KBC NV, acting
as Bookrunning Mandated Lead Arranger and as Agent. As
at the end of December 31, 2015, there was no outstanding
balance under this facility.
Undrawn borrowing facilities
At December 31, 2015, Euronav and
fully-owned
subsidiaries have undrawn credit line facilities amounting to
USD 291.1 million (2014: EUR 10.0 million).
its
Financial Report 119
Visie en Missie 119
NOTE 14 - INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
TERMS AND DEBT REPAYMENT SCHEDULE
The terms and conditions of outstanding loans were as follows:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
CURR.
USD
NOMINAL
INTEREST
RATE
libor +3.00%
USD
libor +3.00%
YEAR
OF MAT.
FACILITY
SIZE
DRAWN CARRYING
VALUE
FACILITY
SIZE
DRAWN CARRYING
VALUE
2017
2017
-
-
-
-
-
-
253,409
253,409
252,400
230,372
230,372
230,000
USD
libor +2.25%
2021
175,476
175,476
172,778
132,829
132,829
129,485
USD
libor +2.25%
2021
147,559
-
-
102,388
102,388
102,388
Secured vessels loan
Secured vessels
Revolving loan*
Secured vessels loan
Secured vessels
Revolving loan*
Secured vessels loan
USD
libor +2.75%
2020
428,000
428,000
420,320
476,000
476,000
465,956
Secured vessels loan
Secured vessels
Revolving loan*
Unsecured bank facility
Unsecured bank facility
TOTAL
INTEREST-BEARING
BANK LOANS
USD
libor +2.95%
2017
-
-
-
54,250
54,250
54,100
USD
libor +1.95%
2022
551,023
467,500
459,350
-
EUR euribor +1.00%
USD
libor +2.25%
2015
2020
-
60,000
-
-
-
-
10,000
-
-
-
-
-
-
-
1,362,058 1,070,976
1,052,448 1,259,248 1,249,248
1,234,329
The facility size of the vessel loans can be reduced if the value of the collateralized vessels falls under a certain percentage of the
outstanding amount under that loan.
* The total amount available under the Revolving Credit Facility depends on the total value of the fleet of tankers securing the facility.
CONVERTIBLE AND OTHER NOTES
(in thousands of USD)
NOMINAL
INTEREST
RATE
6.50%
5.95%
CURR.
USD
USD
Unsecured convertible Notes
Unsecured Notes
TOTAL CONVERTIBLE AND
OTHER NOTES
DECEMBER 31, 2015
DECEMBER 31, 2014
YEAR OF
MAT.
FACILITY
SIZE
DRAWN CARRYING
VALUE
FACILITY
SIZE
DRAWN CARRYING
VALUE
2015
2021
-
-
-
-
-
-
-
-
-
25,000
235,500
25,000
235,500
23,124
231,373
260,500
260,500
254,497
On September 24, 2009, the Group issued USD 150.0 million
fixed rate senior unsecured convertible Notes, due 2015. The
Notes were issued at 100% of their principal amount and bore
interest at a rate of 6.5% per annum, payable semi-annually
in arrears. The initial conversion price was EUR 16.283750
(or USD 23.168520 at EUR/USD exchange rate of 1.4228) per
share and was set at a premium of 25% to the volume weighted
average price of Euronav’s ordinary shares on Euronext
Brussels on September 3, 2009.
In the course of the first quarter 2012, the Group repurchased
68 Notes of its USD 150 million fixed rate senior unsecured
Notes, due 2015. In 2013, the Group offered to exchange the
Notes against a new Note which bore the same interest rate of
6.5% but which would mature in 2018 and would have a lower
conversion price of EUR 5.65. The exchange offer resulted in
USD 125.0 million of Notes (face value) being exchanged for new
Notes, including the 68 Notes acquired by the Group in 2012.
120 Financial Report
NOTE 14 - INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
In the second quarter of 2013, the Group bought back an
additional five of its Notes due in 2015, while selling in the
third quarter of 2013 the 68 Notes due in 2018 it held after the
above exchange.
During the period from November 12, 2013 through April 22,
2014, the Group issued an aggregate of 20,969,473 existing
ordinary shares upon conversion of USD 124.9 million in
aggregate principal amount of 1,249 Convertible Notes due
2018 at the holders’ option.
On February 20, 2014, the Group exercised its right to redeem
all of the remaining Convertible Notes due in 2018. On April 9,
2014, the Group redeemed the last convertible note due 2018.
On January 31, 2015, the Group redeemed the 250 remaining
outstanding fixed rate unsecured convertible Notes due 2015
with a face value of USD 100,000 each, at par.
CONVERTIBLE NOTES
(in thousands of USD)
Carrying amount of liability at the beginning of period
Interest
Amortization of transaction costs
Buyback of convertible Notes
Redemption of convertible Notes
Conversion of convertible Notes
CARRYING AMOUNT OF LIABILITY AT THE END OF THE PERIOD
On February 4, 2014, the Group issued USD 235.5 million
seven-year bonds. These bonds were issued at 85% of their
principal amount and bore interest at a rate of 5.95% per
annum for the first year, payable semi-annually in arrears.
The interest rate would increase to 8.5% per annum for the
second and third year and would increase again to 10.20% per
annum from year four until maturity. The bonds were at any
time redeemable by Euronav at par. These bonds were fully
repaid on February 19, 2015 using the proceeds of the initial
public offering in the US. Of the on issue discount (USD 35.3
million) and the transaction costs (USD 0.7 million), USD 31.9
million was recognized in finance expenses in 2014 and USD
4.1 million was recognized in finance expenses in 2015 (see
Note 5). These amounts are also reflected under the heading
‘Other changes’ in the table on page 118.
2015
2014
23,124
-
76
-
(23,200)
-
-
125,822
867
68
(1,354)
-
(102,279)
23,124
Transaction and other financial costs
In 2015, the Group noted a decrease in finance expenses
(2015: USD -50.9 million, 2014: USD -96.0 million) mainly due
to the repayment of the convertible Notes and the USD 235.5
million seven-year bonds. Amortizations of transaction costs
are reflected under the heading ‘Other changes’ in the table
above.
NOTE 15 - NON-CURRENT OTHER PAYABLES
(in thousands of USD)
More than five years
Between one and five years
BALANCE AT DECEMBER 31, 2014
More than five years
Between one and five years
BALANCE AT DECEMBER 31, 2015
FAIR VALUE
DERIVATIVES
-
-
-
FAIR VALUE
DERIVATIVES
-
-
-
SELLERS CREDIT
-
-
-
SELLERS CREDIT
-
-
-
ADVANCES ON
CONTRACTS
489
-
489
ADVANCES ON
CONTRACTS
590
-
590
TOTAL
489
-
489
TOTAL
590
-
590
Financial Report 121
NOTE 16 - EMPLOYEE BENEFITS
THE AMOUNTS RECOGNIZED IN THE BALANCE SHEET ARE AS FOLLOWS:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Restated*
NET LIABILITY AT BEGINNING OF PERIOD
Recognized in profit or loss
Recognized in other comprehensive income
Foreign currency translation differences
NET LIABILITY AT END OF PERIOD
Present value of funded obligations
Fair value of plan assets
Present value of unfunded obligations
NET LIABILITY
Amounts in the balance sheet:
Liabilities
Assets
NET LIABILITY
(2,108)
(108)
(44)
222
(2,038)
(852)
539
(313)
(1,725)
(2,038)
(2,038)
-
(2,038)
(1,900)
(85)
(393)
270
(2,108)
(1,525)
1,145
(380)
(1,728)
(2,108)
(2,108)
-
(2,108)
Liability for defined benefit obligations
The Group makes contributions to three defined benefit plans that provide pension benefits for employees upon retirement.
One plan - the Belgian plan - is fully insured through an insurance company. The second and third - French and Greek plan - are
uninsured and unfunded.
The Group expects to contribute the following amount to its defined benefit pension plans in 2016: USD 43,245.
NOTE 17 - TRADE AND OTHER PAYABLES - CURRENT
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Trade payables
Accrued payroll
Dividends payable
Derivatives
Accrued expenses
Accrued interest
Deferred income
Other payables
Sellers credit
TOTAL TRADE AND OTHER PAYABLES
23,034
2,719
7
-
35,189
1,043
16,860
226
-
79,078
21,844
2,464
8
-
36,838
14,026
10,248
10,127
30,000
125,555
The amount under other payables as at December 31, 2014 primarily related to the option fee received in January 2011 in cash
to sell the VLCC Antarctica (2009 - 315,981 dwt). The Antarctica was sold in 2015 and the corresponding USD 10.0 million was
deducted from the sale price. In 2015, the sellers credit in the amount of USD 30.0 million was repaid.
122 Financial Report
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS
Carrying amounts and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels
in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at
fair value if the carrying amount is a reasonable approximation of fair value, such as sellers credit and trade and other receivables
and payables.
(in thousands of USD)
NOTE
FAIR VALUE
- HEDGING
INSTRUMENTS
LOANS AND
RECEIVABLES
OTHER
FINANCIAL
LIABILITIES
TOTAL
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
CARRYING AMOUNT
FAIR VALUE
DECEMBER 31, 2014
FINANCIAL ASSETS NOT MEASURED AT FAIR VALUE
Non-current receivables
Trade and other receivables *
Cash and cash equivalents
9
10
11
-
-
-
-
258,447
163,241
254,086
675,774
FINANCIAL LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps used for
hedging
-
-
FINANCIAL LIABILITIES NOT MEASURED AT FAIR VALUE
Secured bank loans
Unsecured bank loans
Unsecured convertible Notes
Unsecured other Notes
Trade and other payables *
Advance received on Contracts
14
14
14
14
17
15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
DECEMBER 31, 2015
FINANCIAL ASSETS NOT MEASURED AT FAIR VALUE
Non-current receivables
Trade and other receivables *
Cash and cash equivalents
9
10
11
-
-
-
-
259,908
198,678
131,663
590,249
FINANCIAL LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps used for
hedging
-
-
FINANCIAL LIABILITIES NOT MEASURED AT FAIR VALUE
Secured bank loans
Unsecured bank loans
Unsecured convertible Notes
Unsecured other Notes
Trade and other payables *
Advance received on Contracts
14
14
14
14
17
15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
258,447
163,241
254,086
675,774
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,234,329
-
23,124
231,373
115,307
489
1,604,622
1,234,329
-
23,124
231,373
115,307
489
1,604,622
- 1,249,248
-
-
-
25,048
-
236,202
-
-
-
-
261,249 1,249,248
- 1,249,248
-
-
25,048
-
236,202
-
-
-
-
-
- 1,510,497
-
-
-
-
-
-
259,908
198,678
131,663
590,249
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,052,448
-
-
-
62,218
590
1,115,256
1,052,448
-
-
-
62,218
590
1,115,256
- 1,070,976
-
-
-
-
-
-
-
-
-
-
- 1,070,976
- 1,070,976
-
-
-
-
-
-
-
-
-
-
- 1,070,976
* Deferred charges (see Note 10) and deferred income (see Note 17), which are not financial assets (liabilities) are not included.
