Shareholder letter
Quick facts
Highlights 2017
Special report
The basics of the (cid:55)anker
(cid:54)hipping (cid:48)arket
Vision and Mission
Company profile
Directors’ report
Highlights 2017
Corporate Governance
Statement
The Euronav Group
Activity report
Products and services
Ship management
Fleet of the Euronav group
as per December 31, 2017
Corporate Social
Responsibility
Health, Safety, Quality,
Environment and Society
Human resources
Glossary
01
04
06
10
18
19
22
38
66
70
73
75
80
89
92
Financial report
100
Euronav’s shareholders’ structure
According to the information available to the Company at the
time of preparing this annual report on March 19, 2018 and
taking into account the latest transparency declarations or
other officially filed information with supervising authorities,
the shareholders’ structure is as shown in the table:
Shareholder
Number of shares Percentage
Saverco NV1
Châteauban SA
Victrix NV1
M&G Investment
Management Limited
16,130,028
15,921,400
9,245,393
10.13%
10.00%
5.81%
8,031,680
5.05%
Euronav (treasury shares)
1,042,415
0.65%
Other
Total
108,838,033
68.36%
159,208,949
100.00%
1 Including shares held directly or indirectly by or for the benefit of
the ultimate beneficial owner.
Shareholders’ diary 2018
WEDNESDAY 9 MAY 2018
Annual General Meeting of Shareholders 2018
THURSDAY 9 AUGUST 2018
Announcement of final half year results 2018
THURSDAY 16 AUGUST 2018
Half year report 2018 available on website
TUESDAY 30 OCTOBER 2018
Announcement of third quarter results 2018
THURSDAY 24 JANUARY 2019
Announcement of fourth quarter results 2018
Representation by the persons responsible
for the financial statements and for the
management report
Mr. Carl Steen, Chairman of the Board of Directors, Mr.
Patrick Rodgers, CEO and Mr. Hugo De Stoop, CFO, hereby
certify that, to the best of their knowledge,
(a) the consolidated financial statements as of and for the
year ended December 31, 2017, which have been prepared in
accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union, give a true and fair
view of the assets, liabilities, financial position and results of
Euronav NV and the entities included in the consolidation, and
(b) the annual report includes a true and fair view of the
evolution of the activities, results and situation of Euronav NV
and the entities included in the consolidation, and contains a
description of the main risks and uncertainties they may face.
(cid:702)(cid:728)(cid:748)(cid:3)(cid:1025)(cid:730)(cid:744)(cid:741)(cid:728)(cid:742)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 2010 - 2017
(In thousands of USD)
2017
2016
2015
2014
2013
Restated*
2012
2011
2010
Revenues
EBITDA**
EBIT
Net profit
513,368
684,265
846,507
473,985
304,622
410,701
394,457
525,075
273,360
43,488
1,383
476,478
248,715
204,049
613,770
403,564
202,767
100,096
120,719
128,368
260,298
41,814
(36,862)
(56,794)
(40,155)
88,152
19,680
350,301
(45,797)
(89,683)
(118,596)
(95,986)
TCE*** year average
2017
2016
2015
2014
2013
2012
2011
2010
VLCC
Suezmax
Spot Suezmax
27,773
22,131
18,002
41,863
26,269
27,498
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
In USD per share
2017
2016
2015
2014
2013
2012
2011
2010
Number of shares****
158,166,534 158,262,268
155,872,171 116,539,017
50,230,437
50,000,000
50,000,000
50,000,000
EBITDA
EBIT
Net profit
1.73
0.27
0.01
3.01
1.57
1.29
3.94
2.59
2.25
In EUR per share
2017
2016
2015
1.74
0.36
(0.39)
2014
1.99
(0.73)
(1.79)
2013
2.41
(1.14)
(2.37)
2012
2.57
(0.80)
(1.92)
5.21
1.76
0.39
2011
2010
Rate of exchange
1.1993
1.0541
1.0887
1.2141
1.3791
1.3194
1.2939
1.3362
EBITDA
EBIT
Net profit
History of dividend
per share
Dividend
Of which interim div. of
1.44
0.23
0.01
2.86
1.49
1.22
3.62
2.38
2.06
1.43
0.30
(0.32)
1.44
(0.53)
(1.29)
1.83
(0.86)
(1.80)
1.98
(0.62)
(1.48)
3.90
1.32
0.29
2017
2016
2015
2014
2013
2012
2011
2010
0.12
0.06
0.77*****
0.55
1.69
0.62
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.10
0.10
The comparative figures for 2013 have been restated following the application of IFRS 10 & IFRS 11 on Joint Arrangements.
*
** EBITDA (a non-IFRS measure) represents operating earnings before interest expense, income taxes and depreciation expense attributable to us. EBITDA is presented to provide investors
with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. We believe that EBITDA is useful to
investors as the shipping industry is capital intensive which often brings significant cost of financing. EBITDA should not be considered a substitute for profit/(loss) attributable to us or
cash flow from operating activities prepared in accordance with IFRS as adopted by the European Union or as a measure of profitability or liquidity. The definition of EBITDA used here may
not be comparable to that used by other companies.
*** Time Charter Equivalent
**** Excluding 1,042,415 shares held by the Company in 2017 (2016: 1,042,415 shares)
***** The total gross dividend paid in relation to 2017 of USD 0.12 per share is the sum of the interim dividend paid in October 2017 in addition to the proposed amount of USD 0.06 per share
proposed to the Annual Shareholder’s Meeting of 9 May 2018.
****** Ratio is based on the actual exchange rate EUR/USD on the day of the dividend announcement if any.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2010 - 2017
(In thousands of USD)
ASSETS
Non-current assets
Current assets
31.12.2017 31.12.2016 31.12.2015 31.12.2014 31.12.2013 31.12.2012 31.12.2011
31.12.2010
2,530,337
280,636
2,673,523
373,388
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
TOTAL ASSETS
2,810,973
3,046,911
3,040,746
3,096,360
1,920,761
2,362,879
2,451,316
2,644,214
LIABILITIES
Equity
Non-current liabilities
Current liabilities
1,846,361
805,872
158,740
1,887,956
969,860
189,095
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
TOTAL LIABILITIES
2,810,973
3,046,911
3,040,746
3,096,360
1,920,761
2,362,879
2,451,316
2,644,214
* The comparative figures for 2013 have been restated following the application of IFRS 10 & IFRS 11 on Joint Arrangements.
(cid:711)(cid:731)(cid:728)(cid:3)(cid:696)(cid:744)(cid:741)(cid:738)(cid:737)(cid:724)(cid:745)(cid:3)(cid:742)(cid:731)(cid:724)(cid:741)(cid:728)
Daily volume of traded shares 2017
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
jan
feb
mar
apr
may
jun
jul
aug
sep
oct
nov
dec
Senior Unsecured Bond
On October 23 2017, the Company announced that the 150 million USD senior unsecured
bonds issued by Euronav Luxembourg S.A. and guaranteed by Euronav NV are listed on
the Oslo Stock Exchange as of that day. The bonds have been allocated the following
ISIN code: NO 0010793888.
Share price evolution 2017 (in USD)
9.5
9
8.5
8
7.5
7
6.5
Shareprice NYSE in USD
Shareprice Euronext Brussels
in USD
jan
feb
mar
apr
may
jun
jul
aug
sep
oct
nov
dec
Dear Shareholder
Euronav had a very active but fulfilling year delivering a number of milestones and
accomplishments, to our stakeholders.
In May the Company signed five-year extensions for our FSO (floating storage) joint
venture. This provides the Company with a visible and long-duration fixed income.
In view of this and the Company’s strong balance sheet, the Board of Directors of
Euronav believed it appropriate to update our distribution policy to shareholders.
This initiative will see the Company paying a fixed minimum dividend (USD 0.12
per share) every year with additional income allocated to additional dividends, buy-
backs, debt repayment or accretive acquisitions.
The availability of traditional sources of capital, especially bank lending, to tanker
shipping continue to come under increasing regulatory and competitive pressure. In
order to continue diversification of our funding sources the Company successfully
launched a USD 150 million unsecured bond. This was Euronav’s first entry into
debt capital markets and represented a significant milestone for the Company in
diversifying its funding structure.
The Euronav team continued to be dynamic in managing the fleet and reducing the
average age of both our Suezmax and VLCC fleets via a series of vessel sales and four
new Ice Class Suezmax vessels which will join the Euronav fleet in the course of 2018.
These vessels are each backed by seven-year contracts with a blue chip partner.
The freight market however remained largely challenging. Apart from an
encouraging first quarter with demand for crude oil boosted by a short-term
increase in OPEC output ahead of agreed production cuts in late 2016, freight
rates provided a challenging background throughout the year. Whilst a number of
constituents were supportive – demand remains above trend growth with rising
ton miles – supply of both oil (reduced post OPEC cuts) and vessels (too many) are
combining to drive an oversupply of tonnage and therefore downward pressure on
freight rates.
Finally, just before the year end Euronav was pleased to announce agreement
on a stock-for-stock merger with Gener8 Maritime. Completion of the merger is
subject to regulatory and shareholder approval from Gener8. The merger will, upon
completion, create the leading independent large crude tanker operator with 75
crude tankers (including 44 VLCCs and 28 Suezmax) representing over 18 million
dwt and combined balance sheet assets of over USD 4 billion. In the view of the
Board of Directors the enlarged entity will offer a well-capitalised, highly liquid
company for investors to participate in the tanker market. The transaction terms
are accretive to shareholders of both companies and consistent with previously set
expansion criteria of Euronav which will retain over USD 700 million of available
liquidity upon completion.
Euronav has taken affirmative action in response to a weaker tanker background
in recent quarters via sale & leaseback, corporate bond and bank financing activity
to ensure it is well positioned to navigate the next stage of the tanker cycle – to be
strategically opportunistic whilst remaining exposed to any potential upside from
an improved freight rate environment. We constantly strive to deliver innovation,
stability and growth.
Yours sincerely,
Carl Steen
Chairman
"
Just before the
year end Euronav
was pleased
to announce
agreement on a
stock-for-stock
merger with Gener8
Maritime.
R
E
T
T
E
L
R
E
D
L
O
H
E
R
A
H
S
1
Quick Facts
2,950
people
Over 2,800 seafarers of many different
nationalities work aboard Euronav
vessels. Their nationalities are marked
by a dot on the map alongside.
In addition, Euronav has approximately
150 employees throughout 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.
* Proportionate EBITDA in thousands of USD
** Including hull S909, hull S910, hull S911 and
hull S912 which are under construction and
which are expected to be delivered between
March and August 2018.
2 FSO
2.8 million barrels
AVERAGE AGE: 15.8 YEARS
22** Suezmax
1 million barrels
AVERAGE AGE: 10 YEARS
28 VLCC
2 million barrels
AVERAGE AGE: 7.3 YEARS
1 V-Plus
3 million barrels
AVERAGE AGE: 15.8 YEARS
293,598*
Proportionate EBITDA
53**
VESSELS
the world’s largest,
independent, quoted crude
tanker platform
EURN
LISTED
EURONEXT
EURN
LISTED
NYSE
S
T
C
A
F
K
C
U
Q
I
5
Highlights 2017
JANUARY 12 and 20, 2017
Euronav takes delivery of two VLCCs (acquired as resales of contract), the Ardeche
(2017 – 298,642 dwt) and the Aquitaine (2017 – 298,767 dwt), from Hyundai Heavy
Industries - Samho yard, South Korea.
APRIL 20, 2017
Euronav signs an additional two long-term time charter contracts of seven years
each with Valero Energy, Inc. for Suezmax vessels with specialized Ice Class 1C
capability starting in late 2018. This brings to four the number of long-term (seven
years) Suezmax time charter contracts the Company has within its portfolio. In
order to fulfil these contracts, Euronav ordered an additional two high specification
Ice Class Suezmax vessels from Hyundai Heavy Industries shipyard in South Korea.
MAY 14, 2017
Euronav and its joint venture partner, International Seaways Inc., declare having
signed a contract for five years for the FSO Africa (2002 – 442,000 dwt) and FSO Asia
(2002 – 442,000 dwt) in direct continuation of the current contractual service. The
contract was signed with North Oil Company, the new operator of the Al Shaheen
oil field, whose shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P
Golfe Limited.
MAY 16, 2017
Euronav Luxembourg SA, a wholly owned subsidiary of the Euronav group, announces
the successful launch of a USD 150 million unsecured bond with a coupon of 7.50%
and maturity in May 2022. This is Euronav’s first entry into the debt capital markets.
JUNE 1, 2017
The Company announces the sale of the VLCC TI Topaz (2002 – 319,430 dwt) for
USD 21 million recording a capital loss of USD 21 million. The TI Topaz joined the
Euronav fleet in the first quarter of 2005 and contributed positively over the years to
the results of Euronav, especially during strong freight rate years such as 2005, 2006,
2008, 2010, 2015 and 2016.
SEPTEMBER 8, 2017
The Global Maritime Forum of which Euronav is a founding partner is launched. The
Global Maritime Forum is a global platform for high-level leaders from the entire
maritime spectrum and aims to effect positive long-term change for the industry and
for society.
OCTOBER 23, 2017
Euronav announces that the USD 150 million senior unsecured bonds issued by
Euronav Luxembourg SA and guaranteed by Euronav NV are listed on the Oslo Stock
Exchange.
NOVEMBER 10, 2017
Euronav sells the VLCC Flandre (2004 – 305,688 dwt) for USD 45 million to a global
supplier and operator of offshore floating platforms. A gain of USD 20 million on
the sale was recorded. The vessel was delivered in December for conversion into an
FPSO by her new owner and would therefore leave the worldwide VLCC trading fleet.
NOVEMBER 16, 2017
The Company sells the Suezmax Cap Georges (1998 – 146,652 dwt) for USD 9 million
and was delivered on November 29, 2017. The Company recorded a gain of USD 9
million. The sale of the Cap Georges came in anticipation of the delivery of the first of
four Suezmax vessels early in 2018 currently under construction at the Hyundai yard
in South Korea (HHI). Those vessels are part of a seven-year contract for four vessels
with a leading global refinery player.
NOVEMBER 17, 2017
Euronav sells the VLCC Artois (2001 – 298,330 dwt) for USD 22 million. The Artois was
the oldest vessel in the Company’s VLCC fleet. The Company records a gain of USD
8 million on the sale. The vessel was delivered to its new owners in early December.
DECEMBER 21, 2017
Euronav and Gener8 Maritime, Inc. (NYSE: GNRT) announce they reached an
agreement on a stock-for-stock merger for the entire issued and outstanding
share capital of Gener8 pursuant to which Gener8 would become a wholly-owned
subsidiary of Euronav.
7
1
0
2
S
T
H
G
L
H
G
H
I
I
7
T
R
O
P
E
R
L
A
C
E
P
S
I
The Basics of the
Tanker Shipping
Market
This year’s special report focuses on the key drivers and influences on the crude
tanker market. The aim is to provide some basic market background and explain key
market drivers to investors, commentators and observers alike.
Where do Crude tankers sit within the Value chain?
STORAGE
TANKS
OFFSHORE
PLATFORM
CRUDE TANKER
REFINERY
STORAGE
TANKS
EXPORTS
END USER
PRODUCT CARRIER
Crude oil tankers have a vital role to play within the energy value chain. Their main
role is to transport crude oil from production point to refinery, although they are
also sometimes used for storing crude oil post production. Crude tankers can also
be used for carrying oil products such as fuel oil. Any clean products that come out
of the refinery are carried on 'clean' or 'product' tankers, which are smaller in size
due to the smaller parcel sizes in which these products are traded. Euronav only
operates in the VLCC and Suezmax segment, this report will therefore focus on crude
oil tankers.
The Asset
Crude oil tankers come in various sizes, the biggest standard size being a Very Large
Crude Carrier – or 'VLCC'. These tankers take up to 2 million barrels of crude oil per
shipment, while the second largest size is the 'Suezmax' which takes around half of
that amount and is the largest size ship that can sail through the Suez Canal fully
laden. The smallest size of dedicated crude oil tankers is an 'Aframax' which can
carry around 600,000 barrels of oil. There are smaller tankers in the market, but
these tend to carry refined oil products and fuel oil, not crude oil.
DWT
Barrel
capacity
Length (m)
Breadth (m)
Draught (m)
Fleet size*
VLCC
300,000
2,000,000
Suezmax
160,000
1,000,000
Aframax
115,000
600,000
320
265
240
60
50
45
20
17
15
735
523
959
% owned
by top 10
43%
39%
36%
Construction of crude oil tankers takes 9 to 15 months from the time the keel is
first laid. This means that it will take at least two years from the time of newbuilding
contract signature (ordering) until the vessel is delivered because many critical parts
are long-lead items that needs to be ordered and produced before the construction
of the ship can commence. Their sheer size dictates that there is a limited number of
sites capable of building them and these are concentrated in Asia, more specifically
in South Korea, China, and Japan. The price for contracting a tanker newbuilding is
influenced by a number of factors such as the underlying price of energy, steel, labor
costs and available construction finance. The relative demand for contracting new
tonnage also plays a role and may lengthen or shorten waiting time to delivery and
affect price. Over the last ten years the cost of a new VLCC has ranged from around
USD 80 million to USD 160 million. The payment profile on the ships tends to be
very back loaded, typically with a 10% deposit on signing the contract, 20% to 40% in
milestone payments and finally 50% to 70% on delivery.
The economic lifespan of an oil tanker has historically been 25 years, although more
recently this has dropped closer to 20 years. Different tanker companies operate with
their own asset depreciation policies, ranging from 18 to 25 years. At Euronav, we
depreciate the original cost of a vessel to zero value over 20 years.
The Cost Structure
A ship owner chartering his vessel to a customer is paid 'freight'; this is the gross
revenue agreed with the charterer to cover the entire voyage from port of loading to
port of discharge. This revenue is used to cover the cost for the owner to undertake
the voyage, the cost of operating the vessel, any interest payments to loan providers
and other costs associated with owning a ship. Certain fixed costs vary between
shipping companies, most important the purchase price, and each will therefore
have their individual breakeven cost at which it becomes profitable to run the vessels.
However once these fixed costs are covered, all additional revenue results in profit.
Earnings are reported by companies and market watchers in terms of 'dollars per
day' also known as the Time Charter Equivalent (TCE). The cash breakeven TCE for a
VLCC is between USD 20,000 per day to USD 35,000 per day depending for example
* January 1, 2018
(Source: Clarksons SIN Excludes shuttle tankers)
"
At Euronav, we
depreciate the
original cost of a
vessel to zero value
over 20 years.
I
I
T
E
K
R
A
M
G
N
P
P
H
S
R
E
K
N
A
T
E
H
T
F
O
S
C
S
A
B
E
H
T
I
1
1
Gross Revenue: Money agreed with
charterer to cover entire voyage from
A to B
Voyage Expenses: Cost of fuel, port
stay, tolls, cargo handling, commission
Net Revenue: Gross revenue minus
voyage expenses
Vessel Expenses (OPEX): cost of crew,
vessel stores & supplies, lubrication,
oils, insurance
Interest: cost of debt servicing
Debt repayment: debt repayment will
depend on financing but depreciation is
a real cost
Maintenance Capex: Cost of special
surveys
(Source: Euronav)
on the level of loan interest, fixed operating costs depreciation (or amortization) and
G&A expenses.
35.000
30.000
25.000
20.000
15.000
10.000
5.000
0
E
C
G T
V
A
X
E
P
O
A
&
G
A
D
B I T
E
I n t e r e
s t
b t R
e
D
n t
e
m
a y
p
e
c e
n
a
n
a i n t e
M
w
o
h fl
s
a
C
For the purpose of this report, the tax issues will not be covered in-depth, but
for more details please refer to the annual report. As a consequence of this cost
structure, most tanker companies are highly operationally levered. Therefore, every
additional dollar earned in revenue over and above the “fixed” cost base will fall
through to profit. Euronav’s illustrative operational leverage for its cost structure is
depicted below.
$1.059
$267
$339
$627
$483
VLCC TCE rates
Suezmax TCE rates
$25,000
$20,000
+ $5,000
per day
$30,000
$25,000
+ $15,000
per day
$40,000
$35,000
+ $25,000
per day
$50,000
$45,000
+ $55,000
per day
$80,000
$75,000
T
R
O
P
E
R
L
A
C
E
P
S
I
Each $5,000 uplift in both VLCC and Suezmax rates
improves net revenue and EBIDTA by $72 mm
(Source: Investor Presentation High Yield
Conference 2017)
Tanker Customers
Tanker shipping is a business to business environment with a number of key
customers who regard the shipping element as an integral part of their logistical
chain. These key customers are the oil majors – both National Oil Companies (e.g.
Unipec, Saudi Aramco, Petrobras) and International Oil Companies (e.g. Total, Shell
and Chevron) – and there are trading houses such as Trafigura and Glencore, and
large refiners. The oil majors generally require ships to take oil or to deliver to or from
third party refineries oil to their customers. This type of business depends on physical
oil flows, which refineries require what type of crude oil at any given time. The trading
houses are often more opportunistic in their trading of oil and therefore also more
unpredictable in terms of when and where they may need a ship. Most counterparties
in the large crude tanker space are large multinational companies with strong credit
ratings. The customer is often referred to as the 'charterer' of the vessel.
When a charterer requires a tanker to move oil from A to B they will typically get in
touch with a ship broker, who will in turn contact a number of vessel owners and act
as a middle man in negotiating price, terms and conditions for carrying the cargo. The
charterer can go directly to the ship owner himself, although this happens less often.
How the price of freight is set
The following chart gives a broad worked example on how the price of freight is set.
A number of vessels will be eligible to take a cargo and the broker (who has been
mandated by the cargo owner to find a vessel to carry the cargo) will over the course
of several rounds bring down the number of potential ships. This process will also
be driven by the ship owners themselves as some will voluntarily drop out of any
potential bidding for a range of reasons (logistics, price, other cargo to bid on etc.).
Round 1 Potential Vessel
Round 2 Vessel evaluation
Round 3 Selection
Round 4 Vetting
10
7
4
1
Vessels that can make the lifting
window and are interested in this route
Brokers narrow down field basis e.g. logistics,
age of ship, embargo restriction, etc
Viable vessels go into auction process
with often lowest bid the winning ship
Only one vessel goes on 'subjects' for the
cargo, charterer vetting process begins
Quite simply the higher the number of potential ships, the lower the eventual freight
rate will likely be as more qualifying bidders logically should mean more pressure
on the price. However, it is important to understand only one ship will be selected
to go through a final vetting process whereby the cargo owner will assess the
vessel’s seaworthiness and suitability for the trade via previous survey results and
inspections. Ship owners competing with each other drive pricing down sometimes
below fixed costs.
(Source: Euronav)
I
I
T
E
K
R
A
M
G
N
P
P
H
S
R
E
K
N
A
T
E
H
T
F
O
S
C
S
A
B
E
H
T
I
3
1
Price of Oil – impact on tankers
Like any commodity, the greater the demand for it, the more demand for its
transportation. Crude is no different and the sharp reduction in the price of oil the
market experienced from the fourth quarter of 2014 prompted a boost in demand in
both the U.S. and Europe where oil demand is highly price sensitive. With improved
demand for oil products, more crude oil was needed by refineries worldwide. These
refineries are rarely located close to the sources of crude oil, so more oil tankers
were needed to transport the crude from oil field to refinery. Generally speaking the
lower the oil price the stronger demand for it. However the relationship is not linear.
In our view there is a band between USD 35 and USD 70 where the oil price will be
demand stimulating. Between around USD 70 and USD 80 this is neutral and above
this level the price is demand destructive. However, as the market saw in the first
quarter of 2016, a very low oil price can be demand disruptive – primarily for oil
producing and exporting nations; hence the relationship is not linear. Ships also burn
oil as fuel so high prices increase costs of transport.
Oil Price vs. Oil Demand Growth
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
)
d
p
b
m
(
h
t
w
o
r
G
d
n
a
m
e
D
l
i
O
Demand Disruptive
Oil Demand Growth
Oil Price
(Source: Euronav, Bloomberg, IEA)
Demand Destructive
Neutral
Demand Stimulating
140
120
100
80
60
40
20
0
-20
-40
l
b
b
/
$
e
c
i
r
P
l
i
O
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
T
R
O
P
E
R
L
A
C
E
P
S
I
Key Market Drivers – Demand for Oil
The demand for oil is an obvious driver of crude tanker demand; the more oil that is
needed around the world, the bigger the demand for moving this oil from production
to refinery. Global demand for oil has generally been rising year-on-year with the
average growth rate from 1990 being 1.1 million barrels per annum. Since 2015 this
growth rate has been above trend and is forecast to remain so until 2022.
Translating oil demand growth into actual vessel demand is an inexact science as
many factors impact how this oil is being traded and what means of transportation
is used to move it. A rough calculation looks something like this: demand growth
of say 1 million barrels per day equates to 365 million barrels per year. If all
this incremental demand was shipped and carried on VLCCs in 2 million barrel
parcels this would be an additional 182 cargoes per year. With a VLCC performing
on average six voyages a year we can conclude that these additional cargoes
would require around 30 extra ships provided all the additional demand is carried
by sea.
Key Market Drivers – Supply of Oil
Clearly for any oil transportation business the supply of oil is critical to the status
of its markets. Oil supply dynamics have undergone a transformation in the past
decade, away from being very Middle East focused to having a more diverse supply
base, in particular with the development of U.S. shale oil. This quick-to-production
process of shale oil (less than six months) has made global oil production far more
responsive to short-term changes in demand. The fact that the U.S. government
started to allow the export of crude oil in December 2015 has developed a new
trade flow currently exporting 1.4 mbpd compared to zero exports two years ago
(since end September 2017 average weekly export 1.424 mbpd (source: DOE)). Oil
supply is dynamic with for instance OPEC (the national oil producers cartel) and
Russia voluntarily cutting their crude production and removing cargoes from the
traditional trade routes emanating in the Middle East as from the first quarter of
2017.
Key Market Drivers – Vessel Supply
Perhaps the key driver of tanker markets is vessel supply. This is the ultimate
driver of market fluctuation; when the market is in short supply of ships, the cost
of chartering a ship – the freight – goes up but of course down if there are too many
ships available. This over- or undersupply of vessels can be viewed on a macro level
with the total global supply of ships, which will drive more long-term trends in freight
levels, but it can also be viewed on a more regional level where the number of ships
available in a specific load area can drive short-term freight fluctuations, which may
vary in different load areas.
On a global scale the supply of ships is a function of how many newbuild ships are
delivered versus how many ships are removed from the fleet. The vessel supply
picture can be compared to a bathtub – new vessel order flow reflect when the taps
are on filling up the fleet with more ships. Vessel scrapping is when the plug is out
and vessels are removed from the fleet rebalancing what is in the tub. The water
contained in the bathtub represents the size of the fleet – see in this respect also the
special report included in the 2016 annual report 'What is the effective size of the
operational tanker fleet'.
"
The demand for oil
is an obvious driver
of crude tanker
demand.
I
I
T
E
K
R
A
M
G
N
P
P
H
S
R
E
K
N
A
T
E
H
T
F
O
S
C
S
A
B
E
H
T
I
5
1
"
It is important
to keep in mind
that trade
routes are not
static.
T
R
O
P
E
R
L
A
C
E
P
S
I
Ballast Water treatment Sept-2019
Sulphur emission controls Jan-2020
Trade Routes & Dynamic Market
The different sizes of ships cater for different trade routes. We have already discussed
how smaller ships carry oil products, but within the crude tanker segment we also
see a divergence. Economies of scale dictate that. The size of a VLCC makes them
more cost efficient for longer international trade routes between large ports that
can physically accommodate their larger size. The smaller the vessel size, the more
regional the trade routes become. However, there is cross elasticity between vessel
sizes when the price of utilizing a VLCC becomes too expensive it may become more
price efficient for a customer to use two Suezmax vessels to transport the same
amount of oil instead. So we do sometimes see Suezmaxes compete for the long haul
international routes that are dominated by VLCCs and vice versa. The same applies
for smaller vessel segments.
It is important to keep in mind that trade routes are not static; these routes are
highly dependent on oil flows. For example when we began to see crude oil exports
from the U.S. destined for the Far East, the market developed a need for large
crude tankers to load in the U.S. Gulf, something not seen before. Please find more
details below.
Regulation of assets and operating businesses
The tanker industry is highly regulated, to ensure that all vessels are safe to use
for the crew, the cargo and the environment. Until the age of 15 years, the ship
must undergo a survey in dry dock only every five years. The vessels have to have
certification of classification society, which is an independent organization that
establishes and maintains technical standards for the operation of all ships. Vessels
have a five year survey cycle with an annual survey (12 months), intermediate survey
(30 months) and special survey (60 months). Performing this survey can take a couple
of weeks and will test for steel thickness and other indicators of seaworthiness. After
15 years, the intermediate survey cycle also needs to be done in dry dock every 30
months so at 17.5 years and 22.5 years. This is to account for the associated wear-
and-tear due to the vessel’s age. The cost of these surveys increase as the vessel
gets older - see diagram.
Some important charterers consider the overall risks associated with carrying oil
on an older ship as being too large when the vessel reaches 15 years of age, and
only charter ships until this age limit. However, most oil tankers find employment
up until around their 20th anniversary, which is currently the expected life of a
vessel, although some trade for longer. Looking at tankers that have been scrapped
since 2009, the average scrapping age for both VLCCs and Suezmaxes has been
around 20 years.
USD 4.0m
USD 3.0m
USD 2.0m
USD 1.0m
0
Cost of Survey increases during tanker life
100% Utilisation
1
#
y
e
v
r
u
S
l
a
i
c
e
p
S
5
2
#
y
e
v
r
u
S
l
a
i
c
e
p
S
3
#
y
e
v
r
u
S
l
a
i
c
e
p
S
y
e
v
r
u
S
e
t
a
d
e
m
r
e
t
n
I
i
4
#
y
e
v
r
u
S
l
a
i
c
e
p
S
7.5
10
12.5
15
17.5
20
22.5
> Constant vetting process throughout ship's life
Seasonality and Cyclicality
Historically, there has been a visible degree of seasonality in the tanker market as
freight rates have tended to perform better during the first quarter and the fourth
quarter of a calendar year. With 90% of the global population living in the northern
hemisphere, more oil is required during the northern hemisphere winter hence more
oil is consumed during these quarters. Below chart shows the seasonality differential
in average VLCC rates since 1990. However this marked contrast in seasonality has
been less evident in recent years. This can be explained by most demand growth now
originating from Asia, where oil demand is less affected by seasonal consumption
patterns.
Tanker shipping is a highly cyclical business with freight rates driven by numerous
factors, but in the medium to long-term vessel supply and demand are the main
drivers. Vessel supply is the one factor controlled by the shipping industry and the
supply of vessels is impacted largely by capital flows into and out of the sector, but
also availability of financing from banks and other investors. A tanker market cycle
generally begins with an oversupplied market where too many ships depress any
earnings and therefore the capital flows out of the sector. This will cause some
owners to get rid of their older ships as these become uneconomical to run. As
vessels are removed from the fleet, the market will become rebalanced, owners will
start earning more profits and more capital flows into the sector. This encourages
owners to start ordering new tonnage, although the lead time on delivery is at least
two years. Once these newly contracted vessels start delivering to the market it will
slowly, once again, become oversupplied and earnings will hit another trough – we
are back where the cycle started. These cycles are of varying duration but generally
take five to ten years to complete but like seasonality do appear to be more variable
in length.
Freight Market versus value of VLCC contracting ($/d)
18
16
14
12
10
8
6
4
2
0
D
S
U
n
o
i
l
l
i
b
1 Year time charter rate
VLCC Contracting Value
(Source: Clarksons SIN)
1996
2000
2004
2008
2012
2016
Average monthly VLCC Rate (since 1990) ($/d)
y
a
d
/
D
S
U
90.000
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
0
55.000
50.000
45.000
40.000
35.000
30.000
25.000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
I
I
T
E
K
R
A
M
G
N
P
P
H
S
R
E
K
N
A
T
E
H
T
F
O
S
C
S
A
B
E
H
T
I
(Source: Clarksons SIN)
7
1
T
R
O
P
E
R
L
A
C
E
P
S
I
Vision
and Mission
VISION
To lead responsibly the global crude oil tanker industry.
To seize every opportunity to reshape our industry in an era of unprecedented changes.
To promote and support sustainable programs to minimize the environmental impact
of our industry.
MISSION
For our society
To deliver an essential source of energy in ways that are economically, 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 objectives by
providing flexible, global high-quality and reliable services.
For our shareholders and capital providers
To create significant long-term value by strategically planning financial and
investment decisions while efficiently, consistently and transparently act as good
stewards of capital.
For our employees
To attract, inspire and enable talented, hard-working people to develop themselves
in order to contribute to our business and its vision in a challenging and rewarding
environment.
"
As the world’s
largest, independent
quoted crude tanker
platform, Euronav
owns and manages
(cid:724)(cid:3)(cid:1026)(cid:728)(cid:728)(cid:743)(cid:3)(cid:738)(cid:729)(cid:3)(cid:680)(cid:678)* vessels.
* Including hull S909, hull S910, hull S911 and
hull S912 which are under construction and
which are expected to be delivered between
March and August 2018.
Company (cid:739)(cid:741)(cid:738)(cid:1025)(cid:735)(cid:728)
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 March 19, 2018, Euronav owns and manages a fleet of 53* vessels. The
Company, incorporated in Belgium, is headquartered in Antwerp. Worldwide Euronav
employs 150 people on shore and has offices throughout Europe and Asia. Over 2,800
people work on the vessels. 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.
Euronav has a long-term strategy through cycle profitability by adapting its balance
sheet leverage and liquidity position in accordance with the sources of its revenues
which can be fixed (long term FSO Income and/or TC portfolio) or floating (pool and
spot revenues).
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.
By employing officers who graduated from the most reputable maritime academies
in the world, 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.
E
L
I
F
O
R
P
Y
N
A
P
M
O
C
9
1
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
DIRECTORS’ REPORT:
Highlights 2017
Overview of the Market
OIL DEMAND, PRODUCTION AND BUNKER COSTS
Global oil inventories have been dropping since the beginning of 2017 when OPEC
started to cut production in an attempt to balance oversupplied oil markets. The fall
in inventories has helped to support oil prices, however a continuous effort is needed
from OPEC to keep oil production at reduced levels for this trend to last. For the time
being the production cuts are in place until the end of the first half of 2018, although
OPEC and its production allies are set to review the effectiveness of the cuts at the
end of the first quarter.
The price of oil increased throughout 2017 and the cost per barrel for Brent surpassed
USD 65, a sharp rise from the low oil prices in early 2016 when Brent bottomed out at
USD 26 per barrel. Looking at full year average prices for 2017 Brent averaged USD
54.7 (up 25% from 2016), WTI averaged USD 50.9 (up 18% from 2016) and the OPEC
basket averaged USD 52.4 (up 29% from 2016).
World Oil Demand (in million bpd)
100
95
90
85
80
75
(Source: IEA)
2007
2008
2009
2010
2011
2012
2013
2014
2015 2016
2017
The market has seen the spread between Brent and WTI widen to more than USD
6 per barrel. Rising U.S. oil production in 2017 caused WTI to weaken versus other
Atlantic based crudes that are priced off Brent. Going into the third quarter when
global demand is historically higher, with restricted OPEC production and non-U.S.
non-OPEC production not growing at a pace to keep up with growing demand, the
relative availability of U.S. crudes added downward pressure to the WTI price. The
price spread saw an extra impact when the U.S. Gulf was hit by hurricane Harvey at
the end of August, restricting refinery utilization and crude exports, thereby adding
to inventories in the region.
Bunker prices generally follow the trend of the crude oil price and have seen similar
increases during the year. The price of bunkers in Fujairah averaged USD 324/MT,
in Rotterdam bunkers averaged USD 305/MT and in Singapore prices averaged USD
331/MT. Prices have increased around 40% from last year’s averages of USD 236/MT,
USD 214/MT and USD 233/MT respectively.
The story of oil supply was dominated by two players in 2017 – OPEC who cut
production and the U.S. where production has expanded. OPEC’s production cut was
always going to have a big impact with a target of removing 1.2 million barrels per
day from the oil markets, which they have been more or less successful in achieving.
While OPEC has been attempting to balance oil markets by cutting production, non-
OPEC production has been increasing. According to the IEA, non-OPEC production
averaged 58.02 mbpd in 2017, an increase of 0.63 from 2016, with a further 1.58
mbpd expected in 2018. The U.S. is by far the biggest contributor to these figures with
production growth of close to 0.54 mbpd this year alone. U.S. output is aided in large
part by growing shale production. Other contributors to non-OPEC growth are Brazil,
Canada, Kazakhstan, Ghana and Congo.
In terms of growth in oil demand the IEA reports global oil demand in 2017 of
97.85 mbpd, this represents a growth level of 1.53 mbpd or 1.6%. In 2018 demand
is projected to reach 99.14 mbpd. Demand for oil continues to be strong in the
Asia Pacific region which has seen growth of 1.0 mbpd this year compared to 2016.
Chinese demand growth is accounting for more than half of this at 0.59 mbpd. In
India oil demand growth is slowing down at just 2% this year, following 7% growth last
year as after effects of the country’s recent demonetization program has impacted
consumption. OECD oil demand is also growing and was 0.39 mbpd higher in 2017
than the previous year.
World Oil Production (in million bpd)
100
95
90
85
80
75
2007
2008
2009
2010
2011
2012
2013
2014
2015 2016
2017
7
1
0
2
S
T
H
G
L
H
G
H
I
I
(Source: IEA)
3
2
"
Going into 2017 the
(cid:713)(cid:703)(cid:694)(cid:694)(cid:3)(cid:1026)(cid:728)(cid:728)(cid:743)(cid:3)(cid:726)(cid:738)(cid:737)(cid:742)(cid:732)(cid:742)(cid:743)(cid:728)(cid:727)(cid:3)
of 690 vessels while
(cid:743)(cid:731)(cid:728)(cid:3)(cid:710)(cid:744)(cid:728)(cid:749)(cid:736)(cid:724)(cid:747)(cid:3)(cid:1026)(cid:728)(cid:728)(cid:743)(cid:3)
comprised 475
vessels.
2014
(Source - IEA)
2015
2016
2017
(Source - TI VLCC Database)
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
World VLCC Cargo Evolution (Cargoes per month)
280
260
240
220
200
180
160
140
Jan
Feb Mar Apr May
Jun
Jul
Aug
Sep
Oct Nov Dec
TANKER MARKETS
The average Time Charter Equivalent (TCE) obtained by the Company’s owned VLCC
fleet in the Tankers International (TI) Pool was about USD 28,119 per day for 2017
(2016: USD 41,863 per day).
The earnings of Euronav’s VLCC time charter fleet was approximately USD 39,629 per
day for 2017 (2016: USD 42,618 per day).
The average daily TCE obtained by the Suezmax spot fleet traded by Euronav directly,
was approximately USD 17,900 per day in 2017 (2016: USD 27,498 per day).
The earnings of Euronav’s Suezmax time charter fleet was approximately USD 22,131
per day for 2017 (2016: USD 26,269).
Baltic Exchange Dirty Tanker Index Rate Evolution (WS)
200
175
150
125
100
75
50
25
TD20 - West Africa / Cont
TD6 - Black Sea / Med
(Source: TI VLCC Database)
2010
2011
2012
2013
2014
2015
2016
2017
2018
World Fleet VLCC Earnings (TCE)
80,000
60,000
40,000
20,000
0
-20,000
2010
2011
2012
2013
2014
2015
2016
2017
2018
Baltic Exhange Dirty Tanker Index Rate Evolution (WS)
TI Actual in USD
BDTI (Baltic Exchange Dirty
Tanker Index Evolution) VLCC TCE
(avg of TD1 and TD3)
(Source: TI VLCC Database)
130
110
90
70
50
30
10
2010
2011
2012
2013
2014
2015
2016
2017
2018
TD1 - Arabian Gulf / US Gulf
TD3 - Arabian Gulf / Japan
TD15 - West Africa / China
7
1
0
2
S
T
H
G
L
H
G
H
I
I
(Source: TI VLCC Database)
5
2
Fleet Growth
Going into 2017 the VLCC fleet consisted of 690 vessels while the Suezmax fleet
comprised 475 vessels. The market was expecting a big influx of newbuildings to join
the fleet during the course of the year and we saw 50 new VLCCs enter the trading
fleet together with 57 Suezmaxes – the largest number of deliveries in one year since
2011. In terms of fleet exits, we have seen 15 VLCCs removed while 12 Suezmax
vessels left the fleet. This represents a fleet growth of 5.1% and 8.2% respectively,
and follows on from a similar high level of fleet growth in 2016.
The market has seen the pace of scrapping and conversion projects increase through
2017 and if this momentum continues we could see a scenario with more manageable
fleet growth in the next few years. While 10 removals for 2018 are already firm yet, we
estimate that 15-20 vessels from each segment could be scrapped or converted to
storage units during the year. This estimate is based on vessels that are currently in
the fleet reaching the age of 20 years. With the forthcoming regulatory requirements
for ballast water management in 2019 and sulfur emissions in 2020, there is added
incentive for owners to dispose of their older tonnage, in particular those vessels
that face special or intermediate surveys which often come at a high cost.
T
R
O
P
E
R
VLCC Fleet Development
'
S
R
O
T
C
E
R
D
I
60
40
20
0
-20
-40
-60
47
50
56
34
24
20
-14
-4
-4
-15
-15
9
2
0
-26
-25
-42
-34
2014
2015
2016
2017
2018
2019
2020
2021
2022
Additions
Forecast additions
Removals
Removals scenario
(Source: Clarksons)
Suezmax Fleet Development
51
57
26
-3
-12
-18
8
-7
9
-2
12
-15
2
-22
1
-14
0
-24
60
40
20
0
-20
-40
-60
Additions
Forecast additions
Removals
Removals scenario
2014
2015
2016
2017
2018
2019
2020
2021
2022
(Source: Clarksons)
1 Floating storage and offloading / floating
production storage and offloading market.
(Source: Energy Maritime Associates Pte Ltd)
FSO and FPSO market1
By the end of 2017 there were 393 floating production systems in service or available
worldwide of which 173 FPSOs and 104 FSOs. This does not include 21 FPSOs that are
available for reuse. In addition, there is one FPSO that is out of service for extended
repairs.
In total 49 production floaters, seven FSOs and four MOPUs are currently on order
which is down two from January, 2017. New orders are unlikely to keep up with the
20 deliveries scheduled in 2018, so the backlog is expected to decline into the low
40’s by year end.
Currently, there are 240 floater projects in the appraisal, planning or bidding or
final design stage that may require a floating production or storage system. Among
these projects, 62 are in the bidding or final design stage and another 127 floater
projects are in the planning phase. For these planned projects, the major hardware
contracts are planned between 2020 and 2022, but studies are still ongoing to
assess the economic viability of the projects, particularly those in deep water and
harsh environments. Finally, 51 projects are in the appraisal stage.
The most active region for future projects would be Africa with a total of 46 potential
floater projects planned. Next is Southeast Asia with 42 projects. Brazil remains in
third place with 34 projects. The remaining regions have fewer potential projects
including Northern Europe (23), Gulf of Mexico (21), Southwest Asia/Middle East
(18), Australia (15), the Mediterranean (12), Canada (10), South America and China
(9 each).
7
1
0
2
S
T
H
G
L
H
G
H
I
I
7
2
Bidding / Final design
Planning
Appraisal
(vv Energy Maritime Associates Pte Ltd)
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
Over 50% of the facilities responsible for production floater fabrication and conversion
are based in Asia. Keppel, Samsung and Hyundai continue to be the busiest yards
each with at least six projects underway.
Projects in planning, appraisal and final design phase by region
50
45
40
35
30
25
20
15
10
5
0
14
7
23
9
a
c
i
r
f
A
23
12
a
i
s
A
t
s
a
e
h
t
u
o
S
8
16
10
l
i
z
a
r
B
6
3
13
4
e
p
o
r
u
E
n
r
e
h
t
r
o
N
15
3
o
c
i
x
e
M
f
o
f
l
u
G
1
12
2
/
a
i
l
a
r
t
s
u
A
d
n
a
l
a
e
Z
w
e
N
11
7
0
t
s
a
E
e
l
d
d
M
i
/
a
i
s
A
t
s
e
w
h
t
u
o
S
6
3
3
n
a
e
n
a
r
r
e
t
i
d
e
M
0
5
5
a
d
a
n
a
C
4
4
1
/
a
i
s
A
t
s
a
E
h
t
u
o
S
i
a
n
h
C
2
5
2
h
t
u
o
S
r
e
h
t
O
s
e
i
r
t
n
u
o
c
n
a
c
i
r
e
m
A
1
0
n
a
e
c
O
c
fi
i
c
a
P
1
n
a
e
b
b
i
r
a
C
Euronav fleet
On March 19, 2018 Euronav’s owned and operated fleet consists of 49 double hulled
vessels being one V-Plus vessel, two FSO vessels (both owned in 50%-50% joint
venture), 28 VLCCs, of which four vessels under bareboat charter and 18 Suezmaxes.
At the time of preparing this report (March 19, 2018), Euronav’s tonnage profile is as
follows:
VLCC and V-Plus owned
VLCC chartered in
Suezmax owned
FSO owned (50%)
Total owned and controlled tonnage
7,838,077.00 dwt
1,229,136.00 dwt
2,813,947.00 dwt
442,000.00 dwt
12,323,160.00 dwt
Euronav’s vessels have an aggregate carrying capacity of approximately 12.32 million
dwt. On March 19, 2018 the weighted average age of the Company’s trading fleet was
approximately 8.1 years. After taking delivery of hull S909, hull S910, hull S911 and
hull S912, which are under construction and are expected to be delivered between
March and August 2018, Euronav will own and operate 53 double hull tankers
(including FSO vessels) with an aggregate carrying capacity of approximately 12.95
million dwt.
The majority of Euronav’s VLCC fleet is operated in the Tankers International Pool
(the 'TI Pool') in the voyage freight market. The TI Pool is one of the largest modern
exclusively double hulled fleets worldwide and comprises on March 19, 2018, 38
vessels of which 24 vessels operated by Euronav. The average age of Euronav’s
owned and operated VLCC fleet on March 19, 2018 is 7.3 years. In addition, the TI
Pool forms a commercial joint venture with Frontline Ltd. since October 6, 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
Euronav Suezmax fleet that is operated on the spot market is partially traded through
Suezmax Chartering, a commercial joint venture with Diamond S Management LLC
and Frontline Ltd. On March 19, 2018 the average age of the Suezmax fleet (owned
and operated) is approximately 10 years (including hull S909, hull S910, hull S911
and hull S912 which are under construction and are expected to be delivered
between March and August 2018).
The vast majority of Euronav’s vessels are managed in-house, 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.
Overview of the year 2017
THE FIRST QUARTER
For the first quarter of 2017, the Company had a net result of USD 34.3 million or
USD 0.22 per share (first quarter 2016: USD 113.5 million or USD 0.72 per share).
Proportionate EBITDA (a non IFRS-measure) would have been USD 106.1 million
(first quarter 2016: USD 185.0 million). The average daily TCE obtained by the
Company’s fleet in the TI Pool was approximately USD 40,528 per day (first quarter
2016: USD 60,638 per day). The TCE of the Euronav VLCC fleet fixed on long-term
charters, including profit shares when applicable, was USD 41,147 per day (first
quarter 2016: USD 40,847 per day). The average daily TCE obtained by the Suezmax
spot fleet was approximately USD 24,000 per day (first quarter 2016: USD 38,368
per day). The TCE of the Euronav Suezmax fleet fixed on long-term time charters,
including profit shares when applicable, was USD 23,880 per day (first quarter 2016:
USD 32,251 per day).
In general in 2017 time charter fixtures above 12 months were scarce in both the
VLCC and the Suezmax segment. Typically charterers and traders were interested
in Time Charter deals for a shorter term and often index related.
January
Euronav
On January 12 and 20, 2017 Euronav took delivery of two VLCCs (acquired as resales
of contract), the Ardeche (2017 – 298,642 dwt) and the Aquitaine (2017 – 298,767 dwt),
from Hyundai Heavy Industries - Samho yard, South Korea.
In the market
VLCC
Xin Lian Yang (2014) was reported chartered to Socar for 12 months at USD 30,300
per day.
Plata Glory (1999) and Plata Sunrise (1999) were both reported chartered to Socar at
an index related rate based on TD3 less 8% discount.
In total three confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
Montreal Spirit (2006) was reported chartered to Unipec for 12 months at
USD 22,000 per day.
RS Kaystros (newbuilding end 2017) was reported chartered to Repsol for five
years at USD 19,500 per day base rate, including profit share. This deal was
canceled later in the year as the vessel was not delivered on time due to lack of
financing.
In total one confirmed Suezmax fixture longer than six months was reported on
time charter.
7
1
0
2
S
T
H
G
L
H
G
H
I
I
9
2
February
In the market
VLCC
The highest1 rate reported for a fixture was recorded by DHT Europe (2007) chartered
to CSSA for 12 months at USD 31,250 per day.
The lowest rate reported for a fixture was recorded by Maran Regulus (2000)
chartered to Shell for 12 months at a floor rate of USD 19,000 per day with a ceiling
of USD 31,000 per day base on TD3.
In total four confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
Monte Stena (2012) was reported chartered to Cepsa for five years at an undisclosed
rate per day.
The highest1 rate reported for a fixture was recorded by La Mer (1998) chartered to
Prime International for six to twelve months at USD 18,000 per day.
In total three confirmed Suezmax fixtures longer than six months were reported on
time charter.
March
In the market
1 Anything above six months TC
VLCC
The highest1 rate reported for a fixture was recorded by Hudson (2017) chartered to
Reliance for 18 months at USD 30,750 per day.
The lowest rate reported for a fixture was recorded by Hercules I (2017) chartered to
Koch for 12 months at USD 19,000 per day with profit share.
In total four confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
The highest1 rate reported for a fixture was recorded by RS Tara (2016) chartered to
Mercuria for 12 months at USD 20,500 per day.
The lowest rate reported for a fixture was recorded by Suez George (2011) chartered
to Koch for 12 months at USD 18,000 per day.
In total eight confirmed Suezmax fixtures longer than six months were reported on
time charter.
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
The second quarter
The Company had a net half year result of USD 10.1 million or USD 0.06 per share
(first semester 2016: USD 153.7 million or USD 0.97 per share). Proportionate EBITDA
(a non-IFRS measure) for the same period would have been USD 151.8 million (first
semester 2016: USD 298.6 million). For the second quarter of 2017 the average daily
TCE obtained by the Company’s fleet in the TI Pool was approximately USD 28,351
per day (second quarter 2016: USD 47,864 per day). The TCE of the Euronav VLCC
fleet fixed on long-term charters, including profit shares when applicable, was USD
41,480 per day (second quarter 2016: USD 44,382 per day). The average daily TCE
obtained by the Suezmax spot fleet was approximately USD 17,341 per day (second
quarter 2016: USD 33,119 per day). The TCE of the Euronav Suezmax fleet fixed on
long-term time charters, including profit shares when applicable, was USD 21,651
per day (second quarter 2016: USD 26,363 per day).
April
Euronav
On April 20, 2017 Euronav signed an additional two long-term time charter contracts
of seven years each with Valero Energy, Inc. for Suezmax vessels with specialized Ice
Class 1C capability starting in late 2018. This brings to four the number of long-term
(seven years) Suezmax time charter contracts the Company has within its portfolio.
In order to fulfil these contracts, Euronav ordered an additional two high specification
Ice Class Suezmax vessels from Hyundai Heavy Industries shipyard in South Korea.
On April 25, 2017, Euronav signed a 12-year USD 110 million Export Credit Agency
(ECA) financing with commercial banks and Ksure for the financing of the two VLCC
newbuildings the Aquitaine (2017 – 298,767 dwt) and the Ardeche (2017 – 298,642
dwt) the Company took delivery of in January.
In the market
For contracts fixed for periods of longer than six months, many were done on an
index linked basis plus profit share.
7
1
0
2
S
T
H
G
L
H
G
H
I
I
1
3
VLCC
The highest1 rate reported for a fixture was recorded by TBN Maran newbuilding
chartered to Exxon for ten years at USD 31,000 per day.
Other reported time charters were fixed at index related rates, for example the
Pacific Glory (2001) chartered to Koch for nine months at a TD3 related rate.
In total six confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
The highest1 rate reported for a fixture was recorded by London Spirit (2011) chartered
to ST Shipping for 12 months at USD 20,500 per day.
The lowest rate reported for a fixture was recorded by Euronike (2005) chartered to
KOCH for three years at USD 13,000 per day with profit share.
In total seven confirmed Suezmax fixtures longer than six months were reported on
time charter.
May
Euronav
On May 11, 2017 the General Meeting of Shareholders approved the annual accounts
for the year ended December 31, 2016, as well as a gross dividend of USD 0.22 per
share.
On May 14, 2017 Euronav and its joint venture partner, International Seaways, signed
a contract for five years for the FSO Africa (2002 – 442,000 dwt) and FSO Asia (2002 –
442,000 dwt) in direct continuation of the current contractual service. The contract was
signed with North Oil Company, the new operator of the Al Shaheen oil field, whose
shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P Golfe Limited.
On May 16, 2017 Euronav Luxembourg SA, a wholly owned subsidiary of the Euronav
group, announced the successful launch of a USD 150 million unsecured bond with
a coupon of 7.50% and maturity in May 2022. This was Euronav’s first entry into the
debt capital markets.
In the market
VLCC
The highest1 rate reported for a fixture was recorded by Gloric (2006) chartered to
BP for 12 months at USD 27,000 per day. This was an extension of an existing deal.
The lowest rate reported for a fixture was recorded by Olympic Liberty (2003)
chartered to Shell for 12 months at USD 27,500 per day.
In total three confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
In total two confirmed Suezmax fixtures longer than six months were reported on
time charter.
June
Euronav
On June 1, 2017 Euronav announced the sale of the VLCC TI Topaz (2002 – 319,430
dwt) for USD 21 million recording a loss of USD 21 million. The TI Topaz joined the
Euronav fleet in the first quarter of 2005 and contributed positively over the years
to the results of Euronav, especially during strong freight rate years such as 2005,
2006, 2008, 2010, 2015 and 2016.
In June, 2017 the Company started a treasury note program (Commercial Paper)
and placed approximately EUR 50 million in the market for various short-term
1 Anything above six months TC
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
maturities at a pricing of 60 bps over Euribor. This was not additional debt but
rather an opportunity to decrease the cost of borrowing by systematically using the
proceeds to repay part of the Company's revolving loan facilities.
In the market
VLCC
The highest rate reported for a fixture was recorded by Bunga Kasturi Empat (2007)
chartered to Tesoro for 12 months at USD 28,250 per day.
The lowest rate reported for a fixture was recorded by Britanis (2002) chartered to
UML Switzerland for 12 months at a base rate of USD 19,500 per day plus profit share.
In total four confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
No fixture over six months was reported on the market in the month of June.
The third quarter
For the third quarter 2017, the Company had a net loss of USD (28.1) million or USD
(0.18) per share (third quarter 2016: net profit USD 0.1 million or USD 0.0 per share).
Proportionate EBITDA (a non-IFRS measure) for the same period would have been USD
46.2 million (third quarter 2016: USD 74.6 million). The TCE obtained by the Company’s
VLCC fleet in the TI Pool was approximately USD 18,875 per day (third quarter 2016:
USD 27,100 per day). The TCE of the Euronav VLCC fleet fixed on long-term charters,
including profit shares when applicable, was USD 39,875 per day (third quarter 2016:
USD 41,480 per day). The average daily TCE obtained by the Suezmax spot fleet was
approximately USD 15,670 per day (third quarter 2016: USD 19,045 per day). The TCE
of the Suezmax fleet fixed on long-term time charters, including profit shares when
applicable, was USD 21,210 per day (third quarter 2016: USD 21,575 per day).
July
In the market
New Comfort (2016) and New Caesar (2016) were the only two long fixtures reported.
Both vessels were chartered to Exxon for three years each at an undisclosed rate
per day.
August
Euronav
On August 23, 2017, Euronav received a transparency notification dated August
22, 2017, pursuant to which M&G Investment Management Limited, following the
acquisition of voting securities or voting rights on August 21, 2017 held 5.04% of the
voting rights in the Company and thus crossed the 5% threshold.
In the market
VLCC
The highest1 rate reported for a fixture was recorded by Gem No. 5 (2017) chartered to
Koch for two years at USD 29,000 per day.
The lowest rate reported for a fixture was recorded by Kalamos (2000) chartered to IOC
for two years at USD 23,350 per day.
In total eight confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
All reported Suezmax time charter fixtures were index linked. For example the
Nordic Space (2017) and Nordic Star (2016) chartered to Shell for 18 months at an
index related rate.
In total seven confirmed Suezmax fixtures longer than six months were reported on
time charter.
7
1
0
2
S
T
H
G
L
H
G
H
I
I
3
3
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
September
Euronav
On September 8, 2017 the Global Maritime Forum of which Euronav CEO Paddy
Rodgers is a founding partner was launched. The Global Maritime Forum is a global
platform for high-level leaders from the entire maritime spectrum and aims to effect
positive long-term change for the industry and for society.
In the market
VLCC
The highest1 rate reported for a fixture was recorded by Eagle Venice (2016) chartered
to Koch for two years at USD 30,000 per day.
The lowest rate reported for a fixture was recorded by Basra (2010) chartered to Al
Iraqya for five years at USD 22,500 per day.
In total two confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
All Suezmax time charters over six months were fixed on index related rates:
The DS Symphony (2001) chartered to LCMS for 12 months at an index related rate.
The Nordic Breeze (2011) chartered to BP for 12 months at an index related rate.
1 Anything above six months TC
In total three confirmed Suezmax fixtures longer than six months were reported on
time charter.
The fourth quarter
For the fourth quarter 2017, the Company had a net profit of USD 19.2 million or
USD 0.12 per share (fourth quarter 2016: USD 50.3 million or USD 0.32 per share).
Proportionate EBITDA (a non-IFRS measure) would have been USD 95.5 million
(fourth quarter 2016: USD 130.5 million). For the full year ending December 31,
2017 the net results are USD 1.4 million or USD 0.01 per share (2016: USD 204
million or USD 1.29 per share). The TCE obtained by the Company’s fleet in the
TI pool was for the fourth quarter approximately USD 25,889 per day (fourth
quarter 2016: USD 33,161 per day). The TCE of the Euronav VLCC fleet fixed on
long-term charters, including profit shares when applicable, was USD 35,399
per day (fourth quarter 2016: USD 43,833 per day). The TCE obtained by the
Suezmax spot fleet was approximately USD 15,891 per day for the fourth quarter
(fourth quarter 2016: USD 21,243 per day). The earnings of the Euronav Suezmax
fleet fixed on long-term time charters, including profit shares when applicable,
were USD 21,417 per day for the fourth quarter (fourth quarter 2016: USD 24,662
per day).