Financial Report 123
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS (CONTINUED)
Measurement of fair values
Valuation techniques and significant unobservable inputs
Level 1 fair value was determined on the actual trading of the unsecured convertible Notes, due in 2015 and the unsecured other
Notes, due in 2021 and the trading price on December 31, 2014.
The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant unobservable
inputs used.
Financial instruments measured at fair value
TYPE
VALUATION TECHNIQUES
Forward exchange contracts and interest
rate swaps for which no hedge accounting
applies
Interest rate swaps for which hedge
accounting applies
Market comparison technique: The fair values
are based on broker quotes. Similar contracts are
traded in an active market and the quotes reflect
the actual transactions in similar instruments.
Fair value calculation: The fair values are computed
by calculating the present value of the future cash
flows (fixed and floating), which depends on the
forward rates. The forward rates are calculated on
the interest rate curves such as LIBOR.
SIGNIFICANT UNOBSERVABLE
INPUTS
Not applicable
Not applicable
Financial instruments not measured at fair value
TYPE
VALUATION TECHNIQUES
Debt Securities (consisting of unsecured
other notes)
Other financial liabilities (consisting of
secured and unsecured bank loans)
Market comparison technique: The valuation
is based on the market price of the traded
instruments. The contracts are traded in an
active market and the quotes reflect the actual
transactions.
Discounted cash flow
SIGNIFICANT UNOBSERVABLE
INPUTS
Not applicable
Not applicable
124 Financial Report
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS (CONTINUED)
Transfers between Level 1 and 2
There were no transfers in either direction in 2014 and 2015.
Financial risk management
In the course of its normal business, the Group is exposed to
following risks:
• Credit risk
• Liquidity risk
• Market risk (Tanker market risk, interest rate risk and
currency risk)
Credit risk
Trade and other receivables
The Group has no formal credit policy. Credit evaluations -
when necessary - are performed on an ongoing basis. At the
balance sheet date there were no significant concentrations
of credit risk. In particular, the sole client representing 11%
of the Tankers segment’s total revenue in 2015 (see Note 1)
only represented 2% of the total trade and other receivables
at December 31, 2015 (2014: 3%). The maximum exposure
to credit risk is represented by the carrying amount of each
financial asset.
The ageing of trade and other receivables is as follows:
(in thousands of USD)
Not past due
Past due 0-30 days
Past due 31-365 days
More than one year
TOTAL TRADE AND OTHER RECEIVABLES
2015
2014
206,771
5,569
4,216
2,524
219,080
177,062
3,301
13,609
761
194,733
Non current receivables mainly consist of shareholders’ loans to joint ventures (see Note 9). As at December 31, 2015 and
December 31, 2014, these receivables were not past due (no maturity date) and not impaired.
Past due amounts are not impaired as collection is still
considered to be likely and management is confident the
outstanding amounts can be recovered. As at December
31, 2015 58.32% (2014: 46.15%) of the total trade and other
receivables relate to TI Pool which are paid after completion
of the voyages but which only deals with oil majors, national
oil companies and other actors of the oil industry whose credit
worthiness is very high. Amounts not past due are also with
customers with very high credit worthiness and are therefore
not impaired.
Cash and cash equivalents
The Group held cash and cash equivalents of USD 131.7
million at December 31, 2015 (2014: USD 254.1 million). The
cash and cash equivalents are held with bank and financial
institution counterparties, which are rated A- to AA+, based on
rating agency S&P (see Note 11).
Derivatives
The derivatives are entered into with banks and financial
institution counterparties, which are rated A- to AA+, based on
rating agency S&P.
Guarantees
The Group’s policy is to provide financial guarantees only for
subsidiaries and joint ventures. At December 31, 2015, the
Group has issued a guarantee to certain banks in respect of
credit facilities granted to six joint ventures (see Note 24).
Financial Report 125
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS (CONTINUED)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet
its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s
reputation. Despite the crisis on the financial markets since
the summer of 2008, the liquidity risk of the Group remains
under control. The sources of financing have been diversified
with the first issuance of a convertible Note in September
2009 and the bulk of the loans are irrevocable, long-term and
maturities are spread over different years.
The following are the remaining contractual maturities of financial liabilities:
CONTRACTUAL CASH FLOWS DECEMBER 31, 2014
(in thousands of USD)
NON-DERIVATIVE FINANCIAL LIABILITIES
Bank loans
Convertible Notes
Current trade and other payables *
Non-current other payables
DERIVATIVE FINANCIAL LIABILITIES
Interest rate swaps
Forward exchange contracts
NOTE
CARRYING
AMOUNT
TOTAL
LESS THAN
1 YEAR
BETWEEN 1
AND 5 YEARS
MORE THAN
5 YEARS
14
14
17
15
15
15
1,234,329
254,497
115,307
-
1,604,133
1,379,638
300,933
115,307
-
1,795,878
185,372
43,358
115,307
-
344,037
815,364
257,575
-
-
1,072,939
378,902
-
-
-
378,902
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CONTRACTUAL CASH FLOWS DECEMBER 31, 2015
(in thousands of USD)
NON-DERIVATIVE FINANCIAL LIABILITIES
Bank loans
Convertible and other Notes
Current trade and other payables *
Non-current other payables
DERIVATIVE FINANCIAL LIABILITIES
Interest rate swaps
Forward exchange contracts
14
14
17
15
15
15
CARRYING
AMOUNT
TOTAL
LESS THAN
1 YEAR
BETWEEN 1
AND 5 YEARS
MORE THAN
5 YEARS
1,052,448
-
62,218
-
1,114,666
1,174,016
-
62,218
-
1,236,234
108,395
-
62,218
-
170,613
906,286
-
-
-
906,286
159,335
-
-
-
159,335
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Group has secured bank loans that contain loan covenants.
A future breach of covenant may require the Group to repay
the loan earlier than indicated in the above table. For more
details on these covenants, please see “capital management”
below. The interest payments on variable interest rate loans
in the table above reflect market forward interest rates at
the reporting date and these amounts may change as market
interest rate change. Except for these financial liabilities, it
is not expected that the cash flows included in the maturity
analysis could occur significantly earlier, or at significantly
different amounts.
* Deferred income (see Note 17), which are not financial liabilities, are not included.
126 Financial Report
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS (CONTINUED)
(in thousands of USD)
Dirty value
Accrued interest
CLEAN VALUE AT JANUARY 1, 2014
Effective portion recognized directly in OCI
Ineffective portion recognized in profit or loss
Dirty value
Accrued Intrest
CLEAN VALUE AT DECEMBER 31, 2014
Dirty value
Accrued interest
CLEAN VALUE AT JANUARY 1, 2015
Effective portion recognized directly in OCI
Ineffective portion recognized in profit or loss
Dirty value
Accrued interest
CLEAN VALUE AT DECEMBER 31, 2015
NOTE
INTEREST SWAPS
WITH HEDGE
ACCOUNTING
INTEREST SWAPS
WITH NO HEDGE
ACCOUNTING
-
-
-
-
-
-
-
15
-
-
15
-
-
-
-
15
(1,443)
152
(1,291)
1,291
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FORWARD
EXCHANGE
CONTRACTS USED
FOR HEDGING
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL
(1,443)
152
(1,291)
1,291
-
-
-
-
-
-
-
-
-
-
-
-
Market risk
Tanker market risk
The spot tanker freight market is a highly volatile global
market and the Group cannot predict what the market will be.
In order to manage the risk associated to this volatility, the
Group has adopted a balanced strategy of operating part of its
fleet on the spot market and the other part under fixed time
charter contracts. The proportion of vessels operated on the
spot will vary according to the many factors affecting both the
spot and fixed time charter contract markets.
Every increase (decrease) of 1,000 USD on a spot tanker freight
market (VLCC and Suezmax) per day would have increased
(decreased) profit or loss by the amounts shown below:
effect in thousands of USD
2015
PROFIT OR LOSS
2014
PROFIT OR LOSS
1,000 USD
INCREASE
12,972
1,000 USD
INCREASE
(12,972)
1,000 USD
INCREASE
9,941
1,000 USD
INCREASE
(9,941)
Interest rate risk
In the past the Group hedged part of its exposure to changes
in interest rates on borrowings. All borrowings contracted for
the financing of vessels are on the basis of a floating interest
rate, increased by a margin. On a regular basis the Group uses
various interest rate related derivatives (interest rate swaps,
caps and floors) to achieve an appropriate mix of fixed and
floating rate exposure as defined by the Group. On December
31, 2015, the Group has no such instruments in place.
The Group, in connection to the USD 300 million facility raised
in April 2009 also entered in several Interest Rate Swap
(IRS) instruments for a combined notional value of USD 300
million. These IRSs have been used to hedge the risk related
to any fluctuation of the Libor rate and qualified for hedging
instruments in a cash flow hedge relationship under IAS 39.
These instruments have been measured at their fair value;
effective changes in fair value have been recognized in equity
and the ineffective portion has been recognized in profit or loss.
These IRS had a duration of five years matching the repayment
profile of that facility and matured in April 2014 and as a
consequence the fair value of these instruments at December
31, 2015 and December 31, 2014 amounted to USD 0.
Financial Report 127
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS (CONTINUED)
At the reporting date the interest rate profile of the Group’s interest-bearing financial liabilities was:
(in thousands of USD)
FIXED RATE INSTRUMENTS
Financial assets
Financial liabilities
VARIABLE RATE INSTRUMENTS
Financial liabilities
CARRYING AMOUNT
2015
2014
-
-
-
1,052,448
1,052,448
-
254,497
254,497
1,234,329
1,234,329
Fair value sensitivity analysis for fixed rate
instruments
The Group does not account for any fixed rate financial assets
and liabilities at fair value through profit or loss, and the Group
does not designate derivatives (interest rate swaps) as hedging
instruments under a fair value hedge accounting model.