Time charter equivalent for the full year:
In USD
VLCC spot
2017
2016
28,119 per day
41,863 per day
VLCC time charter
39,629 per day
42,618 per day
Suezmax spot
18,085 per day
27,498 per day
Suezmax time charter
22,131 per day
26,269 per day
October
Euronav
On October 23, 2017 the USD 150 million senior unsecured bonds issued by Euronav
Luxembourg SA and guaranteed by Euronav NV were admitted to listing on the Oslo
Stock Exchange.
Euronav paid an interim dividend of USD 0.06 per share for the first half of 2017. This
was the first payment under the new dividend policy as announced on August 10,
2017. The dividend was payable as from October 5, 2017.
In the market
VLCC
The highest rate reported for a fixture was recorded by Fair Trader (2001) chartered
to Litasco for nine months at USD 30,000 per day.
The lowest rate reported for a fixture were recorded by Mercury Hope (2011) and
Mermaid Hope (2011) chartered to Koch for two years at a base rate of USD 14,500
per day and profit share.
In total five confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
The highest1 rate reported for a fixture was recorded by SKS Satilla (2006) chartered
to Shell for six months with an optional six months at USD 13,500 per day.
The lowest1 rate reported for a fixture was recorded by Decathlon (2012) chartered to
CSSA for 12 months at USD 13,000 per day.
In total eight confirmed Suezmax fixtures longer than six months were reported on
time charter.
November
Euronav
On November 8, 2017 the Company received a transparency notification from
Châteauban SA, a holding company part of the CLdN-Cobelfret group whose main
activities are in bulk shipments, ro-ro shipments and port companies. Following the
acquisition of voting securities or voting rights on November 7, 2017, Châteauban SA
held 5.15% of the voting rights in the Company and thus crossed the 5% threshold.
On November 10, 2017 Euronav sold the VLCC Flandre (2004 – 305,688 dwt) for USD
45 million to a global supplier and operator of offshore floating platforms. A gain
of USD 20 million on the sale was recorded. The vessel was delivered in December
2017 for conversion into an FPSO by her new owner and would therefore leave the
worldwide VLCC trading fleet.
On November 16, 2017 the Suezmax Cap Georges (1998 – 146,652 dwt) was sold
to its new owners. The vessel was sold for USD 9 million and was delivered on
7
1
0
2
S
T
H
G
L
H
G
H
I
I
5
3
November 29, 2017. The Company recorded a gain of USD 9 million. The sale of the
Cap Georges came in anticipation of the delivery of the first of four Suezmax vessels
early in 2018 currently under construction at the Hyundai yard in South Korea (HHI).
Those vessels are part of a seven-year contract for four vessels with a leading global
refinery player.
On November 17, 2017 Euronav sold the VLCC Artois (2001 – 298,330 dwt) for USD 22
million. The Artois was the oldest vessel in the Company’s VLCC fleet. The Company
recorded a capital gain of USD 8 million on the sale. The vessel was delivered to its
new owners in early December.
In the market
VLCC
The highest1 rate reported for a fixture was recorded by Trikwong Venture (2012)
chartered to Koch for 12 months at USD 27,500 per day.
In total five confirmed VLCC fixtures longer than six months were reported on time
charter.
Suezmax
No fixture over six months was reported on the market in the month of November.
December
Euronav
On December 21, 2017 Euronav and Gener8 Maritime, Inc. (NYSE: GNRT) announced
that they reached an agreement on a stock-for-stock merger for the entire issued
and outstanding share capital of Gener8 pursuant to which Gener8 would become a
wholly-owned subsidiary of Euronav.
In the market
VLCC
The highest1 rate reported for a fixture was recorded by four Kyklades Newbuildings
(2019) chartered to Koch for two years at USD 32,000 per day.
The lowest rate reported for a fixture was recorded by Chloe (2011) chartered to
Koch for six months with an optional six months at USD 15,500 per day plus profit
share.
In total five confirmed VLCC fixture longer than six months was reported on time
charter.
Suezmax
The only reported fixture was recorded by NS Bora (2010) chartered to CSSA for
12 months at USD 12,500-18,000, 100% for owners then profit share index related
(TD20).
In total one confirmed Suezmax fixture longer than six months was reported on
time charter.
Events occurred after the end of the financial year ending
31 December, 2017
On January 23, 2018 Euronav was included in the Bloomberg Gender-Equality Index
(”GEI”). The reference index measures gender equality across internal company
statistics, employee policies, external community support and engagement, and
gender-conscious product offerings. Euronav is the first Belgian HQ Company and
only transportation or shipping company in the index.
On February 1, 2018 the Company received a transparency notification from
Châteauban SA, a holding company part of the CLdN-Cobelfret group whose main
activities are in bulk shipments, ro-ro shipments and port companies. Following the
acquisition of voting securities or voting rights on January 31, 2018, Châteauban SA
held 10% of the voting rights in the Company.
1 Anything above six months TC
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
"
On January 23,
2018 Euronav
was included in
the Bloomberg
Gender-Equality
Index (”GEI”).
Prospects for 2018
2018 is expected to continue to present a challenging market for large tanker owners.
We will see another big influx of newbuildings hit the water both in the VLCC and in the
Suezmax segments. There is the prospect of a slight increase in scrapping activity, if
the imminent regulations begin to impact ship owners’ decisions on whether to put
their vessels through the next special survey or to scrap. The market projected fleet
growth is in 2018 for both segments in the region of 5%-8%, in line with 2017 growth
levels. Freight levels are therefore also projected to be similar to 2017 numbers,
although with a slight downside risk due to this being the second year of a large
newbuilding fleet needing to be absorbed into the market.
Global oil demand was strong and grew by 1.6% in 2017, compared to a ten year
average of 1.2%. 2018 demand is projected to expand by 1.3%, so still relatively
robust. Most of this growth is expected to come from non-OECD countries with Asia
set to lead the way with an additional 0.94 mbpd of demand. India is expected to
return to more normal growth levels of 6.9% to reach demand of 4.97 mbpd, while
Chinese demand is set to grow by 3.1% to reach 12.83 mbpd. Demand in Africa is also
on the rise and is projected to see demand grow by 2% in 2018.
Commercial crude stock levels have been falling throughout 2017 and are close
to reaching the five-year average, which is OPEC’s benchmark for a balanced oil
market. With this in view, we could see OPEC reverse their production cuts, when
their current deal ends at the end of the first half of the year. Rising oil prices
throughout 2017, on the back of the current cut, are also currently encouraging more
output from places like the U.S. as well as other price sensitive production areas.
U.S. production is set to increase by 1.32 mbpd in 2018. We could therefore see the
return to normalized levels of Middle Eastern cargo flows starting in the middle of
this year, which combined with continued increases in flows from the U.S., could form
the basis of growth in ton-miles going into the second half.
Whether any growth in ton-miles will be enough to absorb the many vessels expected
to hit the water in 2018 remains to be seen. The market is already well supplied
and at times the high ratio of ships to cargo leaves little bargaining power with ship
owners, so 2018 could prove to be another challenging year indeed.
7
1
0
2
S
T
H
G
L
H
G
H
I
I
7
3
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
Corporate
Governance
Statement
Introduction
REFERENCE CODE
Euronav has adopted the Belgian Code on Corporate Governance (dated March 12,
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 January 23, 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.
1. CAPITAL, SHARES AND SHAREHOLDERS
1.1 Capital and shares
On December 31, 2017 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 Senior Unsecured bonds
On October 23, 2017 the Company announced that the USD 150 million senior
unsecured bonds issued by Euronav Luxembourg S.A. and guaranteed by Euronav NV
are listed on the Oslo Stock Exchange as of that day. The bonds have been allocated
the following ISIN code NO 0010793888.
1.3 Treasury shares
On December 31, 2017 Euronav held 1,042,415 own 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.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
9
3
Shareholders’
structure
Euronav NV on
March 19, 2018
(cid:4823)(cid:593)(cid:593)(cid:593)(cid:593)(cid:593)(cid:593)(cid:593)(cid:4599)
(cid:593)(cid:3854)
10,13% Saverco NV
Châteauban SA
10%
5,81%
Victrix NV
5,05% M&G Investment
Management Limited
0,65% Euronav
(treasury shares)
68,36% Other
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
1 Including shares held directly or indirectly by or
for the benefit of the ultimate beneficial owner
2 Mrs. Alice Wingfield Digby resigned from the
Board of Directors with effect immediately after
the Annual General Meeting (AGM) of May 11,
2017.
1.4 Shareholders and shareholders’ structure
According to the information available to the Company at the time of preparing this
annual report on March 19, 2018 and taking into account the latest declarations, the
shareholders’ structure is as shown in the table:
Shareholder
Saverco NV1
Châteauban SA
Victrix NV1
M&G Investment Management Limited
Euronav (treasury shares)
Other
Total
Number of shares
Percentage
16,130,028
15,921,400
9,245,393
8,031,680
1,042,415
10.13%
10.00%
5.81%
5.05%
0.65%
108,838,033
68.36%
159,208,949
100.00%
2. BOARD OF DIRECTORS AND BOARD COMMITTEES
2.1 Board of Directors
During 2017 the composition of the Board of Directors was as follows:
Name
Carl Steen
Type of
mandate
First appointed
as director
End term
of office
Chairman –
Independent
Director
2015
AGM 2018
Paddy Rodgers
Director - CEO
2003
AGM 2020
Daniel R.
Bradshaw
William Thomson
Alice Wingfield
Digby 2
Anne-Hélène
Monsellato
Director
2004
AGM 2019
Independent
director
Independent
director
Independent
director
2011
AGM 2018
2012
AGM 2017
2015
AGM 2018
Ludovic Saverys
Director
2015
AGM 2018
Grace Reksten
Skaugen
Independent
Director
2016
AGM 2020
Carl Steen – Independent Director – Chairman
Carl Steen was co-opted Director and appointed Chairman of the Board of Directors
with effect immediately after the Board meeting of December 3, 2015. Mr. Steen is
also a member of the Audit and Risk Committee. He graduated from Eidgenössische
Technische Hochschule in Zurich, Switzerland in 1975 with a M.Sc. in Industrial and
Management Engineering. After working as 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
(cid:4823)
(cid:5355)
(cid:4295)
(cid:5355)
(cid:474)
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.
Paddy Rodgers – Director - CEO
Patrick Rodgers became Chief Executive Officer of Euronav in 2000 and has served
on Euronav’s Board of Directors since June 2003. He joined Euronav as a member of
the Executive Committee in 1995 and was appointed Chief Financial Officer in 1998.
Since 2011, he has served as Director and Chairman of the International Tanker
Owners Pollution Federation Fund (ITOPF). Mr. Rodgers was elected to the Executive
Committee of Intertanko in May 2017. From 1990 to 1995 he worked at CMB Group as
in-house Lawyer and subsequently as Shipping Executive moving to Euronav when
it became a subsidiary for tanker investments of the CMB Group. He graduated with
an LLB in Law from University College London in 1981 and qualified to practice in
1984 having passed law society entrance exams after studying at the College of Law,
Guildford in 1982. In 1984 he joined Bentley, Stokes & Lowless as a Solicitor and in
1986 he moved to Johnson, Stokes & Master in Hong Kong where he practiced until
1990.
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 Independent Director
of GasLog Partners LP (NYSE: GLOP), a Marshall Islands limited partnership. 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).
William Thomson – Independent Director
William Thomson has served on the Board of Directors since 2011 and is a member
of the Remuneration Committee and 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 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 – until May 11, 2017
Alice Wingfield Digby served on the Board of Directors from May 2012 until May 11,
2017. 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
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
1
4
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
Anne-Hélène Monsellato serves on the Board of Directors since her appointment
at the Annual General Meeting (AGM) of May 2015, and is the Chairman of the Audit
and Risk Committee and a member of the Corporate Governance and Nomination
Committee. She can be considered as the Audit and Risk Committee financial
expert for purposes applicable for corporate governance regulations and Article 96
paragraph 1, 9° of the Belgian Company Code. Since June 2017, Mrs. Monsellato
serves on the Board of Directors of Genfit, a biopharmaceutical company listed in
Euronext, and is the Chairman of the Audit Committee. Mrs. Monsellato is an active
member of the French National Association of Directors since 2013. In addition,
she is serving as the Vice President and Treasurer of the Mona Bismarck American
Center for Art and Culture, a U.S. public 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.
Ludovic Saverys - Director
Ludovic Saverys serves on the Board of Directors since 2015 and is a member of
the Remuneration Committee and the Corporate Governance and Nomination
Committee. Mr. Saverys currently serves as Chief Financial Officer of CMB NV and
as General Manager of Saverco NV. He also serves as CFO and Director of Hunter
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
Maritime Acquisition Corp., a blank check company listed on NASDAQ. 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.
Grace Reksten Skaugen – Independent Director
Grace Reksten Skaugen serves on the Board of Directors since the AGM of May 12,
2016 as an Independent Director and is Chairman of the Remuneration Committee
and a member of the Corporate Governance and Nomination Committee. Grace
Reksten Skaugen is a member of the HSBC European Senior Advisory Council
(ESAC). In 2009 she founded Infovidi Board Services Ltd, an independent consulting
company. From 2002 till 2015 she was a member of the Board of Directors of Statoil
ASA. She is presently Deputy Chairman of Orkla ASA, a Board member of Investor
AB and Lundin Petroleum AB and Chairman of NAXS Nordic Access Buyout A/S. In
2006 she was one of the founders of the Norwegian Institute of Directors, of which
she continues to be a member of the Board. From 1994 till 2002 she was a Director in
Corporate Finance in SEB Enskilda Securities in Oslo. She has previously worked in
the fields of venture capital and shipping in Oslo and London and carried out research
in microelectronics at Columbia University in New York. She has a doctorate in Laser
Physics from Imperial College of Science and Technology, University of London. In
1993 she obtained an MBA from the BI Norwegian School of Management.
Composition
The Board of Directors currently consists of seven members. One member has an
executive function; six are non-executive Directors of which four 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 10A-3 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 can be appointed for
a period not exceeding four years per mandate. 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.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
3
4
Functioning of the Board of Directors
In 2017 the Board of Directors formally met seven times for a Board meeting, two
times of which the Board of Directors deliberated via telephone conference. The
attendance rate of the members was the following:
Name
Carl Steen
Paddy Rodgers
Type of
mandate
Chairman -
Independent Director
Director -
CEO
Meetings
attended
7 out of 7
7 out of 7
Daniel R. Bradshaw
Director
6 out of 7
William Thomson
Alice Wingfield Digby1
Anne-Hélène Monsellato
Independent
Director
Independent
Director
Independent
Director
7 out of 7
1 out of 1
7 out of 7
1 Mrs. Alice Wingfield Digby resigned from the
Board of Directors with effect immediately after
the Annual General Meeting (AGM) of May 11,
2017.
Ludovic Saverys
Director
7 out of 7
Grace Reksten Skaugen
Independent
Director
7 out of 7
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 eleven
times in 2017.
Activity report 2017
In 2017 besides the above-mentioned customary agenda items, Euronav’s Board of
Directors deliberated on:
• the purchase of the Suezmax Maria from Larvotto Shipholding Ltd. in March
2017;
• the purchase of the Suezmax Captain Michael from Fiorano Shipholding Ltd. in
March 2017;
• the guarantee of Senior Unsecured Bond on May 15, 2017;
• the commercial paper on May 24, 2017
• the sale of VLCC TI Topaz to Dakota International Shipping Ltd. in May 2017;
• the sale-and-leaseback transaction of two VLCCs Nectar and Nautic;
• the potential merger with Gener8 Maritime during a special Board meeting;
• the sale of VLCC Flandre in November 2017;
• the sale of Cap Georges to Natalia Shipping Ltd. on November 21, 2017;
• the sale of VLCC Artois to Ridgebury Artois Holding LLC in November 2017;
• the approval of Project Seascape in December 2017;
• the reflagging of VLCC Sonia from Belgian to French flag in January 2018.
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
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 2017 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 December 31, 2017 the composition of the Audit and Risk Committee was as
follows:
Name
Anne-Hélène Monsellato1
(Chairman)
Carl Steen
Daniel R. Bradshaw
William Thomson
End term
of office
Independent
Director
2018
2018
2019
2018
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.
Powers
The Audit and Risk Committee handles a wide range of financial reporting,
controlling and risk management matters and is responsible for the appointment, the
compensation and the oversight of the independent auditor. 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 2017
In 2017 the Audit and Risk Committee convened eight times. The attendance rate of
the members was as listed below:
Name
Anne-Hélène Monsellato
(Chairman)
Carl Steen
Type of
mandate
Independent
Director
Independent
Director
Meetings
attended
8 out of 8
7 out of 8
Daniel R. Bradshaw
Director
8 out of 8
William Thomson
Independent
Director
8 out of 8
During these meetings, the key elements discussed within the Audit and
Risk Committee included financial statements, impairment assumptions and
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
5
4
depreciations, cash management, external and internal audit reports, the internal
audit function, old and new financing, accounting policies, matters related to the
Sarbanes-Oxley Act, the annual report on Form 20-F, certain company policies, the
impact of new IFRS rules, risk management/risk register 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 December 31, 2017, the Remuneration Committee was composed as follows:
Name
Grace Reksten Skaugen (Chairman)
William Thomson
Ludovic Saverys
End term
of office
Independent
Director
2020
2018
2018
X
X
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.
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. in line with suitable industry benchmarks.
The Remuneration Committee reviews its terms 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 2017
In 2017 the Remuneration Committee met five times. The attendance rate of the
members was as listed hereafter:
Name
Grace Reksten Skaugen (Chairman)
William Thomson
Ludovic Saverys
Type of
mandate
Independent
Director
Independent
Director
Attended
meetings
5 out of 5
5 out of 5
Director
5 out of 5
During these meetings the key elements discussed within the Remuneration
Committee included the remuneration report in the annual report, the organization of
the HR department in the group, the remuneration of Directors and members of the
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
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.
2.2.3 Corporate Governance and Nomination Committee
Composition
As at December 31, 2017, the Corporate Governance and Nomination Committee of
Euronav counted three members, two of which are Independent Directors. In this
respect, Euronav is 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. 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 December 31, 2017, the Corporate Governance and Nomination Committee was
composed as follows:
Name
Daniel R. Bradshaw (Chairman)
Anne-Hélène Monsellato
Grace Reksten Skaugen
End term
of office
Independent
Director
2019
2018
2020
X
X
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.
Activity report 2017
In 2017 the Corporate Governance and Nomination Committee met three times. The
attendance rate of the members was as follows:
Name
Type of
mandate
Attended
meetings
Daniel R. Bradshaw (Chairman)
Director
3 out of 3
Anne-Hélène Monsellato
Grace Reksten Skaugen
Independent
Director
Independent
Director
3 out of 3
3 out of 3
During these meetings the key elements discussed within the Corporate Governance
and Nomination Committee included the composition of the Board of Directors and
its Committees, including gender diversity considerations, U.S. law and Belgian
law and Corporate Governance requirements, the assessment of the Board and
its Committees, succession planning as well as Board education and leadership
development.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
7
4
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
Paddy Rodgers
Hugo De Stoop
Alex Staring
Egied Verbeeck
Title
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
General Counsel
Powers and activity report 2017
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 2017 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 2017 an in house self-assessment of the Board of Directors and its committees
was conducted by means of questionnaires. The members were asked to reflect
on the composition, the focus points and the operation of the Board of Directors as
well as the particular Committee(s) they are member of. This resulted in a consent
between the members of the Board of Directors that the composition of the Board
and its Committees is adequate and the focus should remain on the organization of
the Company, the strategy and the maintaining of a strong balance sheet.
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.
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.
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
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
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.
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 AGM.
As per decision of the AGM held on May 11, 2017, the gross fixed annual
remuneration remains at EUR 60,000 for the members of the Board of Directors
and at EUR 160,000 for the Chairman. The meeting further resolved that each
director, including the chairman, shall receive an attendance fee of EUR 10,000
for each board meeting attended. The aggregate annual amount of the attendance
fee shall however not exceed EUR 40,000. The gross fixed annual remuneration of
Mr. Daniel R. Bradshaw was set at EUR 20,000. It was also decided to grant him an
attendance fee of EUR 10,000 for each board meeting attended.
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 and the Corporate
Governance and Nomination Committee, the 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.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
9
4
The remuneration in 2017 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
Carl Steen
160,000.00
40,000.00
20,000.00
Paddy Rodgers
0.00
0.00
0.00
Daniel R. Bradshaw
30,000.00
40,000.00
20,000.00
William Thomson
60,000.00
40,000.00
20,000.00
Alice Wingfield Digby1
15,000.00
10,000.00
0.00
Anne-Hélène
Monsellato
60,000.00
40,000.00
40,000.00
Ludovic Saverys
60,000.00
40,000.00
Grace Reksten
Skaugen
60,000.00
40,000.00
0.00
0.00
TOTAL
445,000.00
250,000.00
100,000.00
4.3 Remuneration policy for the Executive 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 2018 long term incentive plan
(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.
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 Remuneration Committee did not increase the ABS since 2015.
3
1
4
Remuneration
(fixed and variable)
(cid:597)(cid:461)
Fix
2
Variable
1
2
3
4
Annual Base Salary
Success Participation Bonus
Individual & Company KPI's
Long Term Incentive Plan
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
(cid:4146)
(cid:461)
(cid:2988)
(cid:461)
(cid:839)
(cid:461)
(cid:474)
Attendance fee
Audit and Risk
Committee
Remuneration
Committee
Attendance fee
Remuneration
Committee
Corporate Governance
and Nomination
Committee
Attendance fee
Corporate Governance
and Nomination
Committee
TOTAL
20,000.00
0.00
20,000.00
0.00
0.00
0.00
0.00
0.00
0.00
20,000.00
6,250.00
20,000.00
0.00
20,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
240,000.00
0.00
0.00
7,500.00
15,000.00
132,500.00
0.00
0.00
0.00
166,250.00
0.00
25,000.00
5,000.00
15,000.00
180,000.00
0.00
5,000.00
20,000.00
0.00
0.00
125,000.00
0.00
6,250.00
20,000.00
5,000.00
15,000.00
146,250.00
80,000.00
17,500.00
60,000.00
17,500.00
45,000.00
1,015,000.00
2. Success Participation Bonus (variable)
The remuneration structure includes a Success Participation Bonus which varies
with the size of the distributable result during that year. A target distributable result
of USD 280 million was set for 2017. This will be subject to an annual 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 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%
1 Mrs. Alice Wingfield Digby resigned from the
Board of Directors with effect immediately after
the Annual General Meeting (AGM) of May 11,
2017.
"
Variable
remuneration is
determined on
the basis of
each individual’s
performance
throughout the year.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
1
5
The Remuneration Committee and the Board of Directors will always review the
Success Participation Bonus against the background of individual performance. The
Success Participation Bonus was not paid in 2017. An individual KPI score below 2/5
excludes eligibility for participation in the Success Participation Bonus.
3. Individual and Company KPIs (Management Performance Bonus)
The Management Performance Bonus is based on pre-determined individual
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 needn’t necessarily be revisited each year as they are not
linked to specific projects. Examples of standard KPIs are retention of key
talent, management of leverage (so critical in a cyclical business), effective risk
management or 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 businesses and fleets, successful public
capital raising, public listings and successful implementation of regulations such
as Sarbanes-Oxley, development or improvement of department procedures to
meet demands of continuous efficiency gains.
Performance under the individual KPIs can result in a bonus amount between 0%
and 75% 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 are intended to guarantee the integrity of the collegial
responsibility of the Executive Committee. The Remuneration Committee chose to
award 75% of ABS as a result of the review of Company and Individual KPIs in a very
challenging market where the overall distributable result was less than the gateway
for Success Participation.
4. Long Term Incentive Plan (LTIP) (variable)
The members of the Executive Committee are also entitled to a LTIP in 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 Board of Directors 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 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 are set annually by the Board of Directors upon
recommendation of the Remuneration Committee.
At year-end all members of the Executive Committee are required to perform a self-
assessment of their performance. This self-assessment is reviewed by and discussed
with the other Executive Committee members. The results of this self-assessment
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
are submitted to the Remuneration Committee who then gives advice to the Board
of Directors on the performance rating.
4.4 Remuneration of the Executive Committee
Remuneration of the Chief Executive Officer
The remuneration in 2017 of the CEO is reflected in the table below:
In GBP:
Fixed remuneration
Variable remuneration
Pension and benefits
Other components
Paddy Rodgers
393,728
Cash: 295,296
LTIP: 295,296
0
12,658
In the event of termination of the CEO's employement 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 2017 of the members of the Executive Committee (excluding the
CEO) is reflected in the table below:
In EUR:
Fixed remuneration
Variable remuneration
Pension and benefits
Other components
three members 1,083,097
Cash: 734,250
LTIP: 734,250
35,252
58,102
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 and for 2017 it can be stated that the variable remuneration
represents 57.5% 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
December 16, 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
Granted
Vested
Exercised
CEO
CFO
COO
General Counsel
525,000
525,000
350,000
350,000
525,000
525,000
350,000
350,000
350,000
350,000
350,000
350,000
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
3
5
LTIP 2015
On February 12, 2015, within the framework of a management incentive plan, the
Board of Directors granted 65,433 Restricted Stock Units (RSUs) and 236,590 stock
options. On March 19, 2018 the situation is as follows:
LTIP 2015
Stock Options
Granted
Vested
Exercised
CEO
CFO
COO
General Counsel
80,518
58,716
54,614
42,742
80,518
58,716
54,614
42,742
-
-
-
-
The exercise price of the options is EUR 10.0475.
RSU
CEO
CFO
COO
General Counsel
Number of units granted
22,268
16,239
15,105
11,821
The RSU’s all vested automatically on the third anniversary of the grant which was
February 18, 2018.
LTIP 2016
On February 2, 2016, within the framework of a Phantom Stock Plan, the Board of
Directors granted 54,616 phantom stock units. On March 19, 2018 the situation is as
follows:
LTIP 2016
Granted
Vested
Exercised
CEO
CFO
COO
General Counsel
17,116
20,728
8,009
8,762
5,705
6,909
2,669
2,920
-
-
-
-
The phantom stock units will mature one-third each year on the second, third and
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
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
on the basis of a share price of EUR 10.6134 which equals the weighted average of
the share price of the three days following the announcement of the preliminary full
year results of 2015.
LTIP 2017
Within the framework of a Phantom Stock Plan, 66,448 phantom stock units were
granted to the Executive Committee and the Investor Relations Manager on February
9, 2017, as follows:
LTIP 2017
Granted
Vested
CEO
CFO
COO
General Counsel
17,819
20,229
12,557
9,808
Investor Relations Manager
6,036
-
-
-
-
-
The phantom stock units will mature one-third each year on the second, third and
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 EUR 7.2677 which equals the weighted average of the
share price of the three days following the announcement of the preliminary full year
results of 2016.
LTIP 2018
Within the framework of a Phantom Stock Plan 148,113 phantom stock units were
granted to the Executive Committee and the Investor Relations Manager on February
16, 2018, as follows:
LTIP 2018
Granted
Vested
CEO
CFO
COO
General Counsel
46,652
37,620
36,480
27,360
Investor Relations Manager
6,319
-
-
-
-
-
The phantom stock units will mature one-third each year on the second, third and
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 EUR 7.2368 which equals the weighted average of the
share price of the three days following the announcement of the preliminary full year
results of 2017.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
5
5
4.6 Remuneration of the Auditor KPMG Bedrijfsrevisoren-Réviseurs d'Entreprises
Permanent representative: Götwin Jackers
For 2017, the worldwide audit and other fees in respect of services provided by the
statutory auditor KPMG can be summarized as follows:
In USD
2017
2016
Audit services for the annual financial
statements
Audit related services
Tax services
TOTAL
870,324
966,732
7,987
22,104
28,559
17,642
900,415
1,012,934
The limits prescribed by Article 133 of the Belgian Company Code were observed.
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:
• strategic: capital allocation, strategic partnerships, risks relating to the TI
Pool and VLCC Chartering, the joint ventures and associates, risks related to
communication to stakeholders;
• economic (including slowing economic growth, freight rate volatility, oil supply
and demand, 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, including
bunker supply and management of crew, the conversion of vessels, the operation
of its FSO activities, the integration of acquired activities, the adequate protection
of critical data and infrastructure from unauthorized use or theft, including
cyber-criminality and the effective management of its international operations;
• regulations: if the Company fails to comply with health, safety and environmental
laws, regulations (including regulations about emissions) or requirements or is
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;
• geopolitical: terrorist attacks, piracy, civil disturbances and regional conflicts in
any particular country.
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;
job
• clearly documented
its corporate structure, organization chart and
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,…;
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
• 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 and infrastructure,
human resources and payroll, treasury, tax, insurances, Know Your Customers
procedures, …
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 performed by the internal audit function 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 established an internal audit function for the purpose of reviewing
and analysing strategic, operational, financial and IT risks, to conduct specific
assignment in accordance with the annual internal audit plan and to report and
discuss the findings with the Audit and Risk Committee. The scope of internal audit is
both on operations and on internal control over financial reporting. The Internal Audit
Department is staffed with designated resources, resources from other departments
and external service providers for competencies that are not available as a part of the
Company. Part of the internal audit work on internal control over financial reporting
is outsourced to a qualified service provider (EY). The Internal Audit Manager reports
both to the CFO and to 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 AGM to present their report.
5.1 Hedging policy
Euronav may hedge 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.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
7
5
5.2 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 October, 23 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 have been in principle determined nominally on the basis of the tonnage of
the vessels it operated. 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 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.
In 2017 and early 2018 the Company took note of the correspondence between the
Belgian authorities and the European Commission within the framework of request
for extension of the state aid to the maritime industry by Belgium. The draft law
including the by the Commission requested legislative changes has been reviewed
by the Company. We do not expect any adverse effect of these changes to our existing
tonnage tax regime.
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 and consumption 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.
Declines in charter rates, vessel values and other market deterioration could cause us to
incur impairment charges
We evaluate the carrying amounts of our vessels to determine if events have occurred
that would require an impairment of their carrying amounts. The recoverable amount
of vessels is reviewed based on events and changes in circumstances that would
indicate that the carrying amount of the assets might not be recovered. The review
for potential impairment indicators and projection of future cash flows related to the
vessels is complex and requires us to make various estimates relating to, among other
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
things, vessel values, future freight rates, earnings from the vessels, discount rates and
economic life of vessels. Many of these items have historically experienced volatility. We
evaluate the recoverable amount as the higher of fair value less costs to sell and value in
use. If the recoverable amount is less than the carrying amount of the vessel, the vessel is
deemed impaired. The carrying values of our vessels may not represent their fair market
value at any point in time because the new market prices of secondhand vessels tend
to fluctuate with changes in charter rates and the cost of newbuildings. For the years
ended December 31, 2017 and 2016, we evaluated the recoverable amount of our vessels
and we did not recognize an impairment loss. Factors that we considered in our estimate
are described in the Critical Accounting policies. In particular, our estimate for future
TCE rates is based on the trailing 10-year historical average spot rates for both VLCC and
Suezmax tankers, which we believe is a reasonable basis for this determination. As 2008
was an exceptionally high year in terms of TCE achieved by both the VLCC and Suezmax
fleets, the use of a 10-year range that excludes year 2008 may result in a reduction of
the value in use used in the determination of the recoverable amount, compared to the
10-year range from 2008 to 2017 which we retained as of December 31, 2017. Excluding
year 2008 from our determination of value in use could result in an impairment loss
for the year ending December 31, 2018. Any impairment charge incurred as a result of
further declines in charter rates could negatively affect our business, financial condition,
operating results or the trading price of our ordinary shares.
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 in its vessels, collisions, severe
damage to vessels, damage to or the loss of cargo and the interruption of commercial
activities due to (geo-)political circumstances and events, 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.
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.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
9
5
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
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 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.
Euronav is subject to risks related to the adequate protection of critical data and
infrastructure from unauthorized use or any other form of cyber-criminality
Euronav’s activities are subject to risk of discontinuity due to unauthorized use, theft,
sabotage, viruses or any other disruptive activity on the Company’s IT infrastructure,
which could impact the confidentiality, integrity and availability of data and/or IT
systems. Euronav has implemented, amongst other things, business continuity plans, a
regularly tested IT controls framework, continuous access monitoring and independent
penetration testing in our offices and on board of our vessels. The Company’s controls
also include compliance to existing related rules & legislation and implement full
adherence to the EU General Data Protection Regulation, as approved on 14 April 2016.
6. INFORMATION TO BE INCLUDED IN THE ANNUAL REPORT AS PER ARTICLE 34
OF THE ROYAL DECREE OF NOVEMBER 14, 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
1,042,415 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
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
1
6
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, the bareboat charter parties in the framework of sale-and-lease-back
transactions 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.
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 the (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 speci fic rules concerning the
authorization to increase the share capital of the Company. By decision of the
Shareholders’ Meeting held on May 13, 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
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
authorization to acquire or sell the Company’s own shares. Pursuant to a decision
of the Extraordinary Shareholders’ Meeting of February 24, 2014 which has been
adopted in accordance with the relevant legal provisions, the Company has been
authorized to acquire and 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 February 24, 2014 (Article
16 of the articles of association).
7. APPROPRIATION OF PROFITS
The Board of Directors may from time to time, declare and pay cash dividends
in accordance with the Articles of Association and applicable Belgian law. The
declaration and payment of dividends, if any, will always be subject to the approval of
either the Board of Directors (in the case of ‘interim dividends’) or of the shareholders
(in the case of ‘regular dividends’ or ‘intermediary dividends’).
The current dividend payment policy as adopted by the Board is the following: the
company intends to pay a minimum fixed dividend of at least USD 0.12 in total per
share per year provided (a) the company has in the view of the board, sufficient
balance sheet strength and liquidity combined (b) with sufficient earnings visibility
from fixed income contracts. In addition, if the results per share are positive and
exceed the amount of the fixed dividend, that additional income* will be allocated to
either: additional cash dividends, share buy-back, accelerated amortization of debt
or the acquisition of vessels which the board considers at that time to be accretive to
shareholders’ value.
* Treatment of capital losses and capital gains
As part of its distribution policy Euronav will
continue to include exceptional capital losses
when assessing additional dividends but also
continue to exclude exceptional capital gains
when assessing additional dividend payments.
* Treatment of Deferred Tax Assets (DTA) and
Deferred Tax Liabilities (DTL)
As part of its distribution policy Euronav will not
include non-cash items affecting the results
such as DTA or DTL.
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
3
6
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
In general, under the terms of the debt agreements, Euronav is not permitted to pay
dividends if there is or will be as a result of the dividend a default or a breach of a loan
covenant. Belgian law generally prohibits the payment of dividends unless net assets
on the closing date of the last financial year do not fall beneath the amount of the
registered capital and, before the dividend is paid out, 5% of the net profit is allocated
to the legal reserve until this legal reserve amounts to 10% of the share capital. No
distributions may occur if, as a result of such distribution, the net assets would fall
below the sum of (i) the amount of the registered capital, (ii) the amount of such
aforementioned legal reserves, and (iii) other reserves which may be required by the
Articles of Association or by law, such as the reserves not available for distribution
in the event Euronav holds treasury shares. Euronav may not have sufficient surplus
in the future to pay dividends and the subsidiaries may not have sufficient funds or
surplus to make distributions to the Company. Euronav can give no assurance that
dividends will be paid at all. In addition, the corporate law of jurisdictions in which
the subsidiaries are organized may impose restrictions on the payment or source of
dividends under certain circumstances.
8. CODE OF CONDUCT
The Board of Directors reconfirmed the Euronav Code of Business Conduct and
Ethics at its meeting of 7 December 2017. 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 view of Regulation (EU) No 596/2014 of the European Parliament and of the Council
of April 16, 2014 on market abuse (market abuse regulation) and repealing Directive
2003/6/EC of the European Parliament and of the Council and Commission Directives
2003/124/EC, 2003/125/EC and 2004/72/EC (the ‘Market Abuse Regulation' or ‘MAR’),
at its meeting of December 7, 2017, the Board of Directors reconfirmed 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, as well as other procedures and safeguards the Company has
implemented in compliance with the Market Abuse Regulation.
The Officers, Directors, Managers and employees of the Euronav Group 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 Market Abuse Regulation
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 center promoting corporate governance in all its forms and offers a
platform for the exchange of experiences, knowledge and best practices.
"
The Board of Directors
of Euronav currently
(cid:726)(cid:738)(cid:737)(cid:742)(cid:732)(cid:742)(cid:743)(cid:742)(cid:3)(cid:738)(cid:729)(cid:3)(cid:1025)(cid:745)(cid:728)(cid:3)(cid:736)(cid:728)(cid:737)(cid:3)
and two women
with varying yet
complementary
knowledge bases and
(cid:1025)(cid:728)(cid:735)(cid:727)(cid:742)(cid:3)(cid:738)(cid:729)(cid:3)(cid:728)(cid:747)(cid:739)(cid:728)(cid:741)(cid:732)(cid:728)(cid:737)(cid:726)(cid:728)(cid:673)(cid:3)
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 five 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
July 28, 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.
In January 2018 Euronav was selected as one of over 100 companies from ten
sectors to join the inaugural 2018 Bloomberg Gender-Equality Index (GEI). This
comprehensive index measures gender equality across internal company statistics,
employee policies, external community support and engagement, and gender-
conscious product offerings. Inclusion in this index recognises efforts made by
Euronav to create a work environment that supports gender equality and the growing
demand for diverse and inclusive workplaces.
In order to become a participant in this Index, Euronav submitted a survey created by
Bloomberg in partnership with third-party experts Catalyst, Women's World Banking,
Working Mother Media, National Women's Law Center and National Partnership for
Women & Families. Those included on this year’s index scored at or above a global
threshold established by Bloomberg to reflect disclosure and the achievement or
adoption of best-in-class statistics and policies.
The Executive Committee consists of four men, three of whom are based in Belgium and
one in the U.K. They all hold academic degrees in various disciplines such as Law, Finance,
Shipping, and Science. Before they started working with Euronav, they were employed in
the financial, legal and shipping sector. Their ages vary between 44 and 59 years old and
include their average experience of 12 years in their current executive position.
The Senior Management (Head of Investor Relations, Secretary General, General
Manager Nantes office, General Manager Greek office, HSQE Manager) consists of
four men and one woman (one is based in the UK, one in Belgium, one in France and
two in Greece). They all have an academic degree in various disciplines (Economics,
Law, History, and Shipping). They started their careers in the financial, legal and
shipping sector and have been working in their current Euronav role for an average
of five years. Their ages vary between 41 and 61 years old.
12. APPROPRIATION ACCOUNTS
The result to be allocated for the financial year amounts to USD -25,023,826.30.
Together with the transfer of USD 199,652,152.68 from the previous financial year,
this gives a profit balance to be appropriated of: USD 174,628,326.38.
The Board of Directors will propose to the Annual Shareholders’ Meeting of May 9,
2018 to distribute a full year gross dividend in the amount of USD 0.12 per share to
all shareholders. Taking into account the interim dividend of USD 0.06 per share paid
as of October 5, 2017, and subject to shareholders’ approval, a final dividend of USD
0.06 per share will be paid after the Annual General Meeting of Shareholders. The
dividend will be payable as from May 23, 2018. The share will trade ex-dividend as
from May 14, 2018 (record date May 15, 2018). The dividend to holders of Euronav
shares listed and tradable on Euronext Brussels will be paid in EUR at the USD/EUR
exchange rate of the record date.
If this proposal is agreed upon, the allocation of profits will be as follows:
• capital and reserves
• dividends
• carried forward
USD 0.00
USD 19,105,073.88
USD 155,523,252.50
March 20, 2018
Board of Directors
T
N
E
M
E
T
A
T
S
E
C
N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
5
6
T
R
O
P
E
R
'
S
R
O
T
C
E
R
D
I
The Euronav Group
Euronav Ship Management SAS
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. 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 ocean-going oil tankers of Euronav and the supervision
of the construction of newbuildings. Ship management includes crewing, technical
procurement, accounting, health, safety, environmental protection and quality
assurance, legal advice, as well as fleet IT support.
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.
Euronav Hong Kong Ltd
Euronav Hong Kong Ltd. is the holding company of six wholly owned subsidiaries
(two of which are in process of winding up) and three 50% joint venture companies
(one of which is in process of winding up). 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
E.S.M.C. Euro-Ocean Ship Management (Cyprus) Ltd, a ship management company
that handles the crew management of the FSOs. Euronav Hong Kong Ltd. also fully
owns Fiorano Shipholding Ltd. and Larvotto Shipholding Ltd. which both are former
joint venture companies that following the termination of the relevant joint venture
sold the Suezmax vessel they each owned to Euronav NV. Both Fiorano Shipholding
Ltd. and Larvotto Shipholding Ltd. are now in process of winding up.
TI Asia Ltd. and TI Africa Ltd, 50 per cent. joint venture companies with a company
which belongs to the International Seaways (INSW) group, are the owners of
respectively the FSO Asia and FSO Africa, both currently employed at the Al
Shaheen field offshore Qatar. The 50 per cent. joint venture company Kingswood
Co. Ltd. with a company which belongs to the Oak Maritime group fully owns Seven
Seas Shipping Ltd. which following the termination of the relevant joint venture
sold the VLCC it owned to Euronav NV. Both Kingswood Co. Ltd. and Seven Seas
Shipping Ltd. are now in process of winding up.
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 applied for the Belgian
tonnage tax regime and obtained the authorization as of January 1, 2016.
Euronav MI Inc.
In the fourth quarter of 2017, Euronav NV incorporated a new wholly-owned
subsidiary, Euronav MI Inc., a company incorporated and existing under the laws
of the Republic of the Marshall Islands, for the purposes of the upcoming merger
(the 'Merger') with Gener8 Maritime Inc. ('Gener8'). Pursuant to the merger
agreement entered into between Euronav and Gener8 on 20 December 2017,
Euronav MI Inc. will merge with and into Gener8. The exact process of the Merger
and the transactions related thereto, are described in detail in the information
memorandum for the listing of the newly issued shares following the Merger and
which shall be made available in the investors section on the Euronav website.
Tankers UK Agencies Ltd. (TI Pool)
In 2017, the corporate structure of Tankers International pool ('TI Pool') was
rationalized. Under the new structure, the shares of Tankers UK Agencies Ltd.
('TUKA'), fully held at the time by Tankers International LLC ('TI LLC'), an entity
incorporated under the laws of the Marshall Islands, have been distributed to
the two remaining founding members of the TI Pool, (namely Euronav NV and
International Seaways INC), to form a 50-50 joint venture.
Additionally, a new company, Tankers International Ltd. ('TIL'), was incorporated
under the laws of the United Kingdom, and is now fully owned by TUKA. TIL
became the disponent owner of all of the vessels in the TI Pool as all the vessels
are now time chartered to TIL at a floating rate equivalent to the average spot rate
achieved by the pool times the pool point assigned to each vessel.
This new structure allowed the TI Pool to arrange for a credit line financing in
order to lower the working capital requirement for the Pool participants which
potentially can attract additional pool participants.
Current structure
Euronav NV Belgium
100%
100%
100%
100%
100%
100%
100%
50%
Euronav
Ship Management
SAS France
Euronav
Shipping NV
Belgium
Euronav
Tankers NV
Belgium
Euronav SAS
Euronav(UK)
Agencies Ltd
France
United Kingdom
Euronav
Hong Kong Ltd
Hong Kong
Euronav MI Inc
Tankers UK
Agencies Ltd
Marshall Islands
United Kingdom
50%
Tankers
International
LLC
Marshall Islands
100%
100%
50%
100%
100%
100%
100%
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
Larvotto
Shipholding
Ltd
Fiorano
Shipholding
Ltd
TI Africa
Ltd
TI Asia
Ltd
Singapore
Luxembourg
Hong Kong*
Hong Kong*
Hong Kong
Hong Kong
E.S.M.C.
Euro-Ocean
Ship Manage
ment Ltd
Cyprus
100%
Tankers
International
Ltd
UK
100%
100%
Euronav Ship
Management
(Hellas)
Branch Office
Greece
Seven Seas
Shipping Ltd
Marshall
Islands*
100%
100%
TI Africa
Qatar
Branch
TI Asia
Qatar
Branch
Qatar
Qatar
* to be dissolved
P
U
O
R
G
V
A
N
O
R
U
E
E
H
T
7
6
T
R
O
P
E
R
Y
T
V
T
C
A
I
I
Products
and services
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 March
19, 2018 the Euronav core fleet (owned and operated) has a weighted average age of
8.1 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. The Euronav Suezmax fleet that is
operated on the spot market is partly traded through Suezmax Chartering.
VLCC fleet
THE TANKERS INTERNATIONAL (TI) POOL
Euronav’s 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 March 19, 2018. By participating in a pool, Euronav and its customers benefit
Average age
profile
of Euronav
owned VLCC
and V-Plus
(and TC-in)
(cid:5072)(cid:609)(cid:461)
(cid:609)(cid:461)
0-5 years old
5-10 years old
24%
48%
24%
10-15 years old
4%
> 15 years old
(cid:5072)
(cid:461)
(cid:3235)
(cid:2668)
(cid:461)
(cid:474)
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.
Suezmax fleet
Euronav’s 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. Euronav chooses to employ a part of its Suezmax fleet on
long-term time charter. This strategy allows the Company to benefit from a source
of secure, steady and visible flow of income. Another part of the Suezmax fleet is
traded on the spot market as part of Suezmax Chartering, a commercial joint venture
with Diamond S Management LLC and Frontline Ltd. On March 19, 2018 Euronav
owns and employs 14 Suezmax vessels which are traded on the spot market. After
taking delivery of hull S909, hull S910, hull S911 and hull S912, Suezmax vessels with
specialized Ice Class 1C capability which are under construction at the Hyundai Heavy
Industries shipyard in South Korea, Euronav will own and employ 22 Suezmaxes.
Average age
profile of
Euronav owned
Suezmax
(and TC-in)
(cid:790)(cid:525)(cid:3157)
(cid:525)(cid:790)
0-5 years old
24%
59%
17%
0%
5-10 years old
10-15 years old
> 15 years old
Far East
US Gulf
U
S
G
ulf – A
sia
VLCC
Suezmax
Both VLCC and Suezmax
Europe
W
e
s
t
A
f
r
i
c
a
West Africa
W
e
st A
– Euro p e
frica – US Gul f
L
a
t
a
m - F
E
u
r
o
p
ar E
ast
e - F
a
r E
a
st
E
a
s
t – E u r ope
Mid East – Europe
Mid East – U
ulf
S G
W
e
s
t
A
f
r
i
c
a
-
A
s
i
a
L
atam - Far East
Mid East
M
i
d
Asia
M
i
d East - A s i a
M
i
FSO and FPSO market
FPSO (Floating Production Storage and Offloading)* and FSO (Floating Storage and
Offloading)* systems have become the primary method today for many offshore oil
and gas producing regions around the world.
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 in designing, transporting, 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.
Most FPSOs and FSOs are ship-shaped and can be secured to the seabed via a variety
of mooring systems, the choice of which is determined by the specific environment.
d
E
a
s
t
– Pacific Rim
* See the annual report glossary for further
details.
S
E
C
I
V
R
E
S
D
N
A
S
T
C
U
D
O
R
P
1
7
(cid:2040)
(cid:474)
(cid:461)
(cid:461)
(cid:461)
(cid:515)
(cid:461)
They are suitable for a wide range of water depth, environmental conditions and
can be designed with the capability of staying on location for continuous operations
for 20 years or longer. Over the years, advanced mooring systems as well as
advancements in subsea equipment have made FPSO and FSOs useful in deeper and
rougher waters.
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.
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, now International Seaways Inc.). 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.
FSOs provide field storage (ranging from 60,000 to 3 million barrels) and offloading
in a variety of situations. Most of them store oil although there are a few LPG or LNG
FSOs.
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.
On May 17, 2017, Euronav announced that the joint venture with International
Seaways ('INSW') signed a contract for five years for the FSO Africa and FSO Asia
in direct continuation of the previous contractual service. The contract was signed
with North Oil Company ('NOC'), the new operator of the Al-Shaheen oil field,
whose shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P Golfe
Limited.
The new contracts for these custom-made 3 million barrels capacity units, which
have been significantly converted and that have been serving the Al-Shaheen field
without interruption since 2010, have a duration of five years and became effective
at the expiry of the previous contracts with Maersk Oil Qatar in the third quarter
of 2017.
The FSO Africa and FSO Asia floating storage platforms are both high specification
and long duration assets with a potential trading life to 2032.
Also, at the end of 2017 Euronav sold the VLCC Flandre to a global supplier and
operator of offshore floating platforms and will be converted into an FPSO by her
new owner.
An FPSO is a floating production system that receives fluids (crude oil, water,…) from
a subsea reservoir through risers, which then separate fluids into crude oil, natural
gas, water and impurities within the topsides production facilities onboard. Crude
oil stored in the storage tanks of the FPSO is offloaded onto shuttle tankers to go to
market or for further refining onshore.
"
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.
T
R
O
P
E
R
Y
T
V
T
C
A
I
I
Ship
Management
Fleet management is conducted by three wholly-owned subsidiaries: Euronav Ship
Management SAS, Euronav SAS and Euronav Ship Management (Hellas) Ltd. Euronav
has also established an office in Singapore, Euronav Singapore Pte Ltd, to enhance
the support services offered to the vessels that frequently call Asian ports. The skills
of its seagoing officers, crew and shore-based staff, including skilled and 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 the vast majority of its 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,
such as the North Atlantic and East Canada, 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 upon signing on
and off, sophisticated communication systems 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.
T
N
E
M
E
G
A
N
A
M
P
H
S
I
3
7
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, on shore and
at sea.
Euronav practices genuine performance planning and appraisal, training and
development, and encourages the promotion from within while offering opportunities
to competent professionals to join the Company. 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;
• commitment to 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 comprising experienced officers and crew;
• comprehensive health, safety, quality and environmental protection management
system;
• insurance claims handling;
• global sourcing of bunkering, equipment and services for optimum synergies,
pricing and quality;
• financial, information technology, human resources and legal services to
support the Group’s assets’ values;
• project management for:
⋅ newbuilding supervision, including pre- and post-contract consultancy and
technical support;
⋅ FSO conversions;
⋅ upgrade of assets for improved operational efficiency;
• commercial management;
• operational management.
Euronav utilizes a set of clearly defined Key Performance Indicators (KPIs) for its
ship management services as well as standardized inspection reports which are
thoroughly evaluated to facilitate the measurement of performance such as:
• safety and environmental performance;
• vessel reliability;
• crew and shore staff retention and wellbeing;
• 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 weekly fleet management coordination
meetings monitor the trend and set the course of actions.
"
The Euronav
Group provides a
full range of ship
management
services.
T
R
O
P
E
R
Y
T
V
T
C
A
I
I
Fleet of the Euronav
group as per
December 31, 2017
Marsh I = Marshall Islands
1 In 2017 the Alsace, the Ilma, the Iris, the
Nectar, the Simone, the Sonia and the TI
Europe have been in dry-dock and underwent
a special survey (standard procedure for ships
every five years). The Alsace in Singapore
(March), the Ilma in Singapore (May), the Iris
in Singapore (March), the Nectar in China
(October), the Simone in Singapore (April), the
Sonia in Singapore (August) and the TI Europe
in China (September).
2 Vessel sold on November 17, 2017 and delivered
to its new owners on December 4, 2017.
3 Vessel sold on November 10, 2017 and delivered
to its new owners on December 20, 2017.
4 Vessel sold on May 23, 2017 and delivered to its
new owners on June 9, 2017.
Owned VLCCs and V-Plus
Name
Owned
Built
Dwt
Draft
Flag
Length (m)
Shipyard
Alex
Alice
Alsace1
Anne
Antigone
Aquitaine
Ardeche
Artois2
Flandre3
Hakata
Hakone
Hirado
Hojo
Ilma1
Ingrid
Iris1
Nautic
Nectar1
Newton
Noble
Sandra
Sara
Simone1
Sonia1
TI Europe1
TI Hellas
TI Topaz4
V.K. Eddie
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%
100%
100%
2016
2016
2012
2016
2015
2017
2017
2001
2004
2010
2010
2011
2013
2012
2012
2012
2008
2008
2009
2008
2011
2011
2012
2012
2002
2005
2002
2005
299,445
299,320
320,350
299,533
299,421
298,767
298,642
298,330
305,688
302,550
302,624
302,550
302,965
314,000
314,000
314,000
307,284
307,284
307,284
307,284
323,527
323,183
313,988
314,000
441,561
319,254
319,430
305,261
21.60
21.60
22.50
21.60
21.60
21.62
21.62
21.13
22.42
21.03
21.03
21.03
21.64
22.37
22.38
22.37
22.72
22.72
22.30
22.72
21.32
22.62
22.10
22.10
24.53
22.52
22.52
22.42
Belgian
Belgian
French
French
Greek
Belgian
Belgian
French
French
French
Greek
Greek
Belgian
Belgian
Belgian
Belgian
Marsh I
Marsh I
Belgian
Belgian
French
French
Belgian
French
French
Belgian
Belgian
Panama
333.00
333.00
330.00
333.00
333.00
333.00
333.00
333.00
332.00
333.00
333.00
333.00
330.00
319.03
319.03
333.14
321.67
321.60
321.66
321.67
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.
Hyundai H.I.
Hyundai H.I.
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.
STX O&S
STX O&S
STX O&S
STX O&S
Daewoo H.I.
Hyundai H.I.
Hyundai H.I.
Daewoo H.I.
7
1
0
2
,
1
3
R
E
B
M
E
C
E
D
R
E
P
S
A
P
U
O
R
G
V
A
N
O
R
U
E
E
H
T
F
O
T
E
E
L
F
5
7
1 Vessels sold on December 16, 2016 as part of
a sale and leaseback agreement. Euronav has
leased back the four VLCCs under a five-year
bareboat contract.
2 In 2017 the Navarin, the Neptun and the
Nucleus have been in dry-dock and underwent
a special survey (standard procedure for ships
every five years). The Navarin in Singapore
(April), the Neptun in China (June) and the
Nucleus in China (May).
Name
Owned
Nautilus1
Navarin1,2
Neptun1,2
Nucleus1,2
100%
100%
100%
100%
Name
Artois1
Flandre2
TI Topaz3
Owned
100%
100%
100%
Built
2006
2007
2007
2007
Built
2001
2004
2002
1 Vessel sold on November 17, 2017 and delivered
to its new owners on December 4, 2017.
2 Vessel sold on November 10, 2017 and delivered
to its new owners on December 20, 2017.
3 Vessel sold on May 23, 2017 and delivered to its
new owners on June 9, 2017.
VLCCs chartered in
Dwt
307,284
307,284
307,284
307,284
Draft
22.72
22.72
22.72
22.72
Flag
Marsh I
Marsh I
Marsh I
Marsh I
Length (m)
Shipyard
321.70
321.65
321.70
321.64
Dalian S.I.
Dalian S.I.
Dalian S.I.
Dalian S.I.
VLCCs sold in the course of 2017
Dwt
298,330
305,688
319,430
Draft
21.13
22.42
22.52
Flag
French
French
Belgian
Length (m)
Shipyard
333.00
332.00
332.99
Hitachi Zosen
Daewoo H.I.
Hyundai H.I.
T
R
O
P
E
R
Y
T
V
T
C
A
I
I
TBO = to be owned / TBA = to be announced
1 Vessel sold on November 16, 2017 and delivered
to its new owners on November 29, 2017.
2 In 2017 the Cap Lara, the Capt. Michael and the
Filikon have been in dry-dock and underwent
a special survey (standard procedure for ships
every five years). The Cap Lara in Singapore
(January), the Capt. Michael in Dubai (January)
and the Filikon in China (August).
Flag
Greek
Greek
Belgian
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Greek
Belgian
Greek
Greek
Belgian
Greek
TBA
TBA
TBA
TBA
Length (m)
Shipyard
274.00
277.32
274.00
274.06
Samsung H.I.
Hyundai H.I.
Samsung H.I.
Samsung H.I.
274.00
Samsung H.I.
274.06
274.00
274.29
274.00
274.29
274.06
274.00
274.00
274.82
274.00
274.20
274.20
274.20
274.82
277.00
277.00
277.00
277.00
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.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Hyundai H.I.
Owned Suezmax vessels
Name
Owned
Built
Dwt
Cap Charles
100%
Cap Diamant
100%
Cap Felix
100%
Cap Georges1 100%
Cap
Guillaume
Cap Jean
Cap Lara2
Cap Leon
100%
100%
100%
100%
Cap Philippe
100%
Cap Pierre
100%
Cap Romuald 100%
Cap Theodora 100%
Cap Victor
100%
Capt. Michael2 100%
Felicity
Filikon2
Finesse
Fraternity
Maria
Hull S909
Hull S910
Hull S911
Hull S912
100%
100%
100%
100%
100%
TBO
TBO
TBO
TBO
2006
2001
2008
1998
2006
1998
2007
2003
2006
2004
1998
2008
2007
2012
2009
2002
2003
2009
2012
2018
2018
2018
2018
158,881
160,044
158,765
146,652
Draft
17.00
15.62
17.02
17.00
158,889
17.00
146,643
158,826
159,049
158,920
159,083
146,640
158,819
158,853
157,648
157,667
149,989
149,994
157,714
157,523
156,600
156,600
156,600
156,600
16.12
17.00
17.02
17.00
17.02
16.12
17.00
17.00
17.00
17.02
15.95
15.95
17.02
17.00
17.15
17.15
17.15
17.15
Suezmax vessels sold in the course of 2017
Name
Owned
Cap Georges1 100%
Built
1998
Dwt
146,652
Draft
17.00
Flag
Greek
Length (m)
Shipyard
274.06
Samsung H.I.
Owned FSOs (Floating, Storage and Offloading)
Name
Owned
FSO Africa
FSO Asia
50%
50%
Built
2002
2002
Dwt
442,000
442,000
Draft
24.53
24.53
Flag
Marsh I
Marsh I
Length (m)
Shipyard
380.00
380.00
Daewoo H.I.
Daewoo H.I.
7
1
0
2
,
1
3
R
E
B
M
E
C
E
D
R
E
P
S
A
P
U
O
R
G
V
A
N
O
R
U
E
E
H
T
F
O
T
E
E
L
F
7
7
I
Y
T
I
L
I
B
S
N
O
P
S
E
R
L
A
C
O
S
E
T
A
R
O
P
R
O
C
I
Health, Safety,
Quality, Environment
and Society
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 anti-pollution control measures and waste handling
and reducing processes, by maintaining a fleet of high standards irrespective of the
vessels’ age and by 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 vision, mission, its Corporate
Governance Charter, Code of Conduct, Compliance Officer and relevant 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.
Health
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, crew wellbeing, physical
exercise and storage of food and nutritional practices.
HEALTH AWARENESS
Targeted for seafarers, the health awareness focuses on the following 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);
• pre-joining medical examinations are extensive and above the minimum
regulatory standards.
"
For our society:
To transport an
essential source of
energy in a manner
that is economically,
socially and
environmentally
viable now and in the
future.
DRUG AND ALCOHOL POLICY
Euronav is fully committed to maintaining a safe and healthy working environment by
implementing a strict drug and alcohol policy. Any violation of that policy, including
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.
Safety
Euronav is committed to operating in accordance with the highest standards of safety
in the marine transportation industry and employs competent and 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 its 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 and wellbeing is concerned.