Therefore a change in interest rates at the reporting date would
not affect profit or loss nor equity.
Cash flow sensitivity analysis for variable rate
instruments
A change of 50 basis points in interest rates at the reporting date
would have increased (decreased) equity and profit or loss by
the amounts shown below. This analysis assumes that all other
variables, in particular foreign currency rates, remain constant.
(effect in thousands of USD)
DECEMBER 31, 2014
Variable rate instruments
Interest rate swaps
CASH FLOW SENSITIVITY (NET)
DECEMBER 31, 2015
Variable rate instruments
Interest rate swaps
CASH FLOW SENSITIVITY (NET)
50 BP
INCREASE
(4,257)
-
(4,257)
PROFIT OR LOSS
50 BP
DECREASE
4,257
-
4,257
50 BP
INCREASE
-
-
-
EQUITY
50 BP
DECREASE
-
-
-
(5,670)
-
(5,670)
5,670
-
5,670
-
-
-
-
-
-
Currency risk
The Group’s exposure to currency risk is related to its
operating expenses expressed in EUR. In 2015 about 17.4%
(2014: 13.5%) of the Group’s total operating expenses were
incurred in EUR. Revenue and the financial instruments are
expressed in USD only.
(in thousands of EUR/USD)
Trade payables
Operating expenses
DECEMBER 31, 2015
DECEMBER 31, 2014
EUR
(9,913)
(89,457)
USD
(13,121)
(425,806)
EUR
(8,646)
(65,691)
USD
(13,198)
(421,300)
For the average and closing rates applied during the year, we refer to Note 26.
Euronav has entered into an agreement with a third party financial advisor with the aim to manage the risk from adverse movements in
EUR/USD exchange rates. The program uses a financial trading strategy called Currency Overlay Management strategy which manages
the equivalent of EUR 40.0 million exposures on a yearly basis. The currency overlay manager conducts foreign-exchange hedging by
selectively placing and removing hedges to achieve the objectives set by us. Under this program no instruments were outstanding as at
December 31, 2015.
128 Financial Report
NOTE 18 - FINANCIAL INSTRUMENTS - MARKET AND OTHER RISKS (CONTINUED)
The net impact of this program on the Group's consolidated statement of profit or loss for the year ending December 31, 2015 was a loss
of USD 1,045,464 (2014: loss of USD 85,988)
Sensitivity analysis
A 10% strengthening of the EUR against the USD at December 31, would have increased (decreased) equity and profit or loss by the
amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
(in thousands of USD)
Equity
Profit or loss
2015
2014
473
(9,565)
662
(9,124)
A 10% weakening of the EUR against the USD at December
31, would have had the equal but opposite effect on the above
currencies to the amounts shown above, on the basis that all
other variables remain constant.
Further, the Group’s loan facilities generally include an asset
protection clause whereby the fair market value of collateral
vessels should be at least 125% of the aggregate principal
amount outstanding under the respective loan.
Master netting or similar agreements
The Group enters
transactions under
into derivative
International Swaps and Derivatives Association (ISDA) master
netting agreements. In general, under such agreements the
amounts owned by each counterparty on a single day in respect
of all transactions outstanding in the same currency are
aggregated into a single net amount that is payable by one party
to the other.
Capital management
Euronav is continuously optimizing its capital structure (mix
between debt and equity). The main objective is to maximize
shareholder value while keeping the desired financial flexibility
to execute the strategic projects. Some of the Group’s other
key drivers when making capital structure decisions are pay-
out restrictions and the maintenance of the strong financial
health of the Group. Besides the statutory minimum equity
funding requirements that apply to the Group’s subsidiaries in
the various countries, the Group is also subject to covenants in
relation to some of its senior secured credit facilities:
• an amount of current assets that, on a consolidated basis,
exceeds current liabilities. Current assets may include
undrawn amount of any committed revolving credit facilities
and credit lines having a maturity of more than one year;
• an aggregate amount of cash, cash equivalents and available
aggregate undrawn amounts of any committed loan of at
least USD 50.0 million or 5% of the Group’s total indebtedness
(excluding guarantees), depending on the applicable loan
facility, whichever is greater;
• an amount of cash of at least USD 30.0 million; and
• a ratio of Stockholders’ equity to total assets of at least 30%.
The credit facilities discussed above also contain restrictions
and undertakings which may limit the Group and the Group’s
subsidiaries’ ability to, among other things:
• effect changes in management of the Group’s vessels;
• transfer or sell or otherwise dispose of all or a substantial
portion of the Group’s assets;
• declare and pay dividends, (with respect to each of the Group’s
joint ventures, other than Seven Seas Shipping Limited, no
dividend may be distributed before its loan agreement, as
applicable, is repaid in full); and
• incur additional indebtedness.
A violation of any of these financial covenants or operating
restrictions contained in the credit facilities may constitute
an event of default under these credit facilities, which, unless
cured within the grace period set forth under the applicable
credit facility, if applicable, or waived or modified by the
Group’s lenders, provides them with the right to, among other
things, require the Group to post additional collateral, enhance
equity and liquidity, increase interest payments, pay down
indebtedness to a level where the Group is in compliance with
loan covenants, sell vessels in the fleet, reclassify indebtedness
as current liabilities and accelerate indebtedness and foreclose
liens on the vessels and the other assets securing the credit
facilities, which would impair the Group’s ability to continue to
conduct business.
As of December 31, 2015 and December 31, 2014, the Group
was in compliance with all of the covenants contained in the
debt agreements.
It is the Company's dividend policy to distribute 80% of the net
earnings for each fiscal year, excluding exceptional items such
as gains or losses on the disposal of vessels.
Financial Report 129
NOTE 19 - OPERATING LEASES
Leases as lessee
Future minimum lease payments
The Group leases in some of its vessels under time charter and bare boat agreements (operating leases). The future minimum
lease payments with an average duration of ten months under non-cancellable leases are as follows:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Less than 1 year
Between 1 and 5 years
More than 5 years
TOTAL FUTURE LEASE PAYMENTS
(15,012)
-
-
(15,012)
(16,036)
(6,110)
-
(22,146)
Options to extend the charter period, if any, have not been taken into account when calculating the future minimum lease payments.
Non-cancellable operating lease rentals for office space and company cars with an average duration of four years are payable as
follows:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Less than 1 year
Between 1 and 5 years
More than 5 years
TOTAL NON-CANCELLABLE OPERATING LEASE RENTALS
Amounts recognized in profit and loss
(2,448)
(6,826)
(2,665)
(11,939)
(in thousands of USD)
2015
2014
Bareboat charter
Time charter
Office rental
TOTAL RECOGNIZED IN PROFIT AND LOSS
-
(25,849)
(2,581)
(28,430)
(2,439)
(8,174)
(4,233)
(14,846)
(3,584)
(32,080)
(1,579)
(37,243)
130 Financial Report
NOTE 19 - OPERATING LEASES (CONTINUED)
Leases as lessor
The Group leases out some of its vessels under time charter agreements (operating leases). The future minimum lease receivables
with an average duration of one year and seven months under non-cancellable leases are as follows:
Future minimum lease receivables
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Less than 1 year
Between 1 and 5 years
More than 5 years
TOTAL FUTURE LEASE RECEIVABLES
217,480
168,416
-
385,896
136,304
154,842
-
291,146
On some of the abovementioned vessels the Group has granted the option to extend the charter period. These option periods have
not been taken into account when calculating the future minimum lease receivables.
At December 31, 2015, Euronav and its subsidiaries, without joint ventures, have future minimum lease receivables less than one
year of USD 152.1 million (2014: USD 72.5 million) and future minimum lease receivables between one and five years of USD 126.5
million (2014: USD 55.3 million).
Non-cancellable operating lease rentals for office space with an average duration of six years are receivable as follows:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
Less than 1 year
Between 1 and 5 years
More than 5 years
TOTAL NON-CANCELLABLE OPERATING LEASE RENTALS
948
3,360
1,854
6,162
837
3,349
2,791
6,977
The above operating lease rentals receivable relate entirely to the Group’s leased offices for Euronav UK.
Euronav UK has sublet part of the office space to five different subtenants, of which four starting in 2014 and one in 2015.
Amounts recognized in profit and loss
(in thousands of USD)
2015
2014
Bareboat charter
Time charter
Office rental
TOTAL AMOUNTS RECOGNIZED IN PROFIT AND LOSS
-
126,091
879
126,970
-
132,118
337
132,455
NOTE 20 - PROVISIONS & CONTINGENCIES
The Group is involved in a number of disputes in connection with its day-to-day activities, both as claimant and defendant. Such
disputes and the associated expenses of legal representation are covered by insurance. Moreover, they are not of a magnitude that
lies outside the ordinary, and their scope is not of such a nature that they could materially affect the Group’s financial position.
Financial Report 131
NOTE 21 - RELATED PARTIES
Identity of related parties
The Group has a related party relationship with its subsidiaries (see Note 23) and equity-accounted investees (see Note 24) and
with its directors and executive officers (see Note 22).
Transactions with key management personnel
The total amount of the remuneration paid to all non-executive Directors for their services as members of the Board and
Committees (if applicable) is as follows:
(in thousands of EUR)
TOTAL REMUNERATION
2015
2014
1,591
1,401
The Remuneration Committee annually reviews the remuneration of the members of the Executive Committee. The remuneration
(excluding the CEO) consists of a fixed and a variable component and can be summarized as follows:
(in thousands of EUR)
2015
2014
TOTAL FIXED REMUNERATION
of which
Cost of pension
Share-based payments
Other benefits
TOTAL VARIABLE REMUNERATION
2,302
35
1,126
57
1,382
All amounts mentioned refer to the Executive Committee in its official composition throughout 2015.