FLEET
The Euronav fleet has been built in the world’s most 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. All vessels are adequately recruited as per needs and maintained
throughout their lifetime. All vessels above 15 years of age have undergone a condition
assessment program (CAP) with the highest rating (CAP 1).
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, 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;
• Panama Canal SOPEP (PC SOPEP) dealing with similar emergencies and the
response in transiting Panama Canal;
• a range of Table Top Exercises (TTX): emergency drills including officers, vessel
staff and external participants such as qualified individual or salvage and fire
experts;
• monthly security drills on board dealing with possible security threats.
Quality
By focusing on quality, Euronav ensures its employees to receive a level of care and
training designed to deliver the best service to its clients, whilst striving to have the
least 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.
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’.
I
Y
T
E
C
O
S
D
N
A
T
N
E
M
N
O
R
I
V
N
E
,
Y
T
I
L
A
U
Q
,
Y
T
E
F
A
S
,
H
T
L
A
E
H
1
8
the public
* RvA (Dutch Accreditation Council - 'Raad
voor Accreditatie' in Dutch) and UKAS
(United Kingdom Accreditation Service) are
organizations responsible for determining,
technical
interest,
in
competence and integrity of companies
such as those offering testing, calibration
and certification services. Accreditations
are provided by certifications bodies
directly. However, Euronav chose to be
audited by subject certification bodies as
those accreditations increase credibility.
the
CERTIFICATES
Euronav Ship Management SAS is in possession of an ISM Document of Compliance
(DOC) from the French Administration for French flag vessels, as well as from Bureau
Veritas on behalf of the Marshall Islands Flag Administration. It is also in possession
of the Certification for Quality Management Systems (ISO 9001 (RvA*)), Certification
for Environmental Management Systems (ISO 14001 (UKAS*)) and Certification for
Occupational, Health and Safety Management Systems (OHSAS 18001 (UKAS)).
Euronav Ship Management (Hellas) Ltd. is in possession of a 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 (RvA) as well
as 14001 (RvA) certifications are obtained by the American Bureau of Shipping.
TRAINING
Euronav built a comprehensive system of continuous training programs and
seminars both on board and ashore, ensuring a constant awareness among all
personnel in their day-to-day operational duties. The training needs are identified
during the appraisal process and the training plan is prepared based on these needs.
Training activities are carried out in a training room or online through a computer-
based program.
ANTI-CORRUPTION
Euronav is committed to conduct all of its business operations around the world
in an honest, fair, transparent and ethical manner. The Anti-Corruption Policy is
applicable to employees and persons who act on behalf of Euronav in a long-term
relationship such as commercial agents, sub-contractors, consultants, brokers,
lawyers and accountants. Specific attention is given to dealing with those ‘Third Party
Associates’ which are required to certify their compliance with the Anti-Corruption
Policy. In general, any third parties who intend to trade with Euronav are subject
to detailed scrutiny by the Internal Control department, which also considers the
appropriateness of the business relation in view of the Company’s Anti-Corruption
Policy in addition to the Third Party Risk Policy. Euronav’s Code of Business Conduct
and Ethics also offers guidelines for the relationships with colleagues, customers,
suppliers and government agencies. An in-house training of the Company’s policies
and codes is conducted on a regular basis for all employees. Any concerns in relation
to the Anti-Corruption Policy or inappropriate conduct of employees or business
relationships in the commercial business environment, may be raised through the
Company’s Whistleblower Hotline Platform.
Environment
Euronav aims for safety and 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.
During quarterly management review meetings, management reassesses and
initiatives regarding the Company’s environmental performance.
implements
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.
"
Euronav aims
for safety and
environmental
excellence
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.
I
Y
T
I
L
I
B
S
N
O
P
S
E
R
L
A
C
O
S
E
T
A
R
O
P
R
O
C
I
Euronav’s dedication to reducing emissions is demonstrated by:
• active Fleet Energy Management i.e. development of plan and implementation of
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 including
online reporting.
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:
• installing devices that improve propulsion efficiency;
• installing 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 and results in lower 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 where necessary;
• installing hardware and software for close monitoring of a vessel’s speed and
consumption performance.
The data below show that Euronav’s efforts do result in a substantial decrease of
greenhouse gas emissions.
ANNUAL GREENHOUSE GAS EMISSIONS
Euronav seeks to develop a climate and sustainability strategy which meets the needs
of stakeholders, regulators, and the environment, to take a proactive role in achieving
environmental
improvements within the shipping sector. Total organisational
emissions have been normalised by total freight moved to provide an intensity of
3.3 gCO2e/t.km.
Type of Emissions
2017 Emissions (tCO2e)1
Scope 1 (Direct)
2,473,927
Scope 2 (Indirect Energy)
192
Scope 3 (Indirect Other)
Total
478,189
2,952,308
Scope 1: Emissions from Euronav’s sources that are controlled directly by the Company,
including the combustion of fuel from vehicles and vessels, and building operations.
Scope 2: Emissions from imported energy, such as purchased electricity, heat or steam.
Scope 3: Emissions from non-owned sources that are related to the Company’s
activities. This includes business travel, the Well-to-Tank emissions related to the
processing of fuels, and the transmission and distribution of electricity.
Results
Euronav’s carbon footprint for the period of January 1, 2017 to December 31,
2017 is 2,952,308 tonnes of CO2 equivalent.
83.6% of total emissions originate from Scope 1 fuel combustion on ships, with
a further 15.9% associated with the Scope 3 Well-to-Tank emissions of these
fuels. Business travel contributes to 0.3% of total emissions.
Methodology
In accordance with the GHG Protocol, all Scope 1 and 2 emissions have been
reported for the period January 1, 2017 - December 31, 2017. Scope 3 business
travel and energy related emissions have also been reported.
1 Certain aspects of the Company's operations
have been excluded, due to a lack of data
availability. These account for less than 2% of
total emissions so are not considered material.
This includes electricity from two one-person
offices, sludge incineration from non-managed
ships. Values have been rounded so may not
tally completely in the table.
I
Y
T
E
C
O
S
D
N
A
T
N
E
M
N
O
R
I
V
N
E
,
Y
T
I
L
A
U
Q
,
Y
T
E
F
A
S
,
H
T
L
A
E
H
3
8
I
Y
T
I
L
I
B
S
N
O
P
S
E
R
L
A
C
O
S
E
T
A
R
O
P
R
O
C
I
The disclosed emissions cover all sources within our operational control. As
such, we have included all operations that are directly managed by us, or for
third party managed vessels adhering to our Ship Management Agreements and
leased ships.
Emissions from lone workers in Doha and Hong Kong, and sludge incineration
within a small part of our operations have not been included in these
calculations. These are believed to be immaterial when compared to emissions
from shipping fuel.
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 minimum 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;
• placing sewage treatment plants on board handling the black and grey waters in
order to minimize the impact on the environment.
FURTHER INITIATIVES
The safety of human life and the protection of the environment are primary concerns
to Euronav. Euronav is committed to implement 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;
• take effective measures to avoid pollution incidents;
• cooperate with maritime organizations and government, trade and industry
associations to achieve the highest standards of safety and preservation of the
environment;
"
At Euronav, the
human rights of
our personnel
both on board and
offshore is a very
important aspect
of the Company’s
management.
• protect and preserve resources, preventing pollution by an environmentally
conscious operation of vessels;
• reduce waste;
• consider environmental issues in all design and development projects;
• introduce 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;
• participate in the voluntary global search and rescue system (AMVER).
SHIP RECYCLING
Although our fleet is relatively young, vessel recycling is an important matter
which Euronav is actively working on. 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. Other notations (i.e. ENVIRO) have also proven their
significance. These documents need 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 and the majority of the vessels in the fleet are carrying a green passport
and/or other notations (i.e. ENVIRO).
Society
HUMAN RIGHTS
At Euronav the human rights of our personnel both on board and offshore is a very
important aspect of the Company’s management. We believe the greatest impact of
our business on human rights lays in the area of human rights in the workplace on
board. It is indeed in the workplace on board where a great number of persons from
all kinds of nationalities and believes work and live together, day in day out, without
the opportunity to return to their family every evening.
More specifically, Euronav focuses on the wellbeing of its seafarers by providing fair
working conditions on board through offering fitness facilities, healthy food prepared
in compliance with the safety standards in addition to extensive pre-joining medical
examinations. Euronav also endeavors to ensure equal and non-discriminatory
treatment and offers ample opportunities for continuous education. To ensure the
personnel a continuous development of their skills and in order to maintain the
quality of service, Euronav foresees a level of care and training for its employees
both on board and offshore by setting measurable annual objectives and KPIs. The
Company’s vision on equal and non-discriminatory treatment is detailed in the Code
of Conduct, the Staff Handbook and supervised by the Compliance Officer. Both
policies have chapters with respect to the social and ethical behavior that is expected
from Euronav personnel.
Euronav has adopted a Whistleblower Protection Policy in order to protect individuals
who want to lawfully raise a legitimate concern. If an individual does not feel
comfortable reporting concerns to a supervisor or manager, he or she can use a
free telephone service or web-based platform that enables him or her to report a
concern in complete confidentiality. Euronav's Whistleblower Hotline is hosted by
an independent third party, in order to ensure a straightforward, confidential, secure
and convenient way of reporting. Whenever a complaint is made, the Chairman of the
Audit and Risk Committee and the General Counsel will receive a notification and
they will be in charge of the investigation of the complaint.
COMMUNITY INVOLVEMENT
Euronav wants to positively impact 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
I
Y
T
E
C
O
S
D
N
A
T
N
E
M
N
O
R
I
V
N
E
,
Y
T
I
L
A
U
Q
,
Y
T
E
F
A
S
,
H
T
L
A
E
H
5
8
initiatives and support employee involvement, be it volunteering, fundraising or
donations through options such as fund-matching or sponsoring specific events. A
few of the charities to which Euronav contributes financially, in line with its policy,
are described hereafter.
Benefit for children 2017
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 2017 Valero
Texas Open Benefit for Children Golf Classic and the Valero Texas Open contributed
USD 11 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.
The Ocean Cleanup
Rather than sending a traditional season’s greetings card, Euronav 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’s mission is to
develop advanced technologies to rid the world’s oceans of plastic. The organization
was founded in 2013 by Boyan Slat (1994), a Dutch student. In 2014 the United Nations
Environment Program awarded Slat with the ‘Champion of the Earth’ accolade. The
Ocean Cleanup has received over USD 31 million in funding since inception. In 2018
they will start the cleanup, by deploying their very first cleanup system in the Great
Pacific Garbage Patch, after which they will scale up to a fleet of around 50 systems.
They estimate to be able to remove 50 % of the Great Pacific Garbage Patch within
five years’ time from full-scale deployment.
The Care
The Association of Care is a Panhellenic Association which facilitates prevention,
information and support for people with cerebral palsy, mental retardation and Down
syndrome. Founded in 2008 in Piraeus, the organization provides community service to
families fleeing while seeking help for health problems. They adopt families, focusing
on children with special abilities and help them in various ways by offering basic
necessities and accommodating care thanks to collaboration with health specialists.
Mitera - Center for the Protection of the Child of Attica
The center hosts 102 children ranging from infants to children six years of age. Roughly
half the children who reside at the center are orphans; others were abandoned by
their biological parents. A number of children cope with physical or mental disabilities
such as Down syndrome. Single pregnant women also receive aid as the center covers
their birth expenses.
ARGO Foundation for Seamen's children with special needs
ARGO is dedicated to assisting families of Greek seamen of which the children battle
with intellectual deprival, autism or infirmities. The organization offers education
and care to those with special needs. The charity was founded in 1985 by seamen’s
wives with disabled children. Nowadays, Piraeus based ARGO arranges services for
60 individuals from 17 to 45 years old, mainly children of seamen, with medium and
heavy learning disabilities.
is an
Doctors without Borders
Doctors without Borders
international humanitarian non-governmental
organization (NGO) best known for its projects in war-torn regions and developing
countries affected by endemic diseases. In 2015, over 30,000 personnel provided
medical aid in over 70 countries. The organization was founded in the aftermath
of the Biafra secession in 1971, by a small group of French doctors and journalists
who sought to expand accessibility to medical care across national boundaries and
irrespective of race, religion, creed or political affiliation.
Hatzikyriakio - foundation for orphans
Hatzikyriakio Childcare Institution admits girls six years of age and older, coming from
disturbed family backgrounds facing serious financial and social issues. Along with
accommodation, the Institution provides these girls with a well-rounded education
"
Euronav has a long
history of supporting
apprentices,
cadets, interns and
trainees on our ships
and in our shore
(cid:725)(cid:724)(cid:742)(cid:728)(cid:727)(cid:3)(cid:738)(cid:729)(cid:1025)(cid:726)(cid:728)(cid:742)(cid:673)
I
Y
T
I
L
I
B
S
N
O
P
S
E
R
L
A
C
O
S
E
T
A
R
O
P
R
O
C
I
preparing them to become responsible and self-dependent adults, with love and
emotional support being the key factors in the Institution’s mission.
SOS Children's Villages
SOS Children's Villages
international
development organization which strives to meet the needs and protect the interests
and rights of children since 1949. The organization's work focuses on abandoned,
destitute and orphaned children requiring family-based child care.
independent non-governmental
is an
The Ark of the World - caring for poor, underprivileged children and families
The Ark of the World is a charity that welcomes and cares for abandoned children. The
Ark operates a main facility in Kolonos, one of the poorest districts in the Greek capital
and two additional centers near Ioannina and the island of Chios. The Ark has cared
for thousands of children since its founding. Currently 200 children, of which three
quarters are Greek, as well as others from nations throughout the world who ended
up on the streets of Athens receive care. The Ark operates as an orphanage, caring
for newborns and children up to 18 years old, as well as a day-care center for low-
income families whose parents need a safe place to leave their children while they
go to work. Over the years The Ark started assisting low-income single mothers to
ensure the children stay with their mothers instead of being institutionalized. The Ark
also provides a safe haven for mothers who need protection from abusive partners.
Education
SCHOOL AND TRAINING PROGRAM
Euronav has a long history of supporting apprentices, cadets, interns and trainees
on our ships and in our shore based offices. Being committed to learning about
life at sea and about obtaining the special skills needed to be successful in this
environment are key factors to inviting young professionals to join our Company.
Having the capability and potential to thrive in this challenging sector are vital
characteristics we look for in students.
I
Y
T
E
C
O
S
D
N
A
T
N
E
M
N
O
R
I
V
N
E
,
Y
T
I
L
A
U
Q
,
Y
T
E
F
A
S
,
H
T
L
A
E
H
7
8
We work with the following prestigious higher education bodies to take students,
apprentices, graduates and cadets into our ships for practical training, and this
includes a limited number of student sponsorships:
• National Technical University of Athens,
• Technological Education Institute of Piraeus, Naval Architects and Marine
Engineers,
• University of Piraeus, School of Maritime and Industrial Studies,
• University of the Aegean, School of Shipping, Trade and Transport,
• French Maritime School (Ecole Supérieure de la Marine Marchande),
• Antwerp Maritime Academy.
The Company attends student events to discuss the opportunities involved in
maritime careers and to encourage wider environmental debate. In 2017 we
supported Isalos.net, an educational initiative which invites students of marine
academies and universities in maritime studies to conferences. Its panel consists
of executives and experts in the maritime industry and from other well established
companies in Greece. In 2017 Euronav participated in three Isalos.net events.
The Euronav Nantes office participates in the local school Ship Owner Careers Day,
which shares information about the shipping sector with young people who are
contemplating their future careers. We also invite high potential 5th year students
to Junior Officers Conferences. Our Athens office has been supporting the Engineer
School of Marine Academies in Chios and Macedonia to visit the engine makers’
factories in Germany and Italy for wider understanding.
Euronav Ship Management (Hellas) Ltd. is participating in internship programs
of Greek Universities, focusing on 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.
The Euronav Antwerp office participates in the Open Campus Day of the Antwerp
Maritime Academy, where we present our Company and share information with
students considering a career at sea. Each year during the summer months, we
also give students of the Antwerp Maritime Academy the opportunity to do a Cadet
traineeship on board our vessels to experience the life and work of a seafarer.
This training program is established in cooperation with the Royal Belgian Ship
Owners’ Association. In 2017 we hired seven Cadets in this program, five in the Deck
Department and two in the Engine Department.
Additionally, Euronav collaborated with AIESEC, an international student body which
helps young people discover and develop their potential. The specific program in
2017 was named International Kindergarten with the scope to eliminate any form
of xenophobia and school bullying for students, three to six years old. Euronav
supported international AIESEC students who visited Greece to run this program in
selected kindergartens in Athens.
I
Y
T
I
L
I
B
S
N
O
P
S
E
R
L
A
C
O
S
E
T
A
R
O
P
R
O
C
I
Human
Resources
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 150
employees. This geographic span across Europe reflects a deep-rooted maritime
history and culture built up over generations. Over 2,800 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 has 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, whom 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.
"
For our employees:
To inspire and
enable talented,
hard-working people
to achieve their
career goals in a
healthy, challenging
and rewarding
environment.
S
E
C
R
U
O
S
E
R
N
A
M
U
H
9
8
21 Belgium
97 Bulgaria
2 Canada
36 France
143 Greece
Total officers and apprentices on board = 563
1 Slovenia
1 Colombia
1 Netherlands
1 Ecuador
2 Pakistan
47 Ukraine
11 Russia
14 Romania
89 Philippines
33 Panama
29 Indonesia
35 Croatia
105 El Salvador
16 Romenia
Total ratings on board = 618
1 Chile
93 Honduras
18 Indonesia
385 Philippines(cid:516)(cid:461)
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.
I
Y
T
I
L
I
B
S
N
O
P
S
E
R
L
A
C
O
S
E
T
A
R
O
P
R
O
C
I
(cid:2708)
(cid:461)
(cid:3339)
(cid:461)
(cid:2597)
(cid:461)
(cid:876)
(cid:461)
(cid:857)
(cid:461)
(cid:470)
ACCOMPLISHMENTS IN 2017
In 2017 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 from
December 2017 through January 2018, using an established 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;
• HR software: internal procedure for the selection and evaluation of new software
to cover the expanding needs of the Company;
• Maritime HR Association (part of Spinnaker Global): active participation to the
forum of which Euronav is a founding member.
S
E
C
R
U
O
S
E
R
N
A
M
U
H
1
9
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.
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.
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).
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.
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
Y
R
A
S
S
O
L
G
quantities. The containment for this type of cargo is the tanks of the ship.
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).
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.
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.
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.
Y
R
A
S
S
O
L
G
5
9
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.
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.
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), to process it and to 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 Organization – 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 Organization
(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
Y
R
A
S
S
O
L
G
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.
P&I Insurance - Protection and indemnity insurance, 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.
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.
Y
R
A
S
S
O
L
G
7
9
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.
Tonnage Tax Regime - An alternative way of calculating taxable income of operating
qualifying ships. Taxable profits are calculated by reference to the net tonnage of the
qualifying vessels a company operates, independent of the actual earnings (profit or
loss).
Y
R
A
S
S
O
L
G
Ton-mile – A unit for freight transportation equivalent to a ton of freight moved one
mile.
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 1500 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.
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.
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.
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.
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.
Y
R
A
S
S
O
L
G
9
9
Consolidated financial statements
Notes to the consolidated financial statements
Statutory auditor's report to the general meeting of Euronav NV as of and
for the year ended December 31, 2017
Statutory financial statements Euronav NV
102
107
184
190
Een Nederlandstalige versie van de geconsolideerde jaarrekening zal beschikbaar worden
gesteld 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.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of USD)
Assets
Non-current assets
Vessels
Assets under construction
Other tangible assets
Intangible assets
Receivables
Investments in equity accounted investees
Deferred tax assets
Total non-current assets
Current assets
Trade and other receivables
Current tax assets
Cash and cash equivalents
Non-current assets held for sale
Total current assets
TOTAL ASSETS
Equity and Liablities
Equity
Share capital
Share premium
Translation reserve
Treasury shares
Retained earnings
Equity attributable to owners of the Company
Non-current liabilities
Bank loans
Other notes
Other payables
Employee benefits
Provisions
Total non-current liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Bank loans
Other borrowings
Provisions
Total current liabilities
Note
December 31, 2017
December 31, 2016
8
8
8
-
10
25
9
11
-
12
3
-
-
-
13
-
15
15
17
16
-
17
-
15
15
-
2,271,500
63,668
1,663
72
160,352
30,595
2,487
2,383,163
86,136
777
156
183,914
18,413
964
2,530,337
2,673,523
136,797
191
143,648
-
280,636
166,342
357
206,689
-
373,388
2,810,973
3,046,911
173,046
1,215,227
568
(16,102)
473,622
173,046
1,215,227
120
(16,102)
515,665
1,846,361
1,887,956
653,730
147,619
539
3,984
-
805,872
61,355
11
47,361
50,010
3
158,740
966,443
-
533
2,846
38
969,860
69,859
-
119,119
-
117
189,095
TOTAL EQUITY AND LIABILITIES
2,810,973
3,046,911
The accompanying notes on pages 107 to 183 are an integral part of these consolidated financial statements.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(in thousands of USD except per share amounts)
2017
Jan. 1 - Dec 31, 2017
2016
Jan. 1 - Dec 31, 2016
2015
Jan. 1 - Dec 31, 2015
Note
Shipping income
Revenue
Gains on disposal of vessels/other tangible assets
Other operating income
Total shipping income
Operating expenses
Voyage expenses and commissions
Vessel operating expenses
Charter hire expenses
Loss on disposal of vessels/other tangible assets
Impairment on non-current assets held for sale
Loss on disposal of investments in equity
accounted investees
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)
4
8
4
5
5
5
8
3
24
8
-
5
6
6
25
7
-
14
14
14
14
513,368
36,538
4,902
554,808
(62,035)
(150,427)
(31,173)
(21,027)
-
-
(229,777)
(95)
(46,868)
684,265
50,397
6,996
741,658
(59,560)
(160,199)
(17,713)
(2)
-
(24,150)
(227,664)
(99)
(44,051)
846,507
13,302
7,426
867,235
(71,237)
(153,718)
(25,849)
(8,002)
-
-
(210,156)
(50)
(46,251)
(541,402)
(533,438)
(515,263)
13,406
7,266
(50,729)
(43,463)
208,220
6,855
(51,695)
(44,840)
351,972
3,312
(50,942)
(47,630)
30,082
40,495
51,592
25
1,358
1,383
1,383
0.01
0.01
203,875
174
204,049
355,934
(5,633)
350,301
204,049
350,301
1.29
1.29
2.25
2.22
158,166,534
158,297,057
158,262,268
158,429,057
155,872,171
157,529,562
The accompanying notes on pages 107 to 183 are an integral part of these consolidated financial statements.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
0
1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in thousands of USD)
2017
Jan. 1 - Dec 31, 2017
2016
Jan. 1 - Dec 31, 2016
2015
Jan. 1 - Dec 31, 2015
Note
Profit/(loss) for the period
1,383
204,049
350,301
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
Equity-accounted investees - share of other
comprehensive income
Other comprehensive income, net of tax
16
6
25
64
448
483
995
(646)
(44)
170
1,224
748
(429)
1,610
1,136
Total comprehensive income for the period
2,378
204,797
351,437
Attributable to:
Owners of the company
2,378
204,797
351,437
The accompanying notes on pages 107 to 183 are an integral part of these consolidated financial statements.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in thousands of USD)
Note
Share
capital
Share
premium
Trans-
lation
reserve
Hedging
reserve
Treasury
shares
Retained
earnings
Capital
and
reserves
Other
equity
interest
Total
equity
Balance at January 1, 2015
142,441
941,770
379
Profit (loss) for the period
Total other comprehensive
income
-
-
-
-
-
-
-
-
(429)
-
(429)
Total comprehensive income
Transactions with owners of
the company
Issue of ordinary shares
Conversion perpetual convertible
preferred equity
Dividends to equity holders
Treasury shares sold
Equity-settled share-based
payment
13 20,324
208,738
13 10,281
64,719
-
13
22
-
-
-
-
-
-
Total transactions with owners
30,605
273,457
BALANCE AT DECEMBER 31,
2015
173,046
1,215,227
(50)
Balance at January 1, 2016
173,046
1,215,227
(50)
-
-
-
13
13
22
Profit (loss) for the period
Total other comprehensive
income
Total comprehensive income
Transactions with owners of
the company
Dividends to equity holders
Treasury shares acquired
Treasury shares sold
Equity-settled share-based
payment
Total transactions with owners
BALANCE AT DECEMBER 31,
2016
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170
170
-
-
-
-
-
173,046
1,215,227
120
Balance at January 1, 2017
173,046
1,215,227
-
-
13
22
Profit (loss) for the period
Total other comprehensive
income
Total comprehensive income
Transactions with owners of
the company
Dividends to equity holders
Equity-settled share-based
payment
Total transactions with owners
BALANCE AT DECEMBER 31,
2017
-
-
-
-
-
-
-
-
-
-
-
-
173,046
1,215,227
568
-
-
-
-
-
-
120
-
448
448
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(46,062)
359,180 1,397,708
75,000 1,472,708
-
-
-
-
-
350,301
350,301
1,565
1,136
-
-
350,301
1,136
351,866
351,437
351,437
(19,357)
209,705
-
209,705
-
75,000 (75,000)
-
- (138,001)
(25,516)
33,779
(138,001)
8,263
- (138,001)
8,263
-
-
1,637
1,637
-
1,637
33,779 (181,237)
156,604 (75,000)
81,604
(12,283)
529,809 1,905,749
- 1,905,749
(12,283)
529,809 1,905,749
- 1,905,749
-
-
-
204,049
204,049
578
748
204,627
204,797
-
-
-
204,049
748
204,797
- (216,838)
-
(2,339)
(6,889)
3,070
(216,838)
(6,889)
731
- (216,838)
(6,889)
-
731
-
-
406
406
-
406
(3,819)
(218,771)
(222,590)
-
(222,590)
(16,102)
515,665 1,887,956
- 1,887,956
(16,102)
515,665 1,887,956
- 1,887,956
-
-
-
-
-
-
1,383
547
1,383
995
1,930
2,378
(44,286)
(44,286)
313
313
(43,973)
(43,973)
-
-
-
-
-
-
1,383
995
2,378
(44,286)
313
(43,973)
(16,102)
473,622 1,846,361
- 1,846,361
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
The accompanying notes on pages 107 to 183 are an integral part of these consolidated financial statements.
5
0
1
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of USD)
2017
Jan. 1 - Dec 31, 2017
2016
Jan. 1 - Dec 31, 2016
2015
Jan. 1 - Dec 31, 2015
Note
Cash flows from operating activities
Profit (loss) for the period
Adjustments for:
Depreciation of tangible assets
Depreciation of intangible assets
Loss (gain) on disposal of investments in equity
accounted investees
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
Amortization of deferred capital gain
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 and
prepayments
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
Acquisition of subsidiaries, 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
(Purchase of) Proceeds from sale of treasury
shares
Proceeds from new borrowings
Repayment of borrowings
Transaction costs related to issue of loans and
borrowings
Dividends paid
-
8
-
24
-
7
25
6
8
5
-
-
11
11
11
10-11
17
17
17
17
17
16
-
6-18
6-11
25
8
8
8
-
-
25
25
24
13
13
13
15
15
15
13
1,383
225,527
229,777
95
-
(160)
(1,358)
(30,082)
43,463
(15,511)
313
(1,010)
22,083
(52)
5,938
(1,499)
(3,648)
28,773
1,165
1,014
(6,727)
(3,726)
18
827
11
(39,595)
636
1,250
211,295
(176,687)
96,880
(1,203)
(11)
29
40,750
-
-
204,049
205,457
227,664
99
24,150
(603)
(174)
(40,495)
44,839
(50,395)
406
(34)
38,487
107
(755)
21,049
239
35,905
(6,817)
(138)
(7,547)
(3,591)
(226)
261
(100)
(33,378)
209
23,478
438,202
(342,502)
223,016
(178)
(18)
38
22,047
3,737
(6,755)
350,301
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
-
(40,242)
(100,615)
(205,873)
-
-
-
526,024
(710,993)
(5,874)
(44,133)
-
-
(6,157)
740,286
(774,015)
(4,436)
(216,838)
229,063
(19,357)
8,263
931,270
(1,367,871)
(8,680)
(138,003)
Net cash from (used in) financing activities
(234,976)
(261,160)
(365,315)
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(in thousands of USD)
2017
Jan. 1 - Dec 31, 2017
2016
Jan. 1 - Dec 31, 2016
2015
Jan. 1 - Dec 31, 2015
Note
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
12
-
12
(63,923)
206,689
882
76,427
131,663
(1,401)
(120,656)
254,086
(1,767)
143,648
206,689
131,663
The accompanying notes on pages 107 to 183 are an integral part of these consolidated financial statements.
Notes to the consolidated financial statements for the year
ended 31 December 2017
Note 1 - Significant accounting policies
Note 2 - Segment reporting
Note 3 - Assets and liabilities held for sale and discontinued operations
Note 4 - Revenue and other operating income
Note 5 - Expenses for shipping activities and other expenses from operating activities
Note 6 - Net finance expense
Note 7 - Income tax benefit (expense)
Note 8 - Property, plant and equipment
Note 9 - Deferred tax assets and liabilities
Note 10 - Non-current receivables
Note 11 - Trade and other receivables - current
Note 12 - Cash and cash equivalents
Note 13 - Equity
Note 14 - Earnings per share
Note 15 - Interest-bearing loans and borrowings
Note 16 - Employee benefits
Note 17 - Trade and other payables
Note 18 - Financial instruments - market and other risks
Note 19 - Operating leases
Note 20 - Provisions and contingencies
Note 21 - Related parties
Note 22 - Share-based payment arrangements
Note 23 - Group entities
Note 24 - Business combinations
Note 25 - Equity-accounted investees
Note 26 - Subsidiaries
Note 27 - Major exchange rates
Note 28 - Audit fees
Note 29 - Subsequent events
Note 30 - Statement on the true and fair view of the consolidated financial statements
and the fair overview of the management report
Note 1 - Significant accounting policies
1.REPORTING ENTITY
Euronav N.V. (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 interests in
associates and joint ventures.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
0
1
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 chartering strategy of primarily employing its vessels on the
spot market, including through the Tankers International (TI) Pool and also under
fixed-rate contracts and long-term time charters, which typically include a profit
sharing component.