The remuneration of the CEO can be summarized as follows:
(in thousands of GBP)
2015
2014
TOTAL FIXED REMUNERATION
of which
Cost of pension
Share-based payments
Other benefits
TOTAL VARIABLE REMUNERATION
738
0
333
11
530
3,864
32
2,796
55
734
1,100
13
725
11
295
Within the framework of a stock option plan, the Board of
Directors has granted on December 16, 2013 options on its
1,750,000 treasury shares to the members of the Executive
Committee for no consideration. 525,000 options were granted
to the CEO and 1,225,000 options were granted to the other
members of the Executive Committee. The exercise price of the
options was EUR 5.7705. All of the beneficiaries have accepted
the options granted to them. In 2015 1,283,333 options were
exercised. At the date of this report all of the remaining options
are vested. In addition, the Board of Directors has granted on
February 12, 2015 236,590 options and 65,433 restricted stock
units within the framework of a long term incentive plan.
Vested stock options may be exercised until 13 years after the
grant date (see Note 22).
132 Financial Report
NOTE 21 - RELATED PARTIES (CONTINUED)
Relationship with CMB
In 2004 Euronav split from Compagnie Maritime Belge (CMB)
and currently both have Saverco as a reference shareholder.
CMB used to render some administrative and general services.
In 2015 CMB invoiced a total amount of USD 0 (2014: USD
17,745).
Relationship with Saverco
Saverco, a reference shareholder of Euronav, has rendered
travel services to Euronav on a transactional basis. In 2015,
Saverco invoiced a total amount of USD 0 (2014: USD 15,828).
Properties
The Group leases office space in Belgium from Reslea N.V.,
an entity controlled by Saverco, a reference shareholder of
Euronav. Under this lease, the Group paid an annual rent of
USD 178,104 in 2015 (2014: USD 207,738). This lease expires on
August 31, 2021.
The Group leases office space, through our subsidiary Euronav
Ship Management Hellas, in Piraeus, Greece, from Nea Dimitra
Ktimatiki Kai Emporik S.A., an entity controlled by Ceres
Shipping. Mr. Livanos, a former member of our Board acting
as permanent representative of Tanklog Limited until his
resignation on December 3, 2015, is the Chairman and sole
shareholder of Ceres Shipping. Under this lease, the Group paid
an annual rent of USD 184,791 in 2015 (2014: USD 198,822). This
lease expires on December 31, 2017.
The Group subleases office space in its new London, United
Kingdom office, through its subsidiary Euronav (UK) Agencies
Limited, pursuant to sublease agreements, dated September
25, 2014, with GasLog Services UK Limited and Unisea Maritime
Limited, both parties related to Peter Livanos. Under these
subleases, the Company received in 2015 a rent of USD 495,507
(2014: USD 169,052). This sublease expires on April 27, 2023.
The Company also subleases office space in its new London,
United Kingdom office, through its subsidiary Euronav (UK)
Agencies Limited, pursuant to a sublease agreement, dated
25 September 2014, with Tankers (UK) Agencies Limited, a
wholly-owned subsidiary of Tankers International LLC, of which
the Group owns 40% of the outstanding interests. Under this
sublease, the Company received in 2015 a rent of USD 260,108
(2014: USD 88,738). This sublease expires on April 27, 2023.
Registration Rights
On January 28, 2015 the Group entered into a registration rights
agreement with companies affiliated with our former Chairman,
Peter Livanos, or the Ceres Shareholders, and companies
affiliated with our former Vice Chairman, Marc Saverys, or the
Saverco Shareholders.
Pursuant to the registration rights agreement, each of the Ceres
Shareholders as a group and the Saverco Shareholders as a group
will be able to piggyback on the others’ demand registration.
The Ceres Shareholders and the Saverco Shareholders are only
treated as having made their request if the registration statement
for such shareholder group’s shares is declared effective. Once
we are eligible to do so, commencing 12 calendar months after
the Ordinary Shares have been registered under the Exchange
Act, the Ceres Shareholders and the Saverco Shareholders
may require us to file shelf registration statements permitting
sales by them of ordinary shares into the market from time to
time over an extended period. The Ceres Shareholders and the
Saverco Shareholders can also exercise piggyback registration
rights to participate in certain registrations of ordinary shares
by us. All expenses relating to the registrations, including
the participation of our executive management team in two
marketed roadshows and a reasonable number of marketing
calls in connection with one-day or overnight transactions, will
be borne by us. The registration rights agreement also contains
provisions relating to indemnification and contribution. There
are no specified financial remedies for non-compliance with the
registration rights agreement. At December 31, 2015, no rights
were exercised by any of the parties under the registration rights
agreement.
Transactions with subsidiaries and joint ventures
On March 15, 2013, the Group sold the suezmax Cap Isabella
(2013 – 157,258 dwt) to Belle Shipholdings Ltd Peter Livanos,
at that time the Vice-Chairman of the Board of Directors of the
Group, directly or indirectly holds an important participation
in Belle Shipholdings Ltd Peter Livanos, as the permanent
representative of Tanklog Holdings Ltd, notified Euronav’s
Board of Directors which met on March 14, 2013, that pursuant
to the provisions of the Belgian Code of Companies relating
to the existence of conflicts of interest, he had a direct or
indirect patrimonial interest that conflicts with the interests
of the Company in respect of this sale and therefore, did not
participate in the deliberation or the vote that authorized the
Group to sell the Cap Isabella on the basis of current market
values.
The Cap Isabella was a newbuilding from Samsung Heavy
Industries. The Group chartered the ship back on bareboat
for a fixed period of two years with three options in favor of
the charterer to extend for a further year. In case of a sale by
the new owner during the bareboat charter contract the Group
would also share in any surplus if the vessel value exceeded a
certain threshold. The net selling price of the vessel was USD
52.9 million (see Note 7). On July 31, 2014, the Cap Isabella was
in its turn sold by its owner, Belle Shipholdings Ltd, a company
related to Euronav, to a third-party and was delivered to its
new owner on October 8, 2014. As the original sale and lease
Financial Report 133
NOTE 21 - RELATED PARTIES (CONTINUED)
back agreement between the Group and Belle Shipholdings
Ltd included a profit sharing mechanism for a future sale, a
capital gain on disposal of assets was recorded in the fourth
quarter of 2014 for a total amount of USD 4.3 million.
The Group has supplied funds in the form of shareholders’
advances to some of its joint ventures at pre-agreed conditions
which are always similar for the other party involved in the
joint venture in question (see below and Note 24).
related expenses, but will share in the net revenues, after the
deduction of voyage-related expenses, retroactively on a semi-
annual basis. Calculation of allocations and contributions
under the RSA are based on a pool points system and are
paid after the deduction of the pool fee to Euronav NV, as pool
manager, from the gross pool income. If this RSA had not been
in place, the Group’s profit for the year ended December 31,
2015 would have been impacted with USD (0.9) million (2014:
USD 1.2 million).
A majority of Euronav NV’s Suezmaxes operating in the spot
market participate in an internal Revenue Sharing Agreement,
or RSA, together with four Suezmaxes owned by joint ventures
of which Euronav owns 50%. Under the RSA, each vessel
owner is responsible for its own costs, including voyage-
Balances and transactions between the Group and
its
subsidiaries have been eliminated on consolidation and are
not disclosed in this note. Details of outstanding balances
and transactions between the Group and its joint ventures are
disclosed below:
AS OF END FOR THE YEAR ENDED DECEMBER 31, 2014
(in thousands of USD)
TRADE
RECEIVABLES
TRADE
PAYABLES
SHAREHOLDERS
LOAN
TURNOVER
DIVIDEND
INCOME
TI Africa Ltd
TI Asia Ltd
Fiorano Shipholding Ltd
Fontvieille Shipholding Ltd
Larvotto Shipholding Ltd
Moneghetti Shipholding Ltd
Great Hope Enterprises Ltd
Kingswood Co. Ltd
TOTAL
577
325
150
1,906
192
205
-
-
3,355
-
-
336
150
323
342
-
-
1,151
172,055
93,337
26,416
27,792
24,191
19,623
-
-
363,414
302
361
556
522
565
587
-
-
2,893
-
-
-
-
-
-
9,410
-
9,410
AS OF END FOR THE YEAR ENDED DECEMBER 31, 2015
(in thousands of USD)
TRADE
RECEIVABLES
TRADE
PAYABLES
SHAREHOLDERS
LOAN
TURNOVER
DIVIDEND
INCOME
TI Africa Ltd
TI Asia Ltd
Fiorano Shipholding Ltd
Fontvieille Shipholding Ltd
Larvotto Shipholding Ltd
Moneghetti Shipholding Ltd
Great Hope Enterprises Ltd
Kingswood Co. Ltd
TOTAL
366
247
110
176
770
2,114
-
-
3,783
-
-
32
30
21
44
-
-
127
149,615
72,397
28,141
23,507
26,141
17,949
-
-
317,749
360
360
687
753
653
609
-
-
3,423
-
-
-
-
-
-
275
-
275
John Michael Radziwill, one of our directors, serves as an
advisor of SCP Clover Maritime, a company that manages
assets and investments of Mr. John Radziwill, his father, and
specifically for Bretta Tanker Holdings, Inc., the JV partner
of Euronav in the four joint ventures formed for the purpose
of ordering and owning four Suezmax tankers through the
following holding companies: Fiorano Shipholding Limited,
Fontvielle Shipholding Limited, Larvatto Shipholding Limited
and Moneghetti Shipholding Limited.
134 Financial Report
Guarantees
The Group has provided guarantees to financial institutions
that have provided credit facilities to its joint ventures. As of
December 31, 2015 USD 251.6 million (2014: USD 319.8 million)
was outstanding under the joint venture loan agreements, of
which the Group has guaranteed USD 125.8 million (2014: USD
159.9 million) (see Note 24).
NOTE 22 - SHARE-BASED PAYMENT ARRANGEMENTS
Description of share-based payment arrangements:
At December 31, 2015, the Group had the following share-
based payment arrangements:
of vested options are entitled to purchase shares at the market
price of the shares at the grant date. Currently this program is
Limited to key management personnel.