A spot market voyage charter is a contract to carry a specific cargo from a load port
to a discharge port for an agreed freight per ton of cargo or a specified total amount.
Under spot market voyage charters, the Company pays voyage expenses such as
port, canal and bunker costs. Spot charter rates have historically been volatile and
fluctuate due to seasonal changes, as well as general supply and demand dynamics
in the crude oil marine transportation sector. Although the revenues generated by
the Company in the spot market are less predictable, the Company believes their
exposure to this market provides them with the opportunity to capture better profit
margins during periods when vessel demand exceeds supply leading to improvements
in tanker charter rates. The Company principally employs and commercially
manages their VLCCs through the TI Pool, a leading spot market-oriented VLCC pool
in which other shipowners with vessels of similar size and quality participate along
with the Company. The Company participated in the formation of the TI Pool in 2000
to allow themselves and other TI Pool participants, consisting of third-party owners
and operators of similarly sized vessels, to gain economies of scale, obtain increased
cargo flow of information, logistical efficiency and greater vessel utilization.
Time charters provide the Company with a fixed and stable cash flow for a known
period of time. Time charters may help the Company mitigate, in part, their exposure
to the spot market, which tends to be volatile in nature, being seasonal and generally
weaker in the second and third quarters of the year due to refinery shutdowns and
related maintenance during the warmer summer months. The Group may when the
cycle matures or otherwise opportunistically employ more of their vessels under time
charter contracts as the available rates for time charters improve. The Group may
also enter into time charter contracts with profit sharing arrangements, which the
Company believes will enable them to benefit if the spot market increases above a
base charter rate as calculated either by sharing sub charter profits of the charterer
or by reference to a market index and in accordance with a formula provided in the
applicable charter contract.
The Group currently deploys their two FSOs as floating storage units under service
contracts with North Oil Company, in the offshore services sector.
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) and as adopted by the European Union on December 31, 2017.
All accounting policies have been consistently applied for all periods presented in the
consolidated financial statements, unless disclosed otherwise.
The consolidated financial statements were authorized for issue by the Board of
Directors on March 20, 2018.
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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.
(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 8 – Impairment
Information about assumptions and estimation uncertainties that have a significant
risk of resulting in a material adjustment within the next financial year is included in
the following note:
• Note 8 – Impairment test: key assumptions underlying the recoverable amount
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 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 valuation
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. 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).
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
If the inputs used to measure the fair value of an asset or a liability might be categorized
9
0
1
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, 2017
are consistent with those applied in the preparation of the consolidated financial
statements for the year ended December 31, 2016. 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, 2017:
• Annual Improvements to IFRSs 2014-2016 cycle (amendments to IFRS 12)
• Amendments to IAS 7: Disclosure Initiative
• Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealized
Losses
The adoption of these standards, interpretations and 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. 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.
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) Non-controlling interests (NCI)
NCI are measured at their proportionate share of the acquiree’s identifiable net
assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that
do not result in a loss of control are accounted for as equity transactions.
(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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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.
(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, rather than rights to its assets and obligations
for its liabilities.
Interests 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 other comprehensive income (“OCI”) of equity-accounted
investees, until the date on which significant influence or joint control ceases.
Interests in associates and joint ventures include any 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 from transactions with equity-accounted investees are
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
1
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
eliminated against the underlying asset 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.
(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.
(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.
The Group classifies non-derivative financial assets into the following categories:
financial assets at fair value through profit or loss, loans and receivables, cash and
cash equivalents, held-to-maturity 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 treasury policy. 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.
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.
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
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
1
1
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 OCI 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 liability when its contractual obligations are
discharged, canceled or expire.
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 liabilities comprise loans and borrowings, bank overdrafts,
and trade and other payables.
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.
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, foreign exchange and interest rate risks arising
from 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
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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 OCI and
presented in the hedging reserve in equity.
The amount recognized in OCI 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 profit or loss as the hedged item. Any ineffective portion of changes in
the fair value of the derivative is recognized immediately in profit or loss.
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) Goodwill and 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).
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
After initial recognition goodwill is measured at cost less accumulated impairment
5
1
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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) Intangible assets
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.
(iii) Subsequent expenditure
Subsequent expenditure on intangible assets is capitalized 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 labour;
• 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.
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) vii).
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.
(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. Vessels, property, 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) 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.
(iv) 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.
(v) 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.
(vi) 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. Internally constructed assets are depreciated from the
date that the assets are completed and ready for use.
The estimated useful lives of significant items of property, plant and equipment are
as follows:
• tankers
• FSO/FpSO/FPSO
• plant and equipment
• fixtures and fittings
• other tangible assets
• dry-docking
20 years
25 years
5 - 20 years
5 - 10 years
3 - 20 years
2.5 - 5 years
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Vessels are estimated to have a zero residual value.
7
1
1
Depreciation methods, useful lives and residual values are reviewed at each reporting
date and adjusted if appropriate.
(vii) 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.
Components installed during dry-dock with a useful life of more than 1 year will be
amortized over their estimated useful-life.
(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 to determine 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.
impaired
Objective evidence that financial assets are
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.
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognized by
reclassifying the losses accumulated in the 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
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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 OCI.
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 favourable 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 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 a 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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
1
1
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 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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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.
(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.
The fair value of the amount payable to beneficiaries in respect of “phantom
stock unit” grants, which are settled in cash, is recognized as an expense with a
corresponding increase in liabilities, over the period during which the beneficiaries
become unconditionally entitled to payment. The amount is remeasured at each
reporting date and at settlement based on the fair value of the phantom stock units.
Any changes in the liability are recognized in profit or loss.
(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 aggregated time charter revenues to
determine aggregated pool Time Charter Equivalent revenue (“TCE”). Aggregated
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
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
2
1
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
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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 consolidated statement of profit or loss 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 OCI.
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 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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
2
1
(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 2017, and have not been applied in
preparing these consolidated financial statements:
IFRS 9 Financial instruments, the IASB issued the final version of IFRS 9 Financial
Instruments in July 2014. IFRS 9 is effective for annual periods beginning on or after
1 January 2018, with early adoption permitted. The Group will apply IFRS 9 initially
on 1 January 2018 and will not restate comparative information for prior periods. The
new standard will require the Group to revise its accounting processes and internal
controls related to reporting financial instruments. An analysis indicated that the
initial adoption of IFRS 9 on January 1, 2018 would result in a provision for doubtful
debtors of USD 16k. The adoption of IFRS 9 will not have any other impact on the
classification or measurement of financial assets.
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, IFRIC 13 Customer Loyalty Programmes, IFRIC 15
Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from
Customers and SIC 31 Barter Transactions Involving Advertising Services. IFRS 15
is effective for the annual periods beginning on or after January 1, 2018, with early
adoption permitted. The standard establishes a five-step model that will apply to
revenue earned from a contract with a customer. The standard’s requirements will
also apply to the sale of some non-financial assets that are not part of the entity’s
ordinary activities (e.g., sales of property or plant and equipment). Extensive
disclosures will be required, including disaggregation of total revenue, information
about performance obligations, changes in contract asset and liability account
balances between periods and key judgements and estimates.
The guidance permits two methods of adoption: retrospectively to each prior reporting
period presented (full retrospective method), or the cumulative effect of initially
applying the guidance recognized at the date of initial application (the cumulative
catch-up transition method). The Group will adopt the standard using the cumulative
catch-up transition method. The new standard will be effective for us beginning
January 1, 2018. The Group has undertaken a comprehensive approach to assess the
impact of the guidance on its business by reviewing the current accounting policies
and practices to identify any potential differences that result from applying the new
requirements to the consolidated financial statements. Part of the Group’s revenue
is generated from time charters, where revenue is recognized on an accrual basis
and is recorded over the term of the charter as the service is provided. This new
guidance will not have any impact on this aspect of the Group’s revenue. For spot
charters, we recognize revenue on a discharge-to-discharge basis in determining
the percentage of completion for all voyage charters. After consulting with other
shipping companies on business assumptions, processes, systems and controls the
Group decided to recognize revenue on a load-to-discharge basis as from January
1, 2018. Under this new standard the Group will also capitalize the voyage expenses
incurred between the previous discharge port and the next load port if they qualify as
fulfillment costs under IFRS 15 and if they are expected to be recovered. An analysis
of spot charter revenue from voyages over year-end indicated that the initial adoption
of IFRS 15 on January 1, 2018 will result in a reduction of accrued revenue by USD
4.4 million and the recognition of capitalized fulfillment costs of USD 2.7 million,
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
with a corresponding net reduction of equity. The new standard will also require the
Group to revise its accounting processes and internal controls related to reporting
spot charter revenue and voyage expenses.
IFRS 16 Leases published on January 13, 2016 makes a distinction between a service
contract and a lease based on whether the contract conveys the right to control the
use of an identified asset and introduces a single, on-balance sheet lease accounting
model for lessees. A lessee recognizes a right-of-use asset representing its right to
use the underlying asset and a lease liability representing its obligation to make lease
payments. There are optional exemptions for short term leases and leases of low
value items. Lessor accounting remains similar to the current standard - i.e. lessors
continue to classify leases as finance or operating leases. For lessors, there is little
change to the existing accounting in IAS 17 Leases. IFRS 16 replaces existing leases
guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement
contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the
Substance of Transactions Involving the Legal Form of a Lease. The standard is
effective for annual periods beginning on or after January 1, 2019. Early adoption is
permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at
or before the date of initial application of IFRS 16. The Group will adopt IFRS 16 as of
January 1, 2019. No quantitative or qualitative assessment of the impact of IFRS 16
has been made to date, but the Group expects that the most significant impact will
be that the Group will recognize new assets and liabilities for its operating leases as
lessee (for company cars, office rental and bare boat charters). Reference is also made
to the disclosure on lease payments in Note 19. In addition, the nature and recognition
of expenses related to those leases will change as IFRS 16 replaces the straight-
line operating lease expense with a depreciation charge for right-of-use assets and
interest expense on lease liabilities. The Group does not expect the adoption of IFRS
16 to impact its ability to comply with the loan covenants described in Note 18.
Classification and Measurement of Share-based Payment Transactions
(Amendments to IFRS 2) issued on 20 June 2016 covers three accounting areas:
the measurement of cash-settled share-based payments; the classification of
share-based payments settled net of tax withholdings; and the accounting for a
modification of a share-based payment from cash-settled to equity-settled. The
amendments are effective for annual periods commencing on or after 1 January
2018. As a practical simplification, the amendments can be applied prospectively
so that prior periods do not have to be restated. Retrospective, or early application
is permitted if companies have the required information. The amendments are
not expected to have a material impact on the Group’s consolidated financial
statements.
Transfers of property assets to/from, investment property (Amendments to IAS 40)
issued on 8 December 2016, clarifies that a property asset is transferred to, or from,
investment property when and only when there is an actual change in use. A change
in management intention alone does not support a transfer. The amendments are
effective for annual periods beginning on or after 1 January 2018, with earlier
adoption permitted. The amendments are not expected to have a material impact on
the Group’s consolidated financial statements. These amendments have not yet been
endorsed by the EU.
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)
issued on 12 October 2017, clarifies how companies should account for long-term
interests in an associate or joint venture, to which the equity method is not applied,
using IFRS 9. The amendments are effective for annual periods beginning on or after
1 January 2019, with early adoption permitted. The amendments are not expected
to have a material impact on the Group’s consolidated financial statements. These
amendments have not yet been endorsed by the EU.
IFRIC 22 Foreign currency transactions and Advance consideration issued on 8
December 2016, clarifies the transaction date to be used to determine the exchange
rate for translating foreign currency transactions involving an advance payment
or receipt. The interpretation is effective for annual periods beginning on or after
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
2
1
1 January 2018, with earlier adoption permitted. The amendments are not expected
to have a material impact on the Group’s consolidated financial statements. This
interpretation has not yet been endorsed by the EU.
IFRIC 23 Uncertainty over Income Tax Treatments issued on 7 June 2017, clarifies
how to apply the recognition and measurement requirements in IAS 12 when there
is uncertainty over income tax treatments. In such a circumstance, an entity shall
recognize and measure its current or deferred tax asset or liability applying the
requirements in IAS 12 based on taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits and tax rates determined applying this Interpretation. An entity
is required to assume that a tax authority with the right to examine and challenge
tax treatments will examine those treatments and have full knowledge of all related
information. Detection risk is not considered in the recognition and measurement of
uncertain tax treatments. The entity should measure the impact of the uncertainty
using the method that best predicts the resolution of the uncertainty; either the
most likely amount method or the expected value method. The interpretation
is effective for annual periods beginning on or after 1 January 2019, with earlier
adoption permitted. The amendments are not expected to have a material impact on
the Group’s consolidated financial statements. This interpretation has not yet been
endorsed by the EU.
Annual improvements to IFRSs 2014-2016 Cycle, issued on 8 December 2016,
covers the following minor amendments:
• IFRS 1 First-time Adoption of IFRS: removes outdated exemptions for first-time
adopters of IFRS (effective for annual periods beginning on or after 1 January 2018);
• IFRS 12 Disclosure of Interests in Other Entities: the amendments clarify that the
disclosure requirements for interests in other entities also apply to interests that
are classified as held for sale or distribution (effective for annual periods beginning
on or after 1 January 2017 and adopted by the Group as of 1 January 2017).
• IAS 28 Investments in Associates and Joint Ventures: the amendments clarify
that a venture capital organization, or other qualifying entity, may elect to
measure its investments in an associate or joint venture at fair value through
profit or loss. This election can be made on an investment-by-investment basis.
A non-investment entity investor may elect to retain the fair value accounting
applied by an investment entity associate or investment entity joint venture
to its subsidiaries. This election can be made separately for each investment
entity associate or joint venture. These amendments are effective for annual
periods beginning on or after 1 January 2018, with earlier adoption permitted.
The amendments are not expected to have a material impact on the Group’s
consolidated financial statements.
Annual improvements to IFRSs 2015-2017 Cycle, issued on 12 December 2017,
covers the following minor amendments:
• IFRS 3 Business Combinations: the amendments clarify that a company
remeasures its previously held interest in a joint operation when it obtains
control of the business.
• IFRS 11 Joint Arrangements: the amendments clarify that a company does not
remeasure its previously held interest in a joint operation when it obtains joint
control of the business.
• IAS 12 Income Taxes: the amendments clarify that a company accounts for all
income tax consequences of dividend payments consistently with the transactions
that generated the distributable profits - i.e. in profit or loss, OCI or equity.
• IAS 23 Borrowing Costs: the amendments clarify that a company treats as part
of general borrowings any borrowing originally made to develop an asset when
the asset is ready for its intended use or sale.
The amendments are effective for annual reporting periods beginning on or after 1
January 2019 with earlier application permitted. The amendments are not expected
to have a material impact on the Group’s consolidated financial statements. These
amendments have not yet been endorsed by the EU.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Note 2 - 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 operations
(FSO/FpSO). These two divisions operate in 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 large 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. The Chief Operating Decision Maker (CODM) also receives the
information per segment based on proportionate consolidation for 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 10% of the Tankers
segment total revenue in 2017 (2016: two clients which represented 10% each and
in 2015 one client which represented 11%). All the other clients represent less than
10% of total revenues of the Tankers segment.
The Group did not identify any relevant geographic areas.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of USD)
December 31, 2017
December 31, 2016
Tankers
FSO
Less:
Equity-
accounted
investees
Total
Tankers
FSO
Less:
Equity-
accounted
investees
Total
Assets
Vessels
Assets under construction
Other tangible assets
Intangible assets
Receivables
Investments in equity accounted investees
Deferred tax assets
2,271,500
63,668
1,663
72
163,382
1,695
2,487
168,100
-
-
-
10,739
-
223
(168,100) 2,271,500 2,383,163
86,136
777
156
204,079
1,546
964
63,668
1,663
72
160,352
30,595
2,487
-
-
-
(13,769)
28,900
(223)
186,170
-
-
-
9,414
-
-
(186,170) 2,383,163
86,136
777
156
183,914
18,413
964
-
-
-
(29,579)
16,867
-
Total non-current assets
2,504,467 179,062
(153,192) 2,530,337 2,676,821 195,584
(198,882) 2,673,523
Total current assets
281,132
11,581
(12,077)
280,636
375,037
43,048
(44,697)
373,388
TOTAL ASSETS
2,785,599 190,643
(165,269) 2,810,973 3,051,858 238,632
(243,579) 3,046,911
Equity and liabilities
Total equity
1,820,887
25,473
1 1,846,361 1,892,836
(4,879)
(1) 1,887,956
Bank and other loans
Convertible and other Notes
Other payables
Deferred tax liabilities
Employee benefits
Amounts due to equity-accounted joint
ventures
Provisions
653,730
147,619
539
-
3,984
162,762
-
-
1,680
-
(162,762)
-
-
(1,680)
-
653,730
147,619
539
-
3,984
966,443
-
533
-
2,846
203,512
-
1,118
-
-
(203,512)
-
(1,118)
-
-
-
-
-
-
-
-
-
-
-
38
-
-
-
-
966,443
-
533
-
2,846
-
38
Total non-current liabilities
805,872 164,442
(164,442)
805,872
969,860 204,630
(204,630)
969,860
Total current liabilities
158,840
728
(828)
158,740
189,162
38,881
(38,948)
189,095
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
TOTAL EQUITY AND LIABILITIES
2,785,599 190,643
(165,269) 2,810,973 3,051,858 238,632
(243,579) 3,046,911
7
2
1
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(in thousands of USD)
2017
Shipping income
Revenue
Gains on disposal of vessels/other tangible assets
Other operating income
Tankers
FSO
Less: Equity-
accounted
investees
Total
513,398
36,538
4,902
59,513
-
234
(59,543)
-
(234)
513,368
36,538
4,902
Total shipping income
554,838
59,747
(59,777)
554,808
Operating expenses
Voyage expenses and commissions
Vessel operating expenses
Charter hire expenses
Losses on disposal of vessels/other tangible assets
Loss on disposal of investments in equity accounted investees
Depreciation tangible assets
Depreciation intangible assets
General and administrative expenses
(62,035)
(150,390)
(31,173)
(21,027)
-
(229,777)
(95)
(46,871)
(304)
(9,157)
-
-
-
(18,071)
-
(30)
304
9,120
-
-
-
18,071
-
33
(62,035)
(150,427)
(31,173)
(21,027)
-
(229,777)
(95)
(46,868)
Total operating expenses
(541,368)
(27,562)
27,528
(541,402)
RESULT FROM OPERATING ACTIVITIES
13,470
32,185
(32,249)
13,406
Finance income
Finance expenses
Net finance expenses
7,267
(50,730)
197
(1,026)
(198)
1,027
7,266
(50,729)
(43,463)
(829)
829
(43,463)
Share of profit (loss) of equity accounted investees
(net of income tax)
150
-
29,932
30,082
Profit (loss) before income tax
(29,843)
31,356
(1,488)
Income tax expense
1,358
(1,488)
1,488
Profit (loss) for the period
(28,485)
29,868
Attributable to:
Owners of the company
(28,485)
29,868
-
-
25
1,358
1,383
1,383
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of USD)
2017
Net cash from operating activities
Net cash from (used in) investing activities
Net cash from (used in) financing activities
Capital expenditure
Impairment losses
Impairment losses reversed
Tankers
FSO
Less: Equity-
accounted
investees
211,310
(40,243)
(234,921)
(177,901)
-
-
49,684
-
(78,421)
(49,698)
1
78,367
-
-
-
-
-
-
Total
211,295
(40,242)
(234,976)
(177,901)
-
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
2016
2015
Tankers
FSO
Less: Equity-
accounted
investees
Total
Tankers
FSO
Less: Equity-
accounted
investees
Total
704,766
50,397
6,765
65,125
-
327
(85,626)
-
(96)
684,265
50,397
6,996
898,495
13,302
6,798
64,504
-
808
(116,492)
-
(180)
846,507
13,302
7,426
761,928
65,452
(85,722)
741,658
918,595
65,312
(116,672)
867,235
(63,305)
(164,478)
(17,713)
(1)
(24,150)
(233,368)
(99)
(44,152)
(476)
(9,679)
-
-
-
(18,071)
-
(80)
4,221
13,958
-
(1)
-
23,775
-
181
(59,560)
(160,199)
(17,713)
(2)
(24,150)
(227,664)
(99)
(44,051)
(83,896)
(160,894)
(25,849)
(8,002)
-
(221,399)
(50)
(46,433)
(473)
(10,074)
-
-
-
(18,071)
-
(283)
13,132
17,250
-
-
-
29,314
-
465
(71,237)
(153,718)
(25,849)
(8,002)
-
(210,156)
(50)
(46,251)
(547,266)
(28,306)
42,134
(533,438)
(546,523)
(28,901)
60,161
(515,263)
214,662
37,146
(43,588)
208,220
372,072
36,411
(56,511)
351,972
6,864
(52,420)
57
(2,552)
(66)
3,277
6,855
(51,695)
3,313
(52,590)
22
(3,663)
(23)
5,311
3,312
(50,942)
(45,556)
(2,495)
3,211
(44,840)
(49,277)
(3,641)
5,288
(47,630)
334
-
40,161
40,495
185
-
51,407
51,592
169,440
34,651
(216)
203,875
322,980
32,770
184
355,934
174
(216)
216
174
(5,633)
184
(184)
(5,633)
169,614
34,435
169,614
34,435
-
-
204,049
317,347
32,954
204,049
317,347
32,954
-
-
350,301
350,301
2016
2015
Tankers
FSO
Less: Equity-
accounted
investees
Total
Tankers
FSO
Less: Equity-
accounted
investees
Total
427,926
(90,891)
(264,714)
(342,698)
-
-
49,013
-
(32,929)
(38,737)
(9,724)
36,483
-
-
-
-
-
-
438,202
(100,615)
(261,160)
(342,698)
-
-
505,821
(248,770)
(350,429)
(361,754)
-
-
58,747
-
(20,557)
-
-
-
(114,036)
42,897
5,671
1,611
-
-
450,532
(205,873)
(365,315)
(360,143)
-
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
2
1
Note 3 - 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)
December 31, 2017
December 31, 2016
December 31, 2015
Vessels
Of which in Tankers segment
Of which in FSO segment
-
-
-
-
-
-
24,195
24,195
-
(in thousands of USD)
At January 1, 2015
Assets transferred to assets held for sale
Famenne
Assets sold from assets held for sale
Antarctica
At December 31, 2015
At January 1, 2016
Assets sold from assets held for sale
Famenne
(Estimated)
Sale price
Book
Value
Asset Held
For Sale
(Expected)
Gain
(Expected)
Loss
-
-
89,000
-
38,016
24,195
24,195
13,821
91,065
89,000
(89,000)
2,065
-
-
-
-
24,195
15,886
24,195
-
38,016
24,195
(24,195)
13,821
-
-
-
-
-
-
-
At December 31, 2016
-
-
-
13,821
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
On January 15, 2016, the Company sold the VLCC Famenne (2001 - 298,412 dwt), for
USD 38.4 million. This vessel was accounted for as a non-current asset held for sale
as at December 31, 2015, and had a carrying value of USD 24.2 million as of that date.
The vessel was delivered to its new owner on March 9, 2016. Taking into account the
sales commissions, the gain on the sale of this vessel amounted to USD 13.8 million.
This gain has been recorded upon delivery of the vessel and is therefore reflected in
the consolidated statement of profit or loss for the twelve months ended December
31, 2016.
As per December 31, 2017 and December 31, 2016, the Group had no assets held for
sale.
Discontinued operations
As per December 31, 2017 and December 31, 2016, the Group had no operations that
meet the criteria of a discontinued operation.
Note 4 - Revenue and other operating income
(in thousands of USD)
Pool Revenue
Spot Voyages
Time Charters
Total revenue
Other operating income
Note
-
-
19
-
2017
249,303
145,360
118,705
513,368
4,902
2016
340,217
203,821
140,227
684,265
6,996
2015
455,617
264,799
126,091
846,507
7,426
For the accounting treatment of revenue, we refer to the accounting policies (o) -
Revenue.
The decrease in revenue is mostly related to the decrease in pool and spot voyage
revenue which is due to lower freight market conditions.
Other operating income includes revenues related to the daily standard business
operation of the fleet and that are not directly attributable to an individual voyage,
such as insurance rebates received based on changes in our vessels' trading patterns.
Note 5 - Expenses for shipping activities and other expenses from operating activities
VOYAGE EXPENSES AND COMMISSIONS
(in thousands of USD)
Voyage related expense
Commissions paid
Total voyage expenses and commissions
Note
-
-
2017
(57,140)
(4,895)
(62,035)
2016
(52,836)
(6,724)
(59,560)
2015
(62,787)
(8,450)
(71,237)
The majority of voyage expenses are bunkers, port costs and agent fees paid to
operate the vessels on the spot market. These expenses increased in 2017 compared
to 2016 because a lower proportion of vessels were on time charter contract in
2017 and because bunker costs per ton increased. For vessels under a time charter
contract, voyage expenses are paid by the charterer and for vessels operated on the
spot market, voyage expenses are paid by the ship owner.
VESSEL OPERATING EXPENSES
(in thousands of USD)
Operating expenses
Insurance
Note
-
-
2017
(139,832)
(10,595)
2016
(148,554)
(11,645)
2015
(142,035)
(11,683)
Total vessel operating expenses
(150,427)
(160,199)
(153,718)
The operating expenses relate mainly to the crewing, technical and other costs to
operate tankers. In 2017 these expenses were lower compared to 2016 because
technical operating expenses were lower thanks to cost optimization strategies
applied in 2017.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
3
1
CHARTER HIRE EXPENSES
(in thousands of USD)
Charter hire
Bare boat hire
Total charter hire expenses
Note
19
19
2017
(62)
(31,111)
(31,173)
2016
(16,921)
(792)
(17,713)
2015
(25,849)
-
(25,849)
The decrease in charter hire is mainly due to the redelivery of the two chartered-
in vessels, the VLCC KHK Vision and the Suezmax Suez Hans, to their owners on
October 27, 2016 and November 27, 2016 respectively.
The increase in bareboat charter-hire expenses in 2017 is entirely attributable to
the sale and leaseback agreement of four VLCCs (Nautilus, Navarin, Neptun and
Nucleus), under a five year bareboat contract agreed on December 16, 2016.
GENERAL AND ADMINISTRATIVE EXPENSES
(in thousands of USD)
Note
Wages and salaries
Social security costs
Provision for employee benefits
Equity-settled share-based payments
Other employee benefits
Employee benefits
Administrative expenses
Tonnage Tax
Claims
Provisions
Total general and administrative expenses
Average number of full time equivalents
(shore staff)
-
-
16
22
-
-
-
-
-
2017
(12,853)
(2,511)
(827)
(313)
(3,148)
(19,652)
(22,579)
(4,772)
(25)
160
(46,868)
2016
(12,754)
(2,532)
(261)
(406)
(3,178)
(19,131)
(21,264)
(4,246)
(13)
603
(44,051)
2015
(12,554)
(2,379)
(108)
(1,637)
(3,715)
(20,392)
(21,389)
(4,360)
(19)
(91)
(46,251)
150.49
139.44
132.20
The general and administrative expenses which include amongst others: shore
staff wages, director fees, office rental, consulting and audit fees and Tonnage Tax,
increased in 2017 compared to 2016. This increase was mainly due to an increase in
provisions for employee benefits, and to higher administrative expenses.
The administrative expenses increased in 2017 compared to 2016 due to the
signing and usage by Tankers International Ltd. of a senior secured uncommitted
on-demand line of credit to fund the working capital in the ordinary course of TI
Pool's business of operating a pool of tankers vessels, including but not limited to
the purchase of bunker fuel, the payment of expenses relating to specific voyages
and supplies of pool vessels, commissions payable on fixtures, port costs, expenses
for hull and propeller cleaning, canal costs, insurance costs for the account of the
pool, and insurance and fees payable for towage of vessels. The TI Pool's financing
expenses are part of the Pool administrative expenses which are borne by the Pool
participants, including Euronav.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Note 6 - Net finance expense
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
Amortization other Notes
Other financial charges
Foreign exchange losses
Finance expense
Net finance expense recognized in profit or loss
2017
655
6,611
7,266
(38,391)
-
(5,819)
(6,519)
(50,729)
(43,463)
Interest expense on financial liabilities measured at amortized cost decreased
during the year ended December 31, 2017, compared to 2016. This decrease was
primarily attributable to the fact that the increase in floating interest rates in 2017
was more than offset by a decrease in average outstanding debt during the year
ended December 31, 2017, compared to 2016. Other financial charges increased in
2017 compared to 2016, which was primarily attributable to commitment fees paid
for available credit lines, of which the total availability increased in 2017.