Share option programs (Equity-settled)
On December 16, 2013, the Group established a share option
program that entitles key management personnel to purchase
existing shares in the Company. Under the program, holders
The Group intends to use its treasury shares to settle its
obligations under this program. The key terms and conditions
related to the grants under these programs are as follows:
GRANT DATE/EMPLOYEES
ENTITLED
Options granted to key
management personnel
December 16, 2013 ("Tranche 1")
December 16, 2013 ("Tranche 2")
December 16, 2013 ("Tranche 3")
TOTAL SHARE OPTIONS
NUMBER OF
INSTRUMENTS
VESTING CONDITIONS
CONTRACTUAL LIFE
OF OPTIONS
583,000
583,000
583,000
1,750,000
Share price to be at least EUR 7.5
Share price to be at least EUR 8.66
Share price to be at least EUR 11.54 and US listing
5 years
5 years
5 years
In addition, 50% of the options can
only be exercised at the earliest
if the shares of the Group are
admitted for listing in a recognized
US listing exchange platform (the
“listing event”). The other 50% can
only be exercised one year after the
listing event. If the Group’s shares
had not been listed on a U.S. listing
exchange, then only two thirds of
the shares would be exercisable
and would have to meet the first
two vesting conditions listed above.
Financial Report 135
Visie en Missie 135
NOTE 22 - SHARE-BASED PAYMENT ARRANGEMENTS (CONTINUED)
Long term incentive plan (Equity-settled)
The Group’s Board of Directors has implemented in 2015 a long
term incentive plan (‘LTIP’) for key management personnel.
Under the terms of this LTIP, the beneficiaries will obtain 40%
of their respective LTIP in the form of Euronav stock options,
with vesting over three years at anniversary date and 60% in
the form of restricted stock units (‘RSU’s’), with cliff vesting on
the third anniversary. In total 236,590 options and 65,433 RSU’s
were granted on February 12, 2015. Vested stock options may
be exercised until 13 years after the grant date.
Measurement of Fair Value
The fair value of the employee share options under the 2013
program and the 2015 LTIP has been measured using the
Black-Scholes formula. Service and non-market performance
conditions attached to the transactions were not taken into
account in measuring fair value.
The inputs used in measurement of the fair values at grant
date for the equity-settled share option programs were as
follows:
(Figures in EUR)
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility (weighted average)
Expected life (days) (weighted average)
Expected dividends
Risk-free interest rate
SHARE OPTION PROGRAM 2013
TRANCHE 1
2.270
6.070
5.770
40%
303
-
1%
TRANCHE 2
2.260
6.070
5.770
40%
467
-
1%
TRANCHE 3
2.120
6.070
5.770
40%
730
-
1%
TRANCHE 1
1.853
10.050
10.0475
39.63%
365
8%
0.66%
LTIP 2015
TRANCHE 2
1.853
10.050
10.0475
39.63%
730
8%
0.66%
TRANCHE 3
1.853
10.050
10.0475
39.63%
1,095
8%
0.66%
Expected volatility has been based on an evaluation of the
historical volatility of the Company’s share price, particularly
over the historical periods commensurate with the expected
term. The expected term of the instruments has been based on
historical experience and general option holder behavior using a
Monte Carlo simulation.
The fair value of the RSUs under the 2015 LTIP was measured
with reference to the Euronav share price at the grant date. All of
the RSUs granted on February 12, 2015 remained outstanding as
of December 31, 2015 and had not yet vested.
Expenses recognized in profit or loss
For details on related employee benefits expense see Note 4.
Reconciliation of outstanding share options
The number and weighted-average exercise prices of options
under the 2013 program and the 2015 LTIP are as follows:
(Figures in EUR)
Outstanding at 1 January
Forfeited during the year
Exercised during the year
Granted during the year
OUTSTANDING AT DECEMBER 31
Vested at 31 December
NUMBER OF
OPTIONS 2015
1,750,000
-
(1,283,333)
236,590
703,257
466,667
WEIGHTED AVERAGE
EXERCISE PRICE 2015
5.770
-
5.770
10.0475
7.209
-
NUMBER OF
OPTIONS 2014
1,750,000
-
-
-
1,750,000
1,166,167
WEIGHTED AVERAGE
EXERCISE PRICE 2014
5.770
-
-
-
5.770
-
In May 2015, the holders exercised two thirds of the share
options under the 2013 program which resulted in the sale
of 1,166,666 treasury shares. In December 2015 an additional
116,667 of share options were exercised under the 2013
program, resulting in the sale of a corresponding number of
treasury shares. In February 2015 236,590 share options were
granted related to the 2015 long term incentive plan.
136 Financial Report
The weighted-average share price at the date of exercise for
the share options exercised in 2015 was EUR 11.65 (2014: no
share options exercised)
NOTE 23 - GROUP ENTITIES
COUNTRY OF
INCORPORATION
CONSOLIDATION
METHOD
OWNERSHIP INTEREST
DECEMBER 31, 2015 DECEMBER 31, 2014
PARENT
Euronav NV
SUBSIDIARIES
Euronav Tankers NV
Euronav Shipping NV
Euronav (UK) Agencies Ltd
Euronav Luxembourg SA
Euronav SAS
Euronav Ship Management SAS
Euronav Ship Management Ltd
Euronav Ship Management Hellas (branch office)
Euronav Hong Kong
Euro-Ocean Shipmanagement (Cyprus) Ltd
Euronav Singapore
JOINT VENTURES
Africa Conversion Corp.
Asia Conversion Corp.
Fiorano Shipholding Ltd
Fontvieille Shipholding Ltd
Great Hope Enterprises Ltd
Kingswood Co. Ltd
Larvotto Shipholding Ltd
Moneghetti Shipholding Ltd
Seven Seas Shipping Ltd
TI Africa Ltd
TI Asia Ltd
ASSOCIATES
Tankers International LLC
VLCC Chartering Ltd
Belgium
Belgium
Belgium
UK
Luxembourg
France
France
Liberia
Hong Kong
Cyprus
Singapore
Marshall Islands
Marshall Islands
Hong Kong
Hong Kong
Hong Kong
Marshall Islands
Hong Kong
Hong Kong
Marshall Islands
Hong Kong
Hong Kong
Marshall Islands
Marshall Islands
full
full
full
full
full
full
full
full
full
full
full
equity
equity
equity
equity
equity
equity
equity
equity
equity
equity
equity
equity
equity
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
NA
NA
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
40.00%
20.00%
NA
NA
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
NA
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
40.00%
20.00%
Although the Group has an economic interest in Tankers International LLC of 62.86% (2014: 74.20%), which is based on the
percentage of owned vessels participating in the Tankers International Pool, the Group has no majority of voting rights as this is
based on the actual shares owned by the Group which is only 40%. Therefore Tankers International LLC is accounted for as an
associate.
In 2015 two joint ventures, Asia Conversion Corporation and Africa Conversion Corporation, have been dissolved.
Financial Report 137
Visie en Missie 137
NOTE 24 - EQUITY-ACCOUNTED INVESTEES
(in thousands of USD)
ASSETS
Interest in joint ventures
Interest in associates
TOTAL ASSETS
LIABILITIES
Interest in joint ventures
Interest in associates
TOTAL LIABILITIES
Associates
(in thousands of USD)
Carrying amount of interest at the beginning of the year
Group's share of profit (loss) for the period
Group's share of other comprehensive income
CARRYING AMOUNT OF INTEREST AT THE END OF THE YEAR
The Group distinguishes the following associates:
ASSOCIATE
SEGMENT
Tankers International LLC
Tankers
VLCC Chartering Ltd
Tankers
DECEMBER 31, 2015
DECEMBER 31, 2014
20,425
1,212
21,637
-
-
-
16,305
1,027
17,332
(5,880)
-
(5,880)
DECEMBER 31, 2015
1,027
185
-
1,212
DECEMBER 31, 2014
409
618
-
1,027
DESCRIPTION
The manager of the Tankers International Pool who
commercially manages the majority of the Group's VLCCs
Chartering joint venture that has the combined access to the
combined fleets of Frontline and Tankers International Pool
138 Financial Report
NOTE 24 - EQUITY-ACCOUNTED INVESTEES (CONTINUED)
Joint Ventures
The Group distinguishes the following joint ventures:
(in thousands of USD)
ASSET
LIABILITY
GROSS BALANCE
Offset investment with shareholders loan
BALANCE AT JANUARY 1, 2014
Group's share of profit (loss) for the period
Group's share of other comprehensive income
Capital increase/(decrease) in joint ventures
Dividends received from joint ventures
Movement shareholders loans to joint ventures
GROSS BALANCE
Offset investment with shareholders loan
BALANCE AT DECEMBER 31, 2014
Group's share of profit (loss) for the period
Group's share of other comprehensive income
Capital increase/(decrease) in joint ventures
Dividends received from joint ventures
Movement shareholders loans to joint ventures
GROSS BALANCE
Offset investment with shareholders loan
BALANCE AT DECEMBER 31, 2015
INVESTMENTS
IN EQUITY
ACCOUNTED
INVESTEES
(110,702)
133,406
22,704
29,668
2,106
(1,000)
(9,410)
-
(89,338)
105,643
16,305
51,407
1,610
(1,500)
(275)
-
(38,095)
58,520
20,425
SHAREHOLDERS
LOANS
392,922
(133,406)
259,516
-
-
-
-
(29,508)
363,414
(105,643)
257,771
-
-
-
-
(45,665)
317,749
(58,520)
259,229
INVESTMENTS
IN EQUITY
ACCOUNTED
INVESTEES
(5,880)
-
(5,880)
-
-
-
-
-
(5,880)
-
(5,880)
-
-
5,880
-
-
-
-
-
SHAREHOLDERS
LOANS
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
As the shipping market and the corresponding revenues are
volatile, the Group has opted to give long-term shareholders
loans to some of its equity-accounted investees, rather than
increasing the capital in these companies. Over the last
couple of years these joint ventures have made losses which
resulted in a negative equity. As the Group is also a guarantor
for these joint ventures and the shareholders loans can not
be recalled within one year, the negative equity is offset with
these shareholders loans. For more details, we refer to the
table summarizing the financial information of the Group’s
joint ventures further below.
JOINT VENTURE
Great Hope Enterprises Ltd
Kingswood Co. Ltd
Seven Seas Shipping Ltd
Fiorano Shipholding Ltd
Fontvieille Shipholding Ltd
Larvotto Shipholding Ltd
Moneghetti Shipholding Ltd
TI Africa Ltd
TI Asia Ltd
Africa Conversion Corp
Asia Conversion Corp
SEGMENT
Tankers
Tankers
Tankers
Tankers
Tankers
Tankers
Tankers
FSO
FSO
FSO
FSO
DESCRIPTION
Single ship company, owner of 1 VLCC
Holding company; parent of Seven Seas Shipping Ltd
Single ship company, owner of 1 VLCC
Single ship company, owner of 1 Suezmax
Single ship company, owner of 1 Suezmax
Single ship company, owner of 1 Suezmax
Single ship company, owner of 1 Suezmax
Operator and owner of a single floating storage and offloading facility (FSO Africa)*
Operator and owner of a single floating storage and offloading facility (FSO Asia)*
No operating activities, liquidated in 2015
No operating activities, liquidated in 2015
* Both FSO Asia and FSO Africa are on a time charter contract to Maersk Oil Qatar (MOQ) until mid 2017.
Financial Report 139
NOTE 24 - EQUITY-ACCOUNTED INVESTEES (CONTINUED)
The following table contains summarized financial information for all of the Group’s joint ventures:
ASSET
GREAT HOPE
ENTERPRISES
LTD
KINGSWOOD
CO. LTD
SEVEN SEAS
SHIPPING LTD
FIORANO
SHIPHOLDING
LTD
FONTVIEILLE
SHIPHOLDING
LTD
ASSET
LARVOTTO
MONEGHETTI
SHIPHOLDING
SHIPHOLDING
LTD
LTD
TI AFRICA
LTD
TI ASIA
LTD
50%
-
-
763
278
-
-
130
-
633
317
-
50%
204
-
810
-
-
-
2
-
50%
34,786
34,786
7,473
3,245
6,704
6,500
4,591
4,333
50%
82,883
82,883
5,445
711
84,894
32,063
15,341
4,250
50%
70,670
70,670
6,719
1,136
90,054
34,470
7,773
4,000
50%
77,805
77,805
6,087
1,633
81,494
33,113
16,097
3,970
50%
73,433
73,433
3,786
1,218
86,997
47,750
5,251
4,000
50%
231,370
226,239
39,864
22,017
351,057
-
32,351
13,750
50%
224,460
218,385
64,441
31,098
297,510
104,200
29,426
27,446
795,611
784,201
135,388
61,336
998,710
258,096
110,962
61,749
1,012
30,964
(11,907)
(20,438)
(13,699)
(15,029)
(112,174)
(38,035)
(178,673)
(6,880)
(4,880)
(11,760)
506
15,482
(5,954)
(10,219)
(6,850)
(7,515)
(56,087)
(19,018)
(89,338)
(3,440)
(2,440)
(5,880)
-
-
26,416
27,792
24,191
19,623
172,055
93,337
363,414
317
506
15,482
-
-
-
-
-
-
16,305
(3,440)
(2,440)
(5,880)
-
113
-
(257)
-
4,510
-
2,255
-
-
-
-
-
-
7
-
4
-
-
20,462
17,573
17,341
12,108
115,968
74,319
257,771
10,228
(3,360)
(162)
-
3,504
-
1,752
17,017
(4,852)
(1,093)
-
(1,453)
-
15,706
(4,603)
(1,100)
-
(2,852)
-
(727)
(1,426)
(741)
(903)
15,602
-
-
-
17,092
(4,571)
(1,263)
16,047
(4,586)
(1,469)
62,261
(18,209)
(1,963)
(1,481)
(1,805)
31,204
-
-
-
-
-
64,096
(17,933)
(7,458)
-
27,702
4,212
13,851
202,560
(58,114)
(14,765)
-
59,336
4,212
29,668
2,106
2,106
-
-
-
TOTAL
CONVERSION
CONVERSION
TOTAL
LIABILITY
AFRICA
ASIA
CORP
CORP
50%
50%
6,880
4,880
11,760
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(in thousands of USD)
AT DECEMBER 31, 2014
Percentage ownership interest
NON-CURRENT ASSETS
of which Vessel
CURRENT ASSETS
of which cash and cash equivalents
NON-CURRENT LIABILITIES
of which bank loans
CURRENT LIABILITIES
of which bank loans
NET ASSETS (100%)
Group’s share of net assets
Shareholders’ loans to joint venture
NET CARRYING AMOUNT OF INTEREST
IN JOINT VENTURE
REMAINING SHAREHOLDERS LOAN
TO JOINT VENTURE
Revenue
Depreciations and amortization
Interest Expense
Income tax expense
Profit (loss) for the period (100%)
Other comprehensive income (100%)
GROUP'S SHARE OF PROFIT (LOSS)
FOR THE PERIOD
GROUP'S SHARE OF OTHER
COMPREHENSIVE INCOME
140 Financial Report
(in thousands of USD)
AT DECEMBER 31, 2014
Percentage ownership interest
NON-CURRENT ASSETS
of which Vessel
CURRENT ASSETS
of which cash and cash equivalents
NON-CURRENT LIABILITIES
of which bank loans
CURRENT LIABILITIES
of which bank loans
NET ASSETS (100%)
NET CARRYING AMOUNT OF INTEREST
IN JOINT VENTURE
REMAINING SHAREHOLDERS LOAN
TO JOINT VENTURE
Revenue
Depreciations and amortization
Interest Expense
Income tax expense
Profit (loss) for the period (100%)
Other comprehensive income (100%)
GROUP'S SHARE OF PROFIT (LOSS)
FOR THE PERIOD
GROUP'S SHARE OF OTHER
COMPREHENSIVE INCOME
LTD
50%
763
278
130
633
317
-
-
-
-
-
-
-
-
-
-
-
113
(257)
4,510
2,255
50%
204
810
-
-
-
-
2
-
-
-
-
-
-
-
7
-
4
-
NOTE 24 - EQUITY-ACCOUNTED INVESTEES (CONTINUED)
The following table contains summarized financial information for all of the Group’s joint ventures:
ASSET
ASSET
GREAT HOPE
ENTERPRISES
KINGSWOOD
SEVEN SEAS
CO. LTD
SHIPPING LTD
FIORANO
FONTVIEILLE
SHIPHOLDING
SHIPHOLDING
LTD
LTD
LARVOTTO
SHIPHOLDING
LTD
MONEGHETTI
SHIPHOLDING
LTD
TI AFRICA
LTD
TI ASIA
LTD
TOTAL
50%
34,786
34,786
7,473
3,245
6,704
6,500
4,591
4,333
50%
82,883
82,883
5,445
711
84,894
32,063
15,341
4,250
50%
70,670
70,670
6,719
1,136
90,054
34,470
7,773
4,000
50%
77,805
77,805
6,087
1,633
81,494
33,113
16,097
3,970
50%
73,433
73,433
3,786
1,218
86,997
47,750
5,251
4,000
50%
231,370
226,239
39,864
22,017
351,057
-
32,351
13,750
50%
224,460
218,385
64,441
31,098
297,510
104,200
29,426
27,446
795,611
784,201
135,388
61,336
998,710
258,096
110,962
61,749
1,012
30,964
(11,907)
(20,438)
(13,699)
(15,029)
(112,174)
(38,035)
(178,673)
LIABILITY
AFRICA
CONVERSION
CORP
ASIA
CONVERSION
CORP
TOTAL
50%
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,880
-
(6,880)
4,880
-
11,760
-
(4,880)
(11,760)
Group’s share of net assets
506
15,482
(5,954)
(10,219)
(6,850)
(7,515)
(56,087)
(19,018)
(89,338)
(3,440)
(2,440)
(5,880)
Shareholders’ loans to joint venture
-
26,416
27,792
24,191
19,623
172,055
93,337
363,414
-
-
-
317
506
15,482
-
-
-
-
-
-
16,305
(3,440)
(2,440)
(5,880)
-
20,462
17,573
17,341
12,108
115,968
74,319
257,771
10,228
(3,360)
(162)
17,017
(4,852)
(1,093)
15,706
(4,603)
(1,100)
3,504
(1,453)
(2,852)
-
-
-
-
-
-
-
-
-
17,092
(4,571)
(1,263)
-
16,047
(4,586)
(1,469)
-
(1,481)
(1,805)
-
62,261
(18,209)
(1,963)
-
31,204
-
1,752
(727)
(1,426)
(741)
(903)
15,602
64,096
(17,933)
(7,458)
-
27,702
4,212
13,851
202,560
(58,114)
(14,765)
-
59,336
4,212
29,668
-
-
-
2,106
2,106
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial Report 141
NOTE 24 - EQUITY-ACCOUNTED INVESTEES (CONTINUED)
(in thousands of USD)
AT DECEMBER 31, 2015
Percentage ownership interest
NON-CURRENT ASSETS
of which Vessel
CURRENT ASSETS
of which cash and cash equivalents
NON-CURRENT LIABILITIES
of which bank loans
CURRENT LIABILITIES
of which bank loans
NET ASSETS (100%)
Group’s share of net assets
Shareholders loans to joint venture
NET CARRYING AMOUNT OF INTEREST
IN JOINT VENTURE
REMAINING SHAREHOLDERS LOAN
TO JOINT VENTURE
Revenue
Depreciations and amortization
Interest Expense
Income tax expense
Profit (loss) for the period (100%)
Other comprehensive income (100%)
GROUP'S SHARE OF PROFIT (LOSS)
FOR THE PERIOD
GROUP'S SHARE OF OTHER
COMPREHENSIVE INCOME
ASSET
GREAT HOPE
ENTERPRISES
LTD
KINGSWOOD
CO. LTD
SEVEN SEAS
SHIPPING LTD
FIORANO
SHIPHOLDING
LTD
FONTVIEILLE
SHIPHOLDING
LTD
ASSET
LARVOTTO
MONEGHETTI
SHIPHOLDING
SHIPHOLDING
LTD
LTD
TI AFRICA
LTD
TI ASIA
LTD
50%
-
-
102
59
-
-
15
-
87
43
-
43
-
1
-
-
-
3
-
2
-
50%
520
-
489
-
-
-
2
-
50%
33,052
33,052
7,463
1,528
521
-
239
-
1,007
39,755
50%
78,031
78,031
6,498
552
84,094
27,813
5,981
4,250
(5,546)
50%
65,837
65,837
4,195
186
77,485
30,470
6,656
4,000
(14,109)
50%
70,159
70,159
7,219
4,891
79,647
43,750
7,099
4,000
50%
215,184
208,030
12,144
880
303,018
1,155
-
-
(9,368)
(76,844)
50%
208,405
200,452
41,744
30,465
223,552
75,343
30,832
28,858
(4,236)
744,422
728,794
87,727
40,139
849,740
206,518
58,601
45,078
(76,192)
504
19,878
(2,773)
(7,054)
(3,469)
(4,684)
(38,422)
(2,118)
(38,095)
-
-
28,141
23,507
26,141
17,949
149,615
72,397
317,749
504
19,878
-
-
-
-
-
-
20,425
-
-
-
-
-
(4)
-
(2)
-
-
25,368
16,453
22,672
13,265
111,193
70,279
259,229
18,701
(3,601)
(102)
-
11,791
-
5,895
21,050
(4,852)
(530)
-
6,361
-
3,181
21,509
(4,832)
(851)
-
6,330
-
3,165
-
-
-
-
1,610
1,610
64,382
(17,933)
(6,106)
106
30,580
3,220
234,425
(58,628)
(10,623)
365
102,814
3,220
21,317
(4,630)
(1,170)
5,661
-
-
-
64,627
(18,209)
(1,220)
259
35,329
-
-
3,381
2,831
17,664
15,290
51,407
50%
73,234
73,234
7,873
1,578
81,424
29,143
6,621
3,970
(6,939)
22,837
(4,571)
(644)
-
6,762
TOTAL
CONVERSION
CONVERSION
TOTAL
LIABILITY
AFRICA
ASIA
CORP
CORP
50%
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Loans and borrowings
In October 2008, TI Asia Ltd and TI Africa Ltd concluded a USD 500
million senior secured credit facility. The facility consists of a term
loan of USD 180 million which was used to finance the acquisition
of two V-Plus vessels, the TI Asia and the TI Africa respectively from
Euronav and OSG and a project finance loan of USD 320 million which
has been used to finance the conversion of the above mentioned
vessels into FSO. Following the termination of the original service
contract related to the FSO Africa and the signature of a new
contract for the FSO Africa with the same client the Tranche of the
facility related to FSO Africa was restructured. The tranche related
to FSO Asia matures in 2017 and has a rate of Libor + a margin of
1.15%. After the restructuring the tranche related to FSO Africa was
maturing in August 2013 with a balloon of USD 45,000,000 and had
a rate of Libor + a margin of 2.25%. In 2013, the Africa Tranche was
extended until 2015 and at August 28, 2015 it was fully repaid. The
total amount drawn under this facility (Euronav share) on December
31, 2015 was USD 52,100,244 (2014: USD 72,698,234.50).