The above finance income and expenses include the following in respect of assets
(liabilities) not at fair value through profit or loss:
(in thousands of USD)
Total interest income on financial assets
Total interest expense on financial liabilities
Total other financial charges
Recognized directly in equity
Foreign currency translation differences for foreign
operations
Net finance expense recognized directly in equity
Attributable to:
Owners of the Company
Net finance expense recognized directly in equity
Recognized in:
Translation reserve
2017
655
(38,391)
(5,819)
448
448
448
448
448
2016
217
6,638
6,855
(39,007)
-
(4,577)
(8,111)
(51,695)
(44,840)
2016
217
(39,007)
(4,577)
170
170
170
170
170
2015
208
3,104
3,312
(38,246)
(4,127)
(4,355)
(4,214)
(50,942)
(47,630)
2015
208
(42,373)
(4,355)
(429)
(429)
(429)
(429)
(429)
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
3
1
Note 7 - 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
2017
2016
2015
(85)
(85)
1,473
(30)
1,443
1,358
2017
25
60
60
220
(106)
114
174
2016
(98)
(98)
(5,450)
(85)
(5,535)
(5,633)
2015
203,875
355,934
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
(33.99)%
(8)
(33.99)%
(69,297)
(33.99)% (120,982)
499
10
—
7,146
(710)
(13,918)
10,175
(1,836)
(8,090)
70
—
1,118
(1,718)
64,637
13,761
(307)
(144)
17
(4,811)
15,668
(5,225)
91,334
17,536
974
Total taxes
5,430.01%
1,358
0.09%
174
(1.58)%
(5,633)
* DTA = Deferred Tax Asset
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. The amount paid for tonnage tax in the year ended December 31, 2017 was
USD 4.8 million (see Note 5).
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Note 8 - Property, plant and equipment
(in thousands of USD)
Note
Vessels
Vessels under
construction
Other tangible
assets
Prepayments
Total PPE
2,997
(1,771)
16,601
-
3,362,205
(1,086,044)
1,226
16,601
2,276,161
288
(3)
(428)
-
-
(35)
8,001
(8,000)
-
-
(16,600)
-
2,288,036
93,890
1,048
Net carrying amount
2,288,036
93,890
At January 1, 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 December 31, 2015
At January 1, 2016
Cost
Depreciation & impairment losses
-
-
-
-
-
-
-
-
-
-
Acquisitions
Acquisitions through business
combinations
Disposals and cancellations
Depreciation charges
Transfer to assets held for sale
Transfers
Translation differences
Balance at December 31, 2016
At January 1, 2017
Cost
Depreciation & impairment losses
Net carrying amount
Acquisitions
Acquisitions through business
combinations
Disposals and cancellations
Depreciation charges
Transfer to assets held for sale
Transfers
Translation differences
Balance at December 31, 2017
At December 31, 2017
Cost
Depreciation & impairment losses
-
24
-
-
-
-
-
-
-
-
24
-
-
-
-
-
-
-
3,342,607
(1,084,273)
2,258,334
257,706
(10,681)
(209,728)
(24,195)
16,600
-
-
-
-
93,890
-
-
-
-
-
3,477,605
(1,189,569)
93,890
-
250,912
120,280
(143,457)
(227,306)
-
94,698
-
86,944
-
-
-
-
(94,698)
-
2,383,163
86,136
2,383,163
86,136
125,486
51,201
-
(81,389)
(229,429)
-
73,669
-
-
-
-
-
(73,669)
-
2,271,500
63,668
3,595,692
(1,324,192)
63,668
-
Net carrying amount
2,271,500
63,668
On January 12 and January 20, 2017, Euronav took delivery of the VLCCs Ardeche
(2017 - 298,642 dwt) and the VLCC Aquitaine (2017 - 298,767 dwt).
2,482
(1,434)
1,048
175
-
(7)
(358)
-
5
(86)
777
777
1,203
-
(9)
(348)
-
-
40
1,663
3,545
(1,882)
1,663
3,748,135
(1,364,972)
86,136
-
2,373
(1,596)
2
2
-
2
3
-
-
-
-
(5)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
359,885
(18,684)
(210,156)
(24,195)
-
(35)
2,382,976
3,573,979
(1,191,003)
2,382,976
338,034
120,280
(143,464)
(227,664)
-
-
(86)
2,470,076
3,836,644
(1,366,568)
2,470,076
177,890
-
(81,398)
(229,777)
-
-
40
2,336,831
3,662,905
(1,326,074)
2,336,831
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
3
1
In 2017, the Cap Lara, Captain Michael, Alsace, Iris, Navarin, Simone, Ilma, Nucleus,
Neptun, Sonia, Filikon, TI Europe and Nectar have been dry-docked. The cost of
planned repairs and maintenance is capitalized and included under the heading
acquisitions and is depreciated over their estimated useful life (2.5-5 years).
DISPOSAL OF ASSETS – GAINS/LOSSES
(in thousands of USD)
Note Acquisitions
Sale price
Book Value
Gain
Antarctica - Sale
Cap Laurent - Sale
Other
At December 31, 2015
Famenne - Sale
Nautilus - Sale
Navarin - Sale
Neptun - Sale
Nucleus - Sale
Other
At December 31, 2016
TI Topaz - Sale
Flandre - Sale
Cap Georges - Sale
Artois - Sale
Other
At December 31, 2017
3
-
-
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
91,065
21,825
-
38,016
43,250
47,250
47,250
47,250
-
20,790
45,000
9,310
21,780
28
89,000
10,682
-
24,195
32,208
36,739
37,534
36,974
-
41,817
24,693
801
14,077
8
Deferred
Gain
-
-
-
-
-
(500)
(1,500)
(1,500)
(1,500)
-
2,065
11,143
94
13,302
13,821
11,042
10,511
9,716
10,276
31
Loss
-
-
(8,002)
(8,002)
-
-
-
-
-
(2)
(2)
55,397
(5,000)
-
20,307
8,509
7,703
20
36,538
-
-
-
-
-
-
(21,027)
-
-
-
-
(21,027)
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
On May 23, 2017, the Company sold the VLCC TI Topaz (2002 - 319,430 dwt), for a
net sales price of USD 20.8 million. The loss on that sale of USD 21.0 million was
recorded upon delivery of the vessel to its new owner in the second quarter of 2017.
On November 10, 2017, the Company sold the VLCC Flandre (2004 - 305,688 dwt) for
USD 45.0 million to a global supplier and operator of offshore floating platforms. The
Company recorded a gain of USD 20.3 million on the sale which was recorded upon
delivery to its new owner on December 20, 2017.
On November 16, 2017, the Company sold the Suezmax Cap Georges (1998 - 146,652
dwt) for USD 9.3 million. The Company recorded a gain of USD 8.5 million on the sale
upon delivery to its new owner on November 29, 2017.
On November 17, 2017, the Company sold the VLCC Artois (2001 - 298,330 dwt) for
USD 21.8 million. The Artois was the oldest vessel in the Company’s VLCC fleet. The
Company recorded a gain of USD 7.7 million on the sale upon delivery to its new
owner on December 4, 2017.
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.
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:
• 10 year historical average spot freight rates are used as forecast charter rates
• Weighted Average Cost of Capital ('WACC') of 9.70% (2016: 6.43% and 2015:
6.01%)
• 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. In particular, the years 2008-2017 were retained in the trailing 10-year
historical average spot rates on the tanker segment and include year 2008, which
was an exceptional high year in terms of TCE achieved by both the VLCC and Suezmax
fleets.
The increase in WACC in 2017 compared to 2016 is mainly related to the higher cost
of equity due to a higher Beta and higher market risk. The impairment test did not
result in a requirement to record an impairment loss in 2017. With an increase of the
WACC of 300bps to 12.70%, the analysis would indicate an impairment loss in 2017
of USD 9.2 million.
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 10-year historical average rates calculated
as of the reporting date to be reasonable as historically it is an appropriate reflection
of a typical shipping cycle despite the fact that the standard deviation of the 10-year
average has increased in 2017 compared to 2016. When using 5-year historical
charter rates in this impairment analysis, the impairment analysis indicates that an
impairment of USD 5.7 million is required for the tanker fleet (2016: no impairment
and 2015: USD 123.3 million), and when using 1-year historical charter rates in this
impairment analysis, the impairment analysis indicates that an impairment is required
for the tanker fleet of USD 427.3 million (2016 and 2015: no impairment).
FSO
In the context of the valuation of the Group's investments in the respective joint
ventures, the Group also performed an impairment test on the FSO vessels owned by
TI Asia Ltd. and TI Africa Ltd. 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 9.70% (2016: 6.43% and 2015:
6.01%)
• 25 year useful life with residual value equal to zero
This assessment did not result in a requirement to record an impairment loss in
2017. Even with an increase of the WACC of 300bps, there was no need to record
an impairment loss in 2017. 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 unfixed
periods. The FSO Asia and the FSO Africa were on a timecharter contract to Maersk
Oil Qatar until July 22, 2017 and September 22, 2017, respectively. On May 14, 2017,
the joint ventures between the Group and International Seaways, signed a contract
for five years for the FSO Africa and FSO Asia in direct continuation of the current
contractual service. The contract was signed with North Oil Company, the new
operator of the Al-Shaheen oil field, whose shareholders are Qatar Petroleum Oil &
gas Limited and Total E&P Golfe Limited.
Security
All tankers financed are subject to a mortgage to secure bank loans (see Note 15).
Vessels on order or under construction
The group has 4 vessels under construction as at December 31, 2017 for an aggregate
amount of USD 63.7 million (2016: USD 86.1 million and 2015: USD 93.9 million).
The amounts presented within "Vessels under construction" relate to four Ice Class
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
3
1
Suezmax vessels from Hyundai Heavy Industries of which the first two vessels will be
delivered in the first half of 2018 and the other two vessels in the second half of 2018.
Capital commitment
As at December 31, 2017 the Group's total capital commitment amounts to USD
185.9 million (2016: USD 208.8 million). These can be detailed as follows:
As at December 31, 2016 payments scheduled for
(in thousands of USD)
Commitments in respect of VLCCs
Commitments in respect of Suezmaxes
Commitments in respect of FSOs
Total
97,035
111,793
-
2017
97,035
24,843
-
TOTAL
208,828
121,878
2018
-
86,950
-
86,950
2019
-
-
-
-
As at December 31, 2017 payments scheduled for
Commitments in respect of VLCCs
Commitments in respect of Suezmaxes
Commitments in respect of FSOs
Total
-
185,922
-
-
185,922
-
TOTAL
185,922
185,922
2018
2019
2020
-
-
-
-
-
-
-
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
At December 31, 2016, Euronav held the option to purchase an additional two Ice
Class Suezmax vessels from Hyundai Heavy Industries. Euronav exercised this
option in the second quarter of 2017 which brings the number to four ordered Ice
Class Suezmax vessels.
Note 9 - 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)
Provisions
Employee benefits
Unused tax losses & tax credits
Offset
Balance at December 31, 2016
Provisions
Employee benefits
Unused tax losses & tax credits
Offset
Balance at December 31, 2017
ASSETS
LIABILITIES
31
37
896
964
-
964
1
44
2,442
2,487
-
2,487
-
-
-
-
-
-
-
-
-
-
-
-
NET
31
37
896
964
1
44
2,442
2,487
UNRECOGNIZED DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities have not been recognized in respect of the following items:
December 31, 2017
December 31, 2016
(in thousands of USD)
ASSETS
LIABILITIES
ASSETS
LIABILITIES
Deductible temporary differences
Taxable temporary differences
Tax losses & tax credits
Offset
Total
357
7
89,528
89,892
(14,231)
75,661
-
(14,231)
-
(14,231)
14,231
-
280
7
105,731
106,018
(25,213)
80,805
-
(25,213)
-
(25,213)
25,213
-
The unrecognized deferred tax assets in respect of tax losses and tax credits are
related to tax losses carried forward, investment deduction allowances and excess
dividend received deduction. 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
primarily 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 tax liability will be incurred and management is satisfied
that the tax liability will not be incurred in the foreseeable future. In addition, no
deferred tax liabilities have been recognized for temporary differences related to
vessels for which the Group expects that the reversal of these differences will not
have a tax effect.
In December 2017, changes to the Belgian corporate income tax rate were enacted,
lowering the rate to 29.58% as from 2018 and to 25% from 2020. These changes have
been reflected in the calculation of the amounts of deferred tax assets and liabilities
in respect of Belgian Group entities as at December 31, 2017.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
3
1
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
Provisions
Employee benefits
Unused tax losses & tax credits
Total
Balance at
Jan 1, 2015
Recognized
in income
Recognized
in equity
Translation
differences
Balance at
Dec 31, 2015
238
52
6,246
6,536
(61)
(24)
(5,450)
(5,535)
-
-
-
-
(8)
(5)
(53)
(66)
169
23
743
935
Balance at
Jan 1, 2016
Recognized
in income
Recognized
in equity
Translation
differences
Balance at
Dec 31, 2016
169
23
743
935
(121)
15
220
114
-
-
-
-
(17)
(1)
(67)
(85)
31
37
896
964
Balance at
Jan 1, 2017
Recognized
in income
Recognized
in equity
Translation
differences
Balance at
Dec 31, 2017
31
37
896
964
(32)
2
1,473
1,443
-
-
-
-
2
5
73
80
1
44
2,442
2,487
Note 10 - Non-current receivables
(in thousands of USD)
December 31, 2017
December 31, 2016
Shareholders loans to joint ventures
Other non-current receivables
Investment
Total non-current receivables
159,733
618
1
160,352
183,348
565
1
183,914
The shareholders loans to joint ventures as of December 31, 2017 and December 31,
2016 did not bear interest.
Please refer to Note 25 for more information on the shareholders loans to joint
ventures.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
The maturity date of the non-current receivables is as follows:
(in thousands of USD)
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
Note 11 - Trade and other receivables - current
(in thousands of USD)
Trade receivables
Accrued income
Accrued interest
Deferred charges
Other receivables
December 31, 2017
December 31, 2016
-
-
-
-
-
160,352
160,352
-
-
-
-
-
183,914
183,914
December 31, 2017
December 31, 2016
32,758
12,465
52
24,797
66,725
38,695
10,966
33
21,149
95,499
Total trade and other receivables
136,797
166,342
The decrease in other receivables relates to income to be received by the Group from
the Tankers International Pool. These amounts decreased in 2017 due to overall
declining freight market conditions.
For currency and credit risk, we refer to Note 18.
Note 12 - 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, 2017
December 31, 2016
102,200
41,448
143,648
115
-
143,648
104,500
102,189
206,689
146
-
206,689
The bank deposits as at December 31, 2017 had an average maturity of 16 days (2016:
10 days).
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
4
1
Note 13 - Equity
NUMBER OF SHARES ISSUED
(in shares)
December 31, 2017
December 31, 2016
December 31, 2015
On issue at 1 January
Conversion perpetual convertible preferred equity
Capital increases
159,208,949
-
-
159,208,949
-
-
131,050,666
9,459,283
18,699,000
On issue at 31 December - fully paid
159,208,949
159,208,949
159,208,949
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, 2017 and December 31, 2016 the share capital is represented by
159,208,949 shares. The shares have no par value.
At December 31, 2017, the authorized share capital not issued amounts to USD
150,000,000 (2016 and 2015: USD 150,000,000) or the equivalent of 138,005,652
shares (2016 and 2015: 138,005,652 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 ('PCPs')
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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Treasury shares
As of December 31, 2017 Euronav owned 1,042,415 of its own shares, compared to
1,042,415 of shares owned on December 31, 2016. In the twelve months period ended
December 31, 2017, Euronav did not buy back or dispose of any own shares.
Dividends
On May 11, 2017, the Annual Shareholders' meeting approved a full year dividend of
USD 0.77 per share. Taking into account the interim dividend approved in August 2016
in the amount of USD 0.55 per share, the dividend paid after the AGM was USD 0.22
per share. The dividend to holders of Euronav shares trading on Euronext Brussels
was paid in EUR at the USD/EUR exchange rate of the record date. During its meeting
of August 9, 2017, the Board of Directors of Euronav approved an interim dividend
for the first semester 2017 of USD 0.06 per share. The interim dividend of USD 0.06
per share was payable as from October 5, 2017. The interim dividend to holders of
Euronext shares was paid in EUR at the USD/EUR exchange rate of the record date.
On March 20, 2018, the Board of Directors decided to propose to the Annual
Shareholders' meeting to be held on May 9, 2018, to approve a full year dividend
of USD 0.12 per share. Taking into account the interim dividend approved in August
in the amount of USD 0.06 per share, the expected dividend payable after the AGM
should be USD 0.06 per share.
The total amount of dividends paid in 2017 was USD 44.1 million.
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 March 2016, the holders exercised 166,667 options and a
corresponding number of treasury shares were sold. The key terms and conditions
did not change after December 31, 2013. The compensation expense related to this
share option program was recognized in prior periods and therefore, this program
did not have any impact on the consolidated statement of profit or loss for 2017.
Long term incentive plan 2015
The Group's Board of Directors 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, 2017. 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 2017 with respect to the LTIP 2015 was USD 0.3 million.
Long term incentive plan 2016
The Group's Board of Directors implemented in 2016 an additional long term incentive
plan for key management personnel. Under the terms of this LTIP, key management
personnel is eligible to receive phantom stock unit grants. Each phantom stock unit
grants the holder a conditional right to receive an amount of cash equal to the fair
market value of one share of the company on the settlement date. The phantom stock
units will mature one-third each year on the second, third and fourth anniversary of
the award. In total a number of 54,616 phantom stocks were granted on February 2,
2016 and all remain outstanding as of December 31, 2017. The LTIP 2016 qualifies as
a cash-settled share-based payment transaction. The Company recognizes a liability
in respect of its obligations under the LTIP 2016, measured based on the Company’s
share price at the reporting date, and taking into account the extent to which the
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
4
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
services have been rendered to date. The compensation expense recognized in the
consolidated statement of profit or loss during 2017 was USD 0.4 million.
Long term incentive plan 2017
The Group's Board of Directors implemented in 2017 an additional long term
incentive plan for key management personnel. Under the terms of this LTIP, key
management personnel are eligible to receive phantom stock unit grants. Each
phantom stock unit grants the holder a conditional right to receive an amount of
cash equal to the fair market value of one share of the company on the settlement
date. The phantom stock units will mature one-third each year on the second,
third and fourth anniversary of the award. In total a number of 66,449 phantom
stock units were granted on February 9, 2017 and all remain outstanding as of
December 31, 2017. The LTIP 2017 qualifies as a cash-settled share-based payment
transaction. The Company recognizes a liability in respect of its obligations under
the LTIP 2017, measured based on the Company’s share price at the reporting date,
and taking into account the extent to which the services have been rendered to
date. The compensation expense recognized in the consolidated statement of profit
or loss during 2017 was USD 0.3 million.
Note 14 - Earnings per share
Basic earnings per share
The calculation of basic earnings per share at December 31, 2017 was based on a
result attributable to ordinary shares of USD 1,382,530 (December 31, 2016: USD
204,049,212 and December 31, 2015: USD 350,300,535) and a weighted average
number of ordinary shares outstanding during the period ended December 31, 2017 of
158,166,534 (December 31, 2016: 158,262,268 and December 31, 2015: 155,872,171),
calculated as follows:
RESULT ATTRIBUTABLE TO ORDINARY SHARES
(in thousands of USD except share and per share information)
2017
2016
2015
Result for the period
Weighted average number of ordinary shares
Basic earnings per share (in USD)
1,383
158,166,534
0.01
204,049
158,262,268
1.29
350,301
155,872,171
2.25
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
(in shares)
Shares
issued
Treasury
shares
Shares
outstanding
Weighted
number of
shares
On issue at January 1, 2015
131,050,666
1,750,000
129,300,666
129,300,666
Issuance of shares
Purchases of treasury shares
Withdrawal of treasury shares
Sales of treasury shares
28,158,283
-
-
-
-
-
-
(1,283,333)
28,158,283
-
-
1,283,333
25,842,099
-
-
729,406
On issue at December 31, 2015
159,208,949
466,667
158,742,282
155,872,171
On issue at January 1, 2016
159,208,949
466,667
158,742,282
158,742,282
Issuance of shares
Purchases of treasury shares
Withdrawal of treasury shares
Sales of treasury shares
-
-
-
-
-
692,415
-
(116,667)
-
(692,415)
-
116,667
-
(575,005)
-
94,991
On issue at December 31, 2016
159,208,949
1,042,415
158,166,534
158,262,268
On issue at January 1, 2017
159,208,949
1,042,415
158,166,534
158,166,534
Issuance of shares
Purchases of treasury shares
Withdrawal of treasury shares
Sales of treasury shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
On issue at December 31, 2017
159,208,949
1,042,415
158,166,534
158,166,534
Diluted earnings per share
For the twelve months ended December 31, 2017, the diluted earnings per share
(in USD) amount to 0.01 (2016: 1.29 and 2015: 2.22). At December 31, 2017 and
December 31, 2016, 236,590 options issued under the LTIP 2015 were excluded from
the calculation of the diluted weighted average number of shares because their
effect would have been anti-dilutive.
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)
2017
2016
2015
Weighted average of ordinary shares outstanding
(basic)
158,166,534
158,262,268
155,872,171
Effect of potential conversion of convertible Notes
Effect of potential conversion of PCPs
Effect of share-based payment arrangements
Weighted average number of ordinary shares
(diluted)
-
-
130,523
-
-
166,789
88,689
932,971
635,731
158,297,057
158,429,057
157,529,562
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
4
1
After the conversions of the convertible Notes and the PCPs in the course of 2015,
there are no more remaining outstanding instruments at December 31, 2017 and
December 31, 2016 which can give rise to dilution, except for the share-based
payment arrangements.
Note 15 - Interest-bearing loans and borrowings
(in thousands of USD)
Note
Bank loans
Convertible and
other Notes
More than 5 years
Between 1 and 5 years
More than 1 year
Less than 1 year
At January 1, 2016
New loans
Scheduled repayments
Early repayments
Acquisitions through business combinations
Other changes
Balance at December 31, 2016
More than 5 years
Between 1 and 5 years
More than 1 year
Less than 1 year
Balance at December 31, 2016
More than 5 years
Between 1 and 5 years
More than 1 year
Less than 1 year
At January 1, 2017
New loans
Scheduled repayments
Early repayments
Other changes
Balance at December 31, 2017
More than 5 years
Between 1 and 5 years
More than 1 year
Less than 1 year
Balance at December 31, 2017
-
-
-
-
-
-
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
147,174
805,252
952,426
100,022
1,052,448
740,286
(60,015)
(714,000)
61,065
5,778
1,085,562
330,491
635,952
966,443
119,119
1,085,562
330,491
635,952
966,443
119,119
1,085,562
326,014
(43,743)
(667,250)
508
701,091
157,180
496,550
653,730
47,361
701,091
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
-
-
(2,381)
147,619
-
147,619
147,619
-
147,619
Total
147,174
805,252
952,426
100,022
1,052,448
740,286
(60,015)
(714,000)
61,065
5,778
1,085,562
330,491
635,952
966,443
119,119
1,085,562
330,491
635,952
966,443
119,119
1,085,562
476,014
(43,743)
(667,250)
(1,873)
848,710
157,180
644,169
801,349
47,361
848,710
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
The amounts shown under "New Loans" and "Early Repayments" include drawdowns
and repayments under revolving credit facilities during the year.
Bank Loans
On March 25, 2014, the Group entered into a USD 500.0 million senior secured credit
facility. This facility bore interest at LIBOR plus a margin of 2.75% per annum and
was repayable over a term of six years with maturity in 2020 and was secured by
the fifteen (15) Very Large Crude Carriers (VLCC) that the Group purchased from
Maersk Tankers Singapore Pte Ltd. ('the Maersk Acquisition Vessels'). The proceeds
of the facility were drawn and used to partially finance the purchase price of the
Maersk Acquisition Vessels. This USD 500.0 million loan facility was repaid in full
on December 21, 2016 using a portion of the borrowing under the USD 409.5 million
senior secured amortizing revolving credit facility entered into on December 16, 2016.
On October 13, 2014, the Group entered into a USD 340.0 million senior secured
credit facility with a syndicate of banks. Borrowings under this facility have been
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 7 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 Hojo, Hakone, Hirado and Hakata. On October
22, 2014 a first drawdown under this facility was made to repay a former 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, 2017 and
December 31, 2016, the outstanding balances on this facility were USD 111.7 million
and USD 207.3 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. The facility is 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, 2017 and December 31, 2016, the outstanding balances
under this facility were USD 330.0 million and USD 612.1 million, respectively.
On November 9, 2015, the Group entered into a USD 60.0 million unsecured revolving
credit facility. As of December 31, 2017 and December 31, 2016, there were no
outstanding balances under this facility.
On June 2, 2016, the Group entered into a share swap and claim transfer agreement
(see Note 24) whereby as of that date, Fiorano Shipholding Ltd. and Larvotto
Shipholding Ltd. were fully consolidated and all assets acquired and liabilities
assumed were recognized. Their respective loans are related to, and are secured
by, the vessels owned by Fiorano and Larvotto at the date of the aforementioned
transaction. As of December 31, 2017 and December 31, 2016, the outstanding
balances on these facilities were USD 48.7 million and USD 57.0 million, respectively.
On December 16, 2016, the Group entered into a USD 409.5 million senior secured
amortizing revolving credit facility for the purpose of refinancing 11 vessels as well as
Euronav’s general corporate purposes. The credit facility was used to refinance the
USD 500 million senior secured credit facility dated March 25, 2014 and will mature
on January 31, 2023 carrying a rate of LIBOR plus a margin of 2.25%. As of December
31, 2017 and December 31, 2016, the outstanding balances on this facility were USD
118.0 million and USD 222.0 million, respectively. The credit facility is secured by the
aforementioned 11 vessels.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
4
1
On January 30, 2017, the Group signed a loan agreement for a nominal amount of
USD 110.0 million with the purpose of financing the Ardeche and the Aquitaine, as
mentioned in Note 8. On April 25, 2017, following a successful syndication, the loan
was replaced with a new Korean Export Credit facility for a nominal amount of USD
108.5 million with Korea Trade Insurance Corporation or “K-sure” as insurer. The
new facility is comprised of (i) a USD 27.1 million commercial tranche, which bears
interest at LIBOR plus a margin of 1.95% per annum and (ii) a USD 81.4 million
tranche insured by K-sure which bears interest at LIBOR plus a margin of 1.50%
per annum. The facility is repayable over a term of 12 years, in 24 installments at
successive six month intervals, each in the amount of USD 3.6 million together with a
balloon installment of USD 21.7 million payable with the 24th installment on January
12, 2029. The K-sure insurance premium and other related transaction costs for a
total amount of USD 3.2 million are amortized over the lifetime of the instrument
using the effective interest rate method. As of December 31, 2017 the outstanding
balance on this facility was USD 104.9 million in aggregate. This facility is secured by
the VLCCs the Ardeche and the Aquitaine.
The facility agreement contains a provision that entitles the lenders to require us to
prepay to the lenders, on January 12, 2024, with 180 days’ notice, their respective
portion of any advances granted to us under the facility. The facility agreement
also contains provisions that allow the remaining lenders to assume an outgoing
lender’s respective portion(s) of the advances made to us or to allow us to suggest a
replacement lender to assume the respective portion of such advances.
Undrawn borrowing facilities
At December 31, 2017, Euronav and its fully-owned subsidiaries have undrawn credit
line facilities amounting to USD 607.4 million committed for at least one year (2016:
USD 355.8 million).
Terms and debt repayment schedule
The terms and conditions of outstanding loans were as follows:
(in thousands of USD)
December 31, 2017
December 31, 2016
Curr.
USD
USD
USD
USD
USD
USD
USD
USD
USD
Nominal
interest
rate
libor
+2.25%
libor
+2.25%
libor
+1.95%
libor
+2.25%
libor
+1.95%
libor
+1.5%
libor
+1.95%
libor
+1.50%
libor
+2.25%
Year of
mat.
Facility
size
Drawn
Carrying
value
Facility
size
Drawn
Carrying
value
2021
111,666
111,666
110,156
143,571
143,571
141,501
2021
147,559
-
-
147,559
63,700
63,700
2022
485,017
330,000
325,519
636,536
612,050
605,806
2023
362,780
118,000
114,634
409,500
222,036
217,600
2020
23,563
23,563
23,563
27,813
27,813
27,813
2020
25,173
25,173
25,173
29,143
29,143
29,143
2029
26,911
26,911
24,876
2029
78,020
78,020
77,171
-
-
2020
60,000
-
-
60,000
-
-
-
-
-
-
1,320,688
713,332
701,091 1,454,121
1,098,312
1,085,562
Secured vessels loan 192M
Secured vessels Revolving
loan 148M*
Secured vessels Revolving
loan 750M*
Secured vessels Revolving
loan 409.5M*
Secured vessels loan 76M
Secured vessels loan 67.5M
Secured vessels loan 27.1M
Secured vessels loan 81.4M
Unsecured bank facility 60M
Total interest-bearing bank
loans
* The total amount available under the revolving
loan Facilities depends on the total value of the
fleet of tankers securing the facility.
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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Other notes
(in thousands of USD)
December 31, 2017
December 31, 2016
Curr.
Nominal
interest
rate
Year of
mat.
Facility
size
Drawn
Carrying
value
Facility
size
Drawn
Carrying
value
Unsecured notes
USD
7.50%
2022
150,000
150,000
147,619
Total other notes
150,000
150,000
147,619
-
-
-
-
-
-
On May 31, 2017, the Group successfully completed a new senior unsecured
bond issue of USD 150.0 million with a fixed coupon of 7.50% and maturity in
May 2022. The net proceeds from the bond issue are being used for general
corporate purposes. The related transaction costs for a total of USD 2.7 million
are amortized over the lifetime of the instrument using the effective interest rate
method. Since October 23, 2017, these unsecured bonds are listed on the Oslo
stock exchange.
Other borrowings
On June 6, 2017, the Group signed an agreement with BNP to act as dealer for a
Treasury Notes Program with a maximum outstanding amount of 50 million Euro.