In the course of 2008, the joint venture companies, Fiorano
Shipholding Ltd, Fontvieille Shipholding Ltd, Larvotto Shipholding
Ltd and Moneghetti Shipholding Ltd concluded pre and post-
delivery senior secured credit facilities to build a total of four
Suezmax Vessels.
All bank loans in the joint ventures are secured by the underlying
vessel or FSO.
142 Financial Report
NOTE 24 - EQUITY-ACCOUNTED INVESTEES (CONTINUED)
ASSET
ASSET
GREAT HOPE
ENTERPRISES
KINGSWOOD
SEVEN SEAS
CO. LTD
SHIPPING LTD
FIORANO
FONTVIEILLE
SHIPHOLDING
SHIPHOLDING
LTD
LTD
LARVOTTO
SHIPHOLDING
LTD
MONEGHETTI
SHIPHOLDING
LTD
TI AFRICA
LTD
TI ASIA
LTD
TOTAL
50%
33,052
33,052
7,463
1,528
521
239
-
-
50%
78,031
78,031
6,498
552
84,094
27,813
5,981
4,250
(5,546)
50%
65,837
65,837
4,195
186
77,485
30,470
6,656
4,000
(14,109)
1,007
39,755
50%
73,234
73,234
7,873
1,578
81,424
29,143
6,621
3,970
(6,939)
50%
70,159
70,159
7,219
4,891
79,647
43,750
7,099
4,000
50%
215,184
208,030
12,144
880
303,018
-
1,155
-
(9,368)
(76,844)
50%
208,405
200,452
41,744
30,465
223,552
75,343
30,832
28,858
(4,236)
744,422
728,794
87,727
40,139
849,740
206,518
58,601
45,078
(76,192)
Group’s share of net assets
504
19,878
(2,773)
(7,054)
(3,469)
(4,684)
(38,422)
(2,118)
(38,095)
Shareholders loans to joint venture
-
28,141
23,507
26,141
17,949
149,615
72,397
317,749
504
19,878
-
-
-
-
-
-
20,425
-
25,368
16,453
22,672
13,265
111,193
70,279
259,229
18,701
(3,601)
(102)
21,050
(4,852)
(530)
21,509
(4,832)
(851)
11,791
6,361
6,330
5,895
3,181
3,165
-
-
-
-
-
-
-
-
-
22,837
(4,571)
(644)
-
6,762
3,381
21,317
(4,630)
(1,170)
-
5,661
-
2,831
64,627
(18,209)
(1,220)
259
35,329
-
64,382
(17,933)
(6,106)
106
30,580
3,220
234,425
(58,628)
(10,623)
365
102,814
3,220
17,664
15,290
51,407
-
-
-
1,610
1,610
(in thousands of USD)
AT DECEMBER 31, 2015
Percentage ownership interest
NON-CURRENT ASSETS
of which Vessel
CURRENT ASSETS
of which cash and cash equivalents
NON-CURRENT LIABILITIES
of which bank loans
CURRENT LIABILITIES
of which bank loans
NET ASSETS (100%)
NET CARRYING AMOUNT OF INTEREST
IN JOINT VENTURE
REMAINING SHAREHOLDERS LOAN
TO JOINT VENTURE
Revenue
Depreciations and amortization
Interest Expense
Income tax expense
Profit (loss) for the period (100%)
Other comprehensive income (100%)
GROUP'S SHARE OF PROFIT (LOSS)
FOR THE PERIOD
GROUP'S SHARE OF OTHER
COMPREHENSIVE INCOME
LTD
50%
-
-
102
59
-
-
-
15
87
43
-
43
-
1
-
-
-
3
-
2
-
50%
520
489
-
-
-
-
2
-
-
-
-
-
-
-
-
-
(4)
(2)
LIABILITY
AFRICA
CONVERSION
CORP
ASIA
CONVERSION
CORP
TOTAL
50%
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The following table summarizes the terms and debt repayment profile of the bank loans held by the joint ventures:
(in thousands of USD)
DECEMBER 31, 2015
DECEMBER 31, 2014
TI Asia Ltd *
TI Africa Ltd *
Great Hope Enterprises Ltd
Seven Seas Shipping Ltd
Moneghetti Shipholding Ltd *
Fontvieille Shipholding Ltd *
Larvotto Shipholding Ltd *
Fiorano Shipholding Ltd *
TOTAL INTEREST-BEARING
BANK LOANS
CURRENCY
USD
USD
USD
USD
USD
USD
USD
USD
NOMINAL
INTEREST RATE
libor +1.15%
libor +2.75%
libor +2.70%
libor +0.80%
libor +2.75%
libor +2.75%
libor +1.50%
libor +1.225%
YEAR OF
MATURITY
2017
2015
2018
2017
2021
2020
2020
2020
FACE
VALUE
104,200
-
-
-
47,750
34,470
33,113
32,063
CARRYING
VALUE
104,200
-
-
-
47,750
34,470
33,113
32,063
FACE
VALUE
131,646
13,750
-
10,833
51,750
38,470
37,083
36,312
CARRYING
VALUE
131,646
13,667
-
10,833
51,750
38,470
37,083
36,312
251,595
251,595
319,844
319,761
* The mentioned secured bank loans are subject to loan covenants such as an Asset Protection clause. A future breach of covenants might require the
joint venture to repay (part of) the loan earlier than expected.
Financial Report 143
NOTE 24 - EQUITY-ACCOUNTED INVESTEES (CONTINUED)
Loan covenant
The OSG’s Chapter 11 filing has had no impact on the continued
operations of the FSO joint venture, including the ability of the
joint venture to continue to perform its obligations under the
existing charters as well as its ability to continue to service
its outstanding debt obligations and maintain continued
compliance with the covenants under such debt agreements.
On November 12, 2012, MOQ issued a waiver to the FSO
joint venture agreeing not to exercise its rights to terminate
the service contracts. The initial waiver period expired on
February 15 2013 and was subsequently extended to February
15, 2014, with MOQ having the right to terminate such waiver
at an earlier date upon occurrence of certain events or after
giving a 90-day notice of its intent to do so. In November
2012, the joint venture also obtained waivers of any events
of default arising as a result of the commencement of the
Chapter 11 Cases from (i) the bank syndicate that funds its
loan facilities, (ii) the counterparties to the interest rate swaps
agreements described below, and (iii) the bank that has issued
performance guarantees of the joint venture’s performance
of certain of its obligations under the FSO Africa and FSO
Asia service contracts. The initial waiver periods on all such
waivers expired on February 15, 2013 and were subsequently
extended to February 15, 2014 and again extended until July
15, 2014 subject to the occurrence of certain events. As OSG
emerged from Chapter 11 in August 2014, the waivers were
not extended.
For two secured vessel loans of its joint ventures, the Group
negotiated in the course of 2013 with the lenders a one-year
relaxation of the Asset Protection clause from 125% down
to 100% (until December 31, 2013) against an increase of
the margin above the LIBOR rate to 2.75%. The margin was
reduced to 2.00% at the end of the relaxation period in 2014.
The asset protection clause was tested again at the end of April
2014 and the Group was again in compliance with the Asset
Protection clause. The waiver was therefore not extended.
As at December 31, 2015, all joint ventures were in compliance
with the covenants and asset protection clauses, as applicable,
of their respective loans.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents of the joint ventures
Group's share of cash and cash equivalents
of which restricted cash
Interest rate swaps
Two of the Group’s JV companies in connection to the FSO
conversion project of the TI Asia and TI Africa have also
entered in two Interest Rate Swap instruments for a combined
notional value of USD 480 million (Euronav’s share amounts
to 50%). These IRSs are used to hedge the risk related to any
fluctuation of the Libor rate and have a duration of eight years
starting respectively in July 2009 and September 2009 for FSO
Asia and FSO Africa.
Following the termination of the original service contract
related to the FSO Africa on January 22, 2010 and the
consecutive reduction of financing, the hedge related to that
tranche lost its qualification as hedging instrument in a cash
flow hedge relationship under IAS 39. As such the cash flows
from this IRS are expected to occur and affect profit or loss
of the joint venture as from 2010 through 2017. Fair value at
December 31, 2015: USD -3,787,147 (2014: USD -7,028,986).
However the hedge related to the financing of FSO Asia still
qualifies fully as a hedging instrument in a cash flow hedge
relationship under IAS 39. This instrument is measured at fair
value; effective changes in fair value are recognized in equity
of the joint venture and the ineffective portion is recorded in
profit or loss of the joint venture. Fair value at December 31,
2015: USD -3,416,056 (2014: USD -6,635,559).
Vessels
On January 2, 2014 Great Hope Entreprise Ltd delivered the
VLCC Ardenne Venture (2004 - 318,658 dwt) to its new owners
after the sale announced on 14 November 2013 for USD 41.7
million. The Group’s share in the capital gain amounts to USD
2.2 million and was recognized in the first quarter of 2014.
There were no capital commitments as per December 31,
2015 and December 31, 2014.
2015
2014
40,139
20,069
9,022
61,336
30,668
15,547
144 Financial Report
NOTE 25 - SUBSIDIARIES
The Group holds 100% of the voting rights in all of its
subsidiaries (see Note 23).
In 2015 one new wholly owned subsidiary, Euronav Singapore
Pte Ltd, incorporated in the second quarter of 2015 was
included in the consolidation scope. In 2014 two wholly owned
subsidiaries, Euronav Shipping NV and Euronav Tankers NV,
incorporated in the first quarter of 2014, were added to the
consolidation scope. These two subsidiaries became the
owner and operator of (part of) the vessels acquired from
Maersk in 2014.
NOTE 26 - MAJOR EXCHANGE RATES
The following major exchange rates have been used in preparing the consolidated financial statements:
1 XXX = X.XXXX USD
DECEMBER 31, 2015
DECEMBER 31, 2014
2015
2014
CLOSING RATES
AVERAGE RATES
EUR
GBP
1.0887
1.4833
1.2141
1.5587
1.1154
1.5315
1.3349
1.6521
NOTE 27 - AUDIT FEES
The audit fees for the Group amounted to USD 0.7 million (2014:
USD 0.5 million). During the year the statutory auditor and
persons professionally related to him performed additional
audit related services amounting to USD 0.2 million (2014:
USD 1.5 million) and tax services for fees of USD 0.0 million
(2014: 0.1 million). The 2015 and 2014 audit related services
mainly relate to the Group’s series of capital transactions,
including the Group’s US listing.
NOTE 28 - SUBSEQUENT EVENTS
On January 15, 2016, the Company sold the VLCC Famenne
(2001 - 298,412 dwt), one of its two oldest VLCC vessels,
for USD 38.4 million. The vessel was wholly owned by the
Group. The capital gain on that sale of USD 13.8 million will
be recorded at delivery. Following the sale, the availability of
the revolver under the USD 750 million facility was reduced by
USD 23.7 million. The vessel is expected to be delivered to its
new owner in the course of the first quarter 2016.
On January 26, 2016 Euronav took delivery of the second
vessel of four VLCCs which were acquired as resales of
existing newbuilding contracts as announced on 16 June 2015:
the VLCC Alice (2016 – 299,320 dwt).
The Group purchased during January 2016 500,000 of its
own shares on Euronext Brussels at an aggregate cost of
EUR 4,762,784.20 (USD: 5,185,243). Following this transaction,
the Company now owns 966,667 own shares (0.61% of the total
outstanding shares).
Financial Report 145
NOTE 29 - STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE FAIR OVERVIEW OF THE
MANAGEMENT REPORT
The Board of Directors, represented by Carl Steen, its
Chairman, and the Executive Committee, represented by
Patrick Rodgers, the CEO, and Hugo De Stoop, the CFO, hereby
confirm that, to the best of their knowledge, the consolidated
financial statements for the year ended December 31, 2015,
which have been prepared in accordance with International
Financial Reporting Standards
the
International Accounting Standards Board (IASB) as adopted
by the European Union, give a true and fair view of the assets,
issued by
(IFRS)
liabilities, financial position and profit or loss of the Group
and the entities included in the consolidation as a whole, and
that the management report includes a fair overview of the
important events that have occurred during the financial year
and of the major transactions with the related parties, and
their impact on the consolidated financial statements, together
with a description of the principal risks and uncertainties they
are exposed to.
146 Financial Report
STATUTORY AUDITOR’S REPORT TO THE GENERAL MEETING OF EURONAV NV
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2015
In accordance with the legal requirements, we report to you in the
context of our statutory auditor’s mandate. This report includes
our report on the consolidated financial statements as of and for
the year ended December 31, 2015, as defined below, as well as
our report on other legal and regulatory requirements.
Report on the consolidated financial statements -
Unqualified opinion
We have audited the consolidated financial statements of Euronav
NV (“the Company”) and its subsidiaries (jointly “the Group”),
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union, and with the
legal and regulatory requirements applicable in Belgium. These
consolidated financial statements comprise the consolidated
statement of financial position as at December 31, 2015 and the
consolidated statements of profit or loss, comprehensive income,
changes in equity and cash flows for the year then ended, and
notes, comprising a summary of significant accounting policies
and other explanatory information. The total of the consolidated
statement of financial position amounts to USD‘000 3.040.746
and the consolidated statement of profit or loss shows a profit for
the year of USD’000 350.301.
Board of directors’ responsibility for the preparation of the
consolidated financial statements
The board of directors is responsible for the preparation of these
consolidated financial statements that give a true and fair view in
accordance with International Financial Reporting Standards as
adopted by the European Union, and with the legal and regulatory
requirements applicable in Belgium, and for such internal control
as the board of directors determines is necessary to enable the
preparation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
Statutory auditor’s responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit
in accordance with International Standards on Auditing (ISAs).
Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the statutory
auditor’s judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments,
the statutory auditor considers internal control relevant to the
Group’s preparation and fair presentation of the consolidated
financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal
control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting
estimates made by the board of directors, as well as evaluating
the overall presentation of the consolidated financial statements.
We have obtained from the Company’s officials and the Board
of Directors the explanations and information necessary for
performing our audit.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our unqualified opinion.
Unqualified opinion
In our opinion, the consolidated financial statements give a true
and fair view of the Group’s equity and consolidated financial
position as at December 31, 2015 and of its consolidated financial
performance and its consolidated cash flows for the year then
ended in accordance with International Financial Reporting
Standards as adopted by the European Union, and with the legal
and regulatory requirements applicable in Belgium.
Report on other legal and regulatory requirements
The Board of Directors is responsible for the preparation and
the content of the annual report on the consolidated financial
statements.
In the context of our mandate and in accordance with the Belgian
standard which is complementary to the International Standards
on Auditing as applicable in Belgium, our responsibility is to
verify, in all material respects, compliance with certain legal and
regulatory requirements. On this basis, we provide the following
additional statement which does not modify the scope of our
opinion on the consolidated financial statements:
• The annual report on the consolidated financial statements
includes the information required by law, is consistent, in all
material respects, with the consolidated financial statements
and does not present any material inconsistencies with the
information that we became aware of during the performance
of our mandate.
Kontich, March 15, 2016
KPMG Réviseurs d’Entreprises / Bedrijfsrevisoren
Statutory Auditor
represented by
Serge Cosijns
Réviseur d’Entreprises /
Bedrijfsrevisor
Götwin Jackers
Réviseur d’Entreprises /
Bedrijfsrevisor
Financial Report 147
STATUTORY FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 2015
December 31, 2015
December 31, 2014
2,219,814,604
236,021
1,516,093,550
703,485,032
316,162,143
-
160,019,351
63,946,720
45,894,010
46,302,062
2,535,976,746
2,302,109,527
22,242
1,410,782,594
891,304,692
365,561,623
-
88,233,118
166,532,880
81,833,354
28,962,271
2,667,671,151
December 31, 2015
December 31, 2014
1,717,774,802
173,046,122
1,215,227,175
111,297,384
218,204,121
4,376,042
4,376,042
813,825,902
611,070,981
171,230,667
31,524,255
2,535,976,746
1,429,550,808
142,440,546
941,770,042
100,626,275
244,713,945
9,772,443
9,772,443
1,228,347,899
981,043,920
208,947,082
38,356,898
2,667,671,151
Balance Sheet of Euronav NV
for the period ended December 31, 2015
ASSETS
(in USD)
FIXED ASSETS
Intangible assets
Tangible assets
Financial assets
CURRENT ASSETS
Amounts receivable after one year
Amounts receivable within one year
Investments
Cash at bank and in hand
Deferred charges and accrued income
TOTAL ASSETS
LIABILITIES
(in USD)
CAPITAL AND RESERVES
Capital
Share premium account
Reserves
Profit carried forward
PROVISIONS FOR LIABILITIES AND CHARGES
Provisions and deferred taxes
CREDITORS
Amounts payable after one year
Amounts payable within one year
Accrued charges and deferred income
TOTAL LIABILITIES
148 Financial Report
STATUTORY FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 2015 (CONTINUED)
Income Statement of Euronav NV
for the period ended December 31, 2015
(in USD)
Operating income
Operating charges
OPERATING RESULT
Financial income
Financial charges
December 31, 2015
December 31, 2014
748,167,627
(499,556,612)
406,586,852
(407,099,986)
248,611,016
(513,134)
9,861,392
(47,968,251)
22,800,294
(90,117,020)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXES
210,504,157
(67,829,859)
Extraordinary income
Extraordinary charges
13,950,296
(8,000,000)
6,673,716
(4,198,720)
PROFIT FOR THE YEAR BEFORE TAXES
216,454,452
(65,354,864)
Income taxes
(3,032,281)
(2,033,927)
RESULT FOR THE YEAR
RESULT FOR THE YEAR AVAILABLE FOR APPROPRIATION
213,422,172
213,422,172
(67,388,791)
(67,388,791)
APPROPRIATION ACCOUNT
(in USD)
Result to be appropriated
Transfer to capital and reserves
Profit carried forward
Distribution of result
December 31, 2015
December 31, 2014
458,136,116
10,671,109
218,204,121
229,260,887
284,516,182
-
244,713,945
39,802,237
Financial Report 149
NOTES
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