The Treasury Notes are issued on an as needed basis with different durations not
exceeding 1 year, and initial pricing is set to 60 bps over Euribor. The company
enters into FX forward contracts to manage the transaction risks related to these
instruments issued in Euro compared to the USD Group currency. The FX contracts
have a same nominal amount and duration as the issued Treasury Notes and they
are measured at fair value with changes in fair value recognized in the consolidated
statement of profit or loss. On December 31, 2017, the fair value of these forward
contracts amounted to USD 0.5 million.
Transaction and other financial costs
The heading 'Other changes' in the first table of this footnote reflects the recognition
of directly attributable transaction costs as a deduction from the fair value of the
corresponding liability, and the subsequent amortization of such costs. In 2017,
the Group recognized USD 4.0 million of amortization of financing costs. The Group
recognized USD 3.2 million of directly attributable transaction costs as a deduction
from the fair value of the USD 110.0 million senior secured amortizing loan facility
concluded on January 30, 2017 and USD 2.7 million of directly attributable transaction
costs as a deduction from the fair value of the USD 150.0 million senior unsecured
bond concluded on May 31, 2017.
Interest expense on financial liabilities measured at amortized cost decreased during
the year ended December 31, 2017, compared to 2016 (2017: USD -38.4 million,
2016: USD -39.0 million). This decrease was primarily attributable to the fact that
the increase in floating interest rates in 2017 was more than offset by a decrease in
average outstanding debt during the year ended December 31, 2017, compared to
2016. Other financial charges increased in 2017 compared to 2016 (2017: USD -5.8
million, 2016: USD -4.6 million) which was primarily attributable to commitment fee
paid for available credit lines, of which the total availability increased in 2017.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
4
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
RECONCILIATION OF MOVEMENTS OF LIABILITIES TO CASH FLOWS ARISING FROM FINANCING
ACTIVITIES
(in thousands of USD)
Liabilities
Equity
Note
Loans and
borrow-
ings
Other
Notes
Other bor-
rowings
Share
capital /
premium
Reserves
Treasury
shares
Retained
earnings
Total
Balance at January 1, 2017
1,085,562
-
-
1,388,273
120
(16,102)
515,665 2,973,518
Changes from financing
cash flows
Proceeds from issue of
other notes
Proceeds from loans and
borrowings
Proceeds from issue of
other borrowings
Proceeds from settlement
of derivatives
Transaction costs related
to loans and borrowings
Repayment of borrowings
Dividend paid
Total changes from
financing cash flows
Other changes
Liability-related
Capitalized borrowing costs
Total liability-related
other changes
Total equity-related
other changes
BALANCE AT DECEMBER 31,
2017
15
15
15
-
-
150,000
326,014
-
-
-
-
-
15
(3,174)
(2,700)
15 (710,993)
-
-
-
-
-
-
50,010
-
-
-
-
(388,153) 147,300
50,010
15
3,682
319
3,682
319
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
448
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
326,014
50,010
-
(5,874)
-
(44,133)
(710,993)
(44,133)
(44,133)
(234,976)
-
-
4,001
4,001
2,090
2,538
701,091 147,619
50,010
1,388,273
568
(16,102)
473,622 2,745,081
Note 16 - Employee benefits
The amounts recognized in the balance sheet are as follows:
(in thousands of USD)
December 31, 2017
December 31, 2016
December 31, 2015
NET LIABILITY AT BEGINNING OF PERIOD
(2,846)
(2,038)
(2,108)
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
(827)
64
(375)
(3,984)
(3,537)
2,760
(777)
(3,207)
(3,984)
(3,984)
-
(3,984)
(261)
(646)
99
(2,846)
(2,846)
2,117
(729)
(2,117)
(2,846)
(2,846)
-
(2,846)
(108)
(44)
222
(2,038)
(852)
539
(313)
(1,725)
(2,038)
(2,038)
-
(2,038)
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 plans - are uninsured and unfunded. The unfunded
obligations include provisions in respect of LTIP 2016 and LTIP 2017 (see Note 13).
The Group expects to contribute the following amount to its defined benefit pension
plans in 2018: USD 255,814.
Note 17 - Trade and other payables
(in thousands of USD)
December 31, 2017
December 31, 2016
Advances received on contracts in progress, between 1 and 5 years
Total non-current other payables
Trade payables
Accrued payroll
Dividends payable
Accrued expenses
Accrued interest
Deferred income
Other payables
Total current trade and other payables
539
539
19,274
3,596
160
22,518
1,762
10,020
4,025
61,355
533
533
18,107
2,581
7
29,245
1,150
13,746
5,023
69,859
The decrease in accrued expenses is mainly related to the settlement in 2017 of the
accrued profit split of the VLCC KHK Vision and the accrued TC-in cost of the Suezmaz
Suez Hans, lower accruals of spot related voyage expenses and lower bonus accruals.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
5
1
Other payables are mainly related to the deferred gain of USD 5.0 million which was
the difference between the fair value and the sale price of the four VLCCs of the sale
and leaseback entered into on December 16, 2016. This excess was deferred and is
being amortized over the duration of the lease, i.e. 5 years (see Note 19).
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 trade and other receivables and payables.
(in thousands of USD)
Carrying amount
Fair value
Note
Hedging
instruments
Loans and
receivables
Other
financial
liabilities
Total Level 1 Level 2 Level 3
Total
December 31, 2016
Financial assets not
measured at fair value
Non-current receivables
Trade and other receivables *
Cash and cash equivalents
Financial liabilities not
measured at fair value
Secured bank loans
Unsecured bank loans
Trade and other payables *
Advances received on contracts
December 31, 2017
Financial assets measured
at fair value
Forward exchange contracts
Financial assets not
measured at fair value
Non-current receivables
Trade and other receivables *
Cash and cash equivalents
Financial liabilities not
measured at fair value
Secured bank loans
Unsecured bank loans
Unsecured notes
Unsecured other borrowings
Trade and other payables *
Advances received on contracts
10
11
12
15
15
17
17
-
10
11
12
15
15
15
15
17
17
-
-
-
-
-
-
-
-
-
467
467
-
-
-
-
-
-
-
-
-
-
-
183,914
145,193
206,689
535,796
-
-
-
-
183,914
145,193
206,689
535,796
-
-
-
- 178,216
-
-
-
-
178,216
-
-
-
-
-
-
-
-
-
160,352
112,000
143,648
416,000
1,085,562
-
56,113
533
1,142,208
1,085,562
-
56,113
533
1,142,208
- 1,092,023
-
-
-
-
-
-
- 1,092,023
-
-
-
-
-
-
-
-
-
-
-
-
467
467
160,352
112,000
143,648
416,000
-
-
-
-
467
-
467
- 128,427
-
-
-
-
128,427
-
-
-
-
-
-
-
-
-
701,091
-
147,619
50,010
51,335
539
950,594
701,091
-
- 706,056
-
-
147,619 149,630
-
-
-
-
-
-
-
50,010
51,335
539
950,594
-
-
-
-
-
-
706,056
-
149,630
-
-
-
* Deferred charges (see Note 11) and deferred income (see Note 17), which are not financial assets (liabilities) are not included.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Measurement of fair values
Valuation techniques and significant unobservable inputs
Level 1 fair value was determined based on the actual trading of the unsecured notes,
due in 2022, and the trading price on December 31, 2017. The following tables show
the valuation techniques used in measuring Level 1, Level 2 and Level 3 fair values,
as well as the significant unobservable inputs used.
Financial instruments measured at fair value
Type
Valuation Techniques
Significant unobservable inputs
Forward exchange contracts
Financial instruments not measured at fair value
Forward pricing: the fair value is
determined using quoted forward
exchange rates at the reporting
date and present value calculations
based on high credit quality yield
curve in the respective currencies.
Not applicable
Type
Valuation Techniques
Significant unobservable inputs
Non-current receivables
(consisting of shareholders' loans)
Other financial liabilities
(consisting of secured and unsecured bank loans)
Other financial notes (consisting of unsecured notes)
Discounted cash flow
Discounted cash flow
Discount rate
Discount rate
Not applicable
Transfers between Level 1, 2 and 3
There were no transfers between these levels in 2016 and 2017.
Financial risk management
In the course of its normal business, the Group is exposed to the following risks:
• Credit risk
• Liquidity risk
• Market risk (Tanker market risk, interest rate risk and currency risk)
The Company’s Board of Directors has overall responsibility for the establishment
and oversight of the Group’s risk management framework. The Board of Directors
has established the Audit and Risk Committee, which is responsible for developing
and monitoring the Group’s risk management policies. The Committee reports
regularly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and controls and to monitor
risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and the Group’s activities. The
Group, through its training and management standards and procedures, aims to
maintain a disciplined and constructive control environment in which all employees
understand their roles and obligations.
The Group’s Audit and Risk Committee oversees how management monitors
compliance with the Group’s risk management policies and procedures, and reviews
the adequacy of the risk management framework in relation to the risks faced by
the Group. The Group’s Audit and Risk Committee is assisted in its oversight role
by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the Audit
and Risk Committee.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
5
1
Credit risk
Trade and other receivables
The Group has a 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 one client representing 10% of the
Tankers segment's total revenue in 2017 (see Note 2) only represented 0.03% of the
total trade and other receivables at December 31, 2017 (2016: two clients representing
3.4%). 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
2017
124,243
2,071
9,784
699
136,797
2016
155,950
1,261
7,666
1,465
166,342
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, 2017 45.37% (2016: 55.72%) 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.
Non current receivables mainly consist of shareholder's loans to joint ventures (see
Note 10). As at December 31, 2017 and December 31, 2016, these receivables had no
maturity date and were not impaired.
Cash and cash equivalents
The Group held cash and cash equivalents of USD 143.6 million at December 31,
2017 (2016: USD 206.7 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 12).
Derivatives
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, 2017, there were no outstanding guarantees towards joint
ventures. The credit facilities of 2 joint ventures (see Note 25), in respect of which the
Group had previously issued guarantees, expired in 2017.
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. The sources of financing are diversified
and the bulk of the loans are irrevocable, long-term and maturities are spread over
different years.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
The following are the remaining contractual maturities of financial liabilities:
(in thousands of USD)
Note
Carrying
Amount
Total
Less than
1 year
Between
1 and 5 years
More than
5 years
Contractual cash flows December 31, 2016
Non derivative financial liabilities
Bank loans
Current trade and other payables *
Non-current other payables
Derivative financial liabilities
Interest rate swaps
Forward exchange contracts
15
17
17
17
17
1,085,562
56,113
—
1,141,675
1,218,702
56,113
—
1,274,815
150,630
56,113
—
206,743
718,950
—
—
718,950
349,122
—
—
349,122
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Contractual cash flows December 31, 2017
(in thousands of USD)
Derivative financial liabilities
Bank loans and other notes
Other borrowings
Current trade and other payables *
Non-current other payables
Non 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
15
15
17
17
17
17
848,710
50,010
51,335
—
950,055
1,009,508
50,010
51,335
—
1,110,853
83,039
50,010
51,335
—
184,384
750,722
—
—
—
750,722
175,747
—
—
—
175,747
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Deferred income (see Note 17), which are not financial liabilities, are not included.
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 rates change. It is not expected that the cash flows included in the
table above (the maturity analysis) could occur significantly earlier, or at significantly
different amounts than stated above.
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. The Group has a strategy of operating the
majority of its fleet on the spot market but tries to keep a certain part of the fleet
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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
5
1
Every increase (decrease) of 1,000 USD on the 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)
2017
2016
2015
Profit or loss
Profit or loss
Profit or loss
1,000 USD
Increase
1,000 USD
Decrease
1,000 USD
Increase
1,000 USD
Decrease
1,000 USD
Increase
1,000 USD
Decrease
13,420
(13,420)
14,140
(14,140)
12,972
(12,972)
Interest rate risk
Euronav interest rate management general policy is to borrow at floating interest
rates based on LIBOR plus a margin. The Euronav Corporate Treasury Department
monitors the Group's interest rate exposure on a regular basis. From time to time and
under the responsibility of the Chief Financial Officer, different strategies to reduce
the risk associated with fluctuations in interest rates can be proposed to Board of
Directors for their approval. 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 may use 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, 2017, the Group had no such instruments in
place.
At the reporting date the interest rate profile of the Group's interest-bearing financial
instruments was:
(in thousands of USD)
Fixed rate instruments
Financial assets
Financial liabilities
Variable rate instruments
Financial liabilities
2017
2016
-
147,619
147,619
751,101
751,101
-
-
-
1,085,562
1,085,562
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 as of that date.
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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
(effect in thousands of USD)
Profit or Loss
Equity
50 BP
Increase
50 BP
Decrease
50 BP
Increase
50 BP
Decrease
December 31, 2015
Variable rate instruments
Interest rate swaps
Cash Flow Sensitivity (Net)
December 31, 2016
Variable rate instruments
Interest rate swaps
Cash Flow Sensitivity (Net)
December 31, 2017
Variable rate instruments
Interest rate swaps
Cash Flow Sensitivity (Net)
(5,670)
-
(5,670)
(5,315)
-
(5,315)
(4,685)
-
(4,685)
5,670
-
5,670
5,315
-
5,315
4,685
-
4,685
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Currency risk
The Company’s policy is to monitor its material non-functional currency transaction
exposure so as to allow for natural coverage (revenues in the same currency than
the expenses) whenever possible. When natural coverage is not deemed reasonably
possible (for example for long term commitments), the Company manages its
material non-functional currency transaction exposure on a case-by-case basis,
either by entering into spot foreign currency transactions, foreign exchange forward,
swap or option contracts, or by engaging a third party financial advisor with the
purpose of managing the foreign exchange risk for us.
The Group’s exposure to currency risk is related to its operating expenses expressed
in Euros and to Treasury Notes denominated in Euros. In 2017 about 16.5% (2016:
17.4% and 2015: 17.4%) of the Group’s total operating expenses were incurred in
Euros. Revenue and the financial instruments are expressed in USD only, except for
instruments issued under the Treasury Notes Program (Note 15).
(in thousands of USD)
December 31, 2017
December 31, 2016
December 31, 2015
EUR
USD
EUR
USD
EUR
USD
Trade payables
Operating expenses
Treasury Notes
(7,891)
(89,289)
(50,010)
(11,383)
(452,113)
-
(8,725)
(92,608)
-
(9,383)
(440,830)
-
(9,913)
(89,457)
-
(13,121)
(425,806)
-
For the average and closing rates applied during the year, we refer to Note 27.
In the past, Euronav had 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 used a financial trading strategy called Currency Overlay
Management Strategy which managed the equivalent of EUR 40.0 million exposures
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
5
1
on a yearly basis. The currency overlay manager conducted foreign-exchange
hedging by selectively placing and removing hedges to achieve the objectives set by
us. On July 29, 2016, Euronav terminated this agreement.
As such there is no impact of this program on the Group's consolidated statement of
profit or loss for the year ending December 31, 2017 (2016: loss of USD 0.9 million
and 2015: loss of USD 1.0 million).
Sensitivity analysis
A 10 percent 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
2017
211
(7,113)
2016
532
(10,025)
2015
473
(9,565)
A 10 percent weakening of the EUR against the USD at December 31, would have had
the equal but opposite effect to the amounts shown above, on the basis that all the
other variables remain constant.
Master netting or similar agreements
The Group enters into derivative transactions under 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 maximise 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 amounts 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%
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.
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;
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
• 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.
Furthermore, certain of our credit facilities contain a cross-default provision that
may be triggered by a default under one of our other credit facilities. A cross-default
provision means that a default on one loan would result in a default on certain other
loans. Because of the presence of cross-default provisions in certain of our credit
facilities, the refusal of any one lender under our credit facilities to grant or extend a
waiver could result in certain of our indebtedness being accelerated, even if our other
lenders under our credit facilities have waived covenant defaults under the respective
credit facilities. If our secured indebtedness is accelerated in full or in part, it would
be very difficult in the current financing environment for us to refinance our debt or
obtain additional financing and we could lose our vessels and other assets securing
our credit facilities if our lenders foreclose their liens, which would adversely affect
our ability to conduct our business.
As of December 31, 2017, December 31, 2016 and December 31, 2015, the Group
was in compliance with all of the covenants contained in the debt agreements. With
respect to the quantitative covenants as of December 31, 2017, as described above:
1.
2.
3.
4.
current assets on a consolidated basis (including available credit lines of USD
607.4 million) exceeded current liabilities by USD 729.3 million
aggregated cash was USD 751.0 million
cash was USD 143.6 million
ratio of Stockholders’ Equity to Total Assets was 65.7%
In the course of 2017, the Company updated its dividend policy.
The Board has adopted the following current dividend payment policy: the Company
intends to pay a minimum fixed dividend of at least USD 0.12 in total per share
per year provided (a) the Company has in the view of management and the board,
sufficient balance sheet strength and liquidity combined (b) with sufficient earnings
visibility from fixed income contracts.
In addition, if the results per share are positive and exceed the amount of the fixed
dividend, that additional income* will be allocated to either: additional cash dividends,
share buy-back, accelerated amortization of debt or the acquisition of vessels which
we consider at that time to be accretive to shareholders’ value.
* Treatment of capital losses and capital gains:
As part of its distribution policy Euronav will
continue to include exceptional capital losses
when assessing additional dividends but also
continue to exclude exceptional capital gains
when assessing additional dividend payments.
* Treatment of Deferred Tax Assets (DTA) and
Deferred Tax Liabilities (DTL): As part of its
distribution policy Euronav will not include
non-cash items affecting the results such as
DTA or DTL.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
5
1
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
4 years under non-cancellable leases are as follows:
(in thousands of USD)
Less than 1 year
Between 1 and 5 years
More than 5 years
Total future lease payments
December 31, 2017
December 31, 2016
(32,120)
(95,524)
-
(127,644)
(32,120)
(127,644)
-
(159,764)
Options to extend the charter period, if any, have not been taken into account when
calculating the future minimum lease payments.
In 2016, the Group entered into a five year leaseback agreement for four VLCCs on
December 16, 2016. The sale of the vessels occurred on December 22, 2016 and the
charter period has a duration of 5 years, therefore ending on December 22, 2021.
Under these leaseback agreements there is a sellers credit of USD 4.5 million of the
sale price that becomes immediately due and payable by the owners upon sale of the
vessel during the charter period and shall be paid out of the sales proceeds. It also
becomes due to the extent of 50% of the (positive) difference between the fair market
value of the vessels at the end of the leaseback agreements and USD 17.5 million
(for the oldest VLCC) or USD 19.5 million (for the other vessels). Furthermore, the
Group provides a residual guarantee to the owners in the aggregate amount of up
to USD 20.0 million in total at the time of redelivery of the four vessels. The parties
also agreed a profit split, if the vessel is sold at charter expiry they shall share the
net proceeds of the sale, 75% for owners and 25% for charterers, between USD 26.5
million and USD 32.5 million (for the oldest VLCC) or between USD 28.5 million and
USD 34.5 million (for the other vessels).
The Group analysed the classification of the leaseback agreements based on the
primary lease classification criteria and the supplemental indicators in IAS 17, and
determined that these agreements qualified as operating leases.
Non-cancellable operating lease rentals for office space and company cars with an
average duration of 3 years are payable as follows:
(in thousands of USD)
Less than 1 year
Between 1 and 5 years
More than 5 years
Total non-cancellable operating lease rentals
December 31, 2017
December 31, 2016
(2,287)
(7,224)
(1,227)
(10,738)
(2,297)
(5,070)
(1,183)
(8,550)
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Amounts recognized in profit and loss
(in thousands of USD)
Bareboat charter
Time charter
Office rental
Total recognized in profit and loss
2017
(31,111)
(62)
(2,136)
(33,309)
2016
(792)
(16,921)
(2,219)
(19,932)
2015
-
(25,849)
(2,581)
(28,430)
Leases as lessor
Future minimum lease receivables
The Group leases out some of its vessels under time charter agreements (operating
leases). The future minimum lease receivables with an average duration of 5 months
under non-cancellable leases are as follows:
(in thousands of USD)
Less than 1 year
Between 1 and 5 years
More than 5 years
Total future lease receivables
December 31, 2017
December 31, 2016
103,007
147,967
31,793
282,767
150,450
35,083
-
185,533
The amounts shown in the table above include the Group’s share of operating leases
of joint ventures.
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, 2017, Euronav and its subsidiaries, without joint ventures, have
future minimum lease receivables less than one year of USD 54.4 million (2016: USD
108.5 million) and future minimum lease receivables between 1 and 5 years of USD
0.0 million (2016: USD 35.1 million).
Following the rationalization of the TI Pool structure in 2017 (see Note 23), Tankers
International Ltd. ("TIL") became the disponent owner of all of the vessels in the TI
Pool as all the vessels are now time chartered with a duration of 1 year to TIL at a
floating rate equivalent to the average spot rate achieved by the pool times the pool
points assigned to each vessel. At December 31, 2017, 24 of our VLCC vessels were
employed in the TI Pool under such floating time charters. Given the variable nature
of the time charter rates, there are no minimum lease receivables for these contracts
and therefore, these floating time charters are not included in the table above.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
6
1
Non-cancellable operating lease rentals for office space with an average duration of
5 years are receivable as follows:
(in thousands of USD)
Less than 1 year
Between 1 and 5 years
More than 5 years
Total non-cancellable operating lease rentals
December 31, 2017
December 31, 2016
726
2,903
233
3,862
806
2,644
878
4,328
Amounts recognized in profit and loss
(in thousands of USD)
Bareboat charter
Time charter
Office rental
Total recognized in profit and loss
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 four different subtenants, starting
in 2014.
2017
-
118,705
840
119,545
2016
-
140,227
878
141,105
2015
-
126,091
879
126,970
Note 20 - Provisions and 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 jeopardise the Group's financial position.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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 25) 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
2017
1,015
2016
1,145
2015
1,591
The Nomination and 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)
Total fixed remuneration
of which
Cost of pension
Other benefits
Total variable remuneration
of which
Share-based payments
2017
1,176
35
58
1,331
597
All amounts mentioned refer to the Executive Committee in its official composition
throughout 2017.
The remuneration of the CEO can be summarized as follows:
(in thousands of GBP)
Total fixed remuneration
of which
Cost of pension
Other benefits
Total variable remuneration
of which
Share-based payments
2017
407
-
13
528
233
2016
1,175
35
57
1,042
351
2016
405
-
11
437
171
2015
1,176
35
57
2,392
1,010
2015
405
-
11
863
333
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
6
1
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 but with conditions (see Note 22).
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 is
EUR 5.7705. All of the beneficiaries have accepted the options granted to them. In
2016 the Company bought back 692,415 shares and delivered 116,667 shares upon
the exercise of share options. In 2017 Euronav did not buy back or dispose of any
own shares. 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.
On February 2, 2016, the board of directors granted 54,616 phantom stock units
within the framework of an additional long term incentive plan. Each unit gives a
conditional right to receive an amount of cash equal to the fair market value of one
share of the company on the settlement date. The phantom stock units will mature
one-third each year on the second, third and fourth anniversary of the award (see
Note 22). On February 9, 2017 the board of directors granted 66,449 phantom stock
units within the framework of an additional long term incentive plan. Each unit
gives a conditional right to receive an amount of cash equal to the fair market
value of one share of the company on the settlement date. The phantom stock units
will mature one-third each year on the second, third and fourth anniversary of the
award (see Note 22).
Relationship with CMB
In 2004, Euronav split from Compagnie Maritime Belge (CMB). CMB renders some
administrative and general services to Euronav. In 2017 CMB invoiced a total amount
of USD 34,928 (2016: USD 17,731 and 2015: USD 0).
Properties
The Group leases office space in Belgium from Reslea N.V., an entity jointly controlled
by CMB and Exmar. Under this lease, the Group paid an annual rent of USD 179,079
in 2017 (2016: USD 175,572 and 2015: USD 178,104). This lease expires on August 31,
2021.
The Group leased 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 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 183,766 in 2017 (2016: USD 199,873 and 2015: USD
184,791). This lease expired on December 31, 2017.
The Group subleases office space in its 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 2017 a rent of USD 416,995 (2016: USD 443,643 and 2015: USD 495,507). This
sublease expires on April 27, 2023.
The Company also subleases office space in its 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 50-50
joint venture with International Seaways. Under this sublease, the Company received
in 2017 a rent of USD 218,894 (2016: USD 232,882 and 2015: USD 260,108). 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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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, 2017, no rights were exercised by
any of the parties under the registration rights agreement.
Transactions with subsidiaries and joint ventures
The Group has supplied funds in the form of shareholder's 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 25).
On 20 May, 2016, the Group announced that it had agreed with Bretta Tanker Holdings
Inc. (“Bretta”) to terminate its Suezmax joint ventures and to enter into a share swap
and claims transfer agreement. The joint ventures covered four Suezmax vessels:
the Captain Michael (2012 - 157,648 dwt), the Maria (2012 - 157,523 dwt), the
Eugenie (2010 - 157,672 dwt) and the Devon (2011 - 157,642 dwt). Euronav assumed
full ownership of the two companies owning the two youngest vessels, the Captain
Michael and the Maria, and Bretta assumed full ownership of the two companies
owning the Eugenie and the Devon (see Note 24).
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
6
1
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 and for the year ended December 31, 2016
(in thousands of USD)
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
As of and for the year ended December 31, 2017
TI Africa Ltd
TI Asia Ltd
Kingswood Co. Ltd
Tankers Agencies (UK) Ltd
Total
Trade
receivables
Trade
payables
Shareholders
Loan
Turnover
Dividend
Income
241
303
-
-
-
-
-
-
544
30
130
-
134
294
-
-
-
-
-
-
-
-
-
50
-
-
137
187
137,615
65,897
-
-
-
-
-
-
360
360
265
249
275
287
-
-
-
-
-
-
28
23,450
203,512
1,796
23,478
100,115
62,647
-
-
162,762
372
372
-
-
744
-
-
1,250
-
1,250
Guarantees
The Group provided guarantees to financial institutions that provided credit facilities
to joint ventures of the Group. As of December 31, 2016, the total amount outstanding
under these credit facilities was USD 75.3 million, of which the Group guaranteed
USD 37.7 million. As of December 31, 2017, these credit facilities and the related
guarantees had expired (see Note 25).
Note 22 - Share-based payment arrangements
Description of share-based payment arrangements:
At December 31, 2017, the Group had the following share-based payment
arrangements:
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 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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
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
Number of
instruments
Vesting Conditions
Contractual life
of Options
Options granted to key management personnel
December 16, 2013 ("Tranche 1")
December 16, 2013 ("Tranche 2")
December 16, 2013 ("Tranche 3")
583,000
583,000
583,000
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
Total Share options
1,750,000
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 US listing exchange, then only
2/3 of the shares would be exercisable and would have to meet the first 2 vesting
conditions listed above.
Long term incentive plan 2015 (Equity-settled)
The Group's Board of Directors 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 ('RSUs') which will be paid out in cash, with cliff vesting on
the third anniversary. In total 236,590 options and 65,433 RSUs were granted on
February 12, 2015. Vested stock options may be exercised until 13 years after the
grant date.
Long term incentive plan 2016 (Cash-settled)
The Group's Board of Directors implemented in 2016 an additional long term
incentive plan for key management personnel. Under the terms of this LTIP, the
beneficiaries will obtain their respective LTIP in cash, based on the volume weighted
average price of the shares on Euronext Brussels over the 3 last business days of
the relevant vesting period. The phantom stock units will mature one-third each
year on the second, third and fourth anniversary of the award. In total a number of
54,616 phantom stocks were granted on February 2, 2016.
Long term incentive plan 2017 (Cash-settled)
The Group's Board of Directors implemented in 2017 an additional long
term incentive plan for key management personnel. Under the terms of this
LTIP, the beneficiaries will obtain their respective LTIP in cash, based on the
volume weighted average price of the shares on Euronext Brussels over the
3 last business days of the relevant vesting period. The phantom stock units
will mature one-third each year on the second, third and fourth anniversary of
the award. In total a number of 66,449 phantom stock units were granted on
February 9, 2017.
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.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
6
1
The inputs used in measurement of the fair values at grant date for the equity-settled
share option programs were as follows:
Share option program 2013
LTIP 2015
(figures in EUR)
Tranche 1
Tranche 2
Tranche 3
Tranche 1
Tranche 2
Tranche 3
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
2.270
6.070
5.770
40%
303
-
1%
2.260
6.070
5.770
40%
467
-
1%
2.120
6.070
5.770
40%
730
-
1%
1.853
10.050
10.0475
39.63%
365
8%
0.66%
1.853
10.050
10.0475
39.63%
730
8%
0.66%
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 behaviour
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, 2017 and had not yet vested.
The liability in respect of its obligations under the LTIP 2016 and LTIP 2017 is
measured based on the Company’s share price at the reporting date and taking
into account the extent to which the services have been rendered to date. All of the
phantom stocks granted on February 2, 2016 and February 9, 2017 respectively,
remained outstanding as of December 31, 2017. The Company’s share price was
EUR 10.613 at the grant date of the LTIP 2016 and EUR 7.268 at the grant date of
the LTIP 2017, and was EUR 7.684 as at December 31, 2017.
Expenses recognized in profit or loss
For details on related employee benefits expense see Note 5. The expenses
related to the LTIP 2016 and LTIP 2017 (USD 0.7 million) are included in the
Provision for employee benefits.
Reconciliation of outstanding share options
The number and weighted-average exercise prices of options under the 2013
share option program and the 2015 LTIP are as follows:
(figures in EUR)
Number of options
2017
Weighted average
exercise price 2017
Number of options
2016
Weighted average
exercise price 2016
Outstanding at January 1
Forfeited during the year
Exercised during the year
Granted during the year
Outstanding at December 31
Vested at December 31
586,590
0
0
0
586,590
507,726
7.495
0
0
0
7.495
0
703,257
0
(116,667)
0
586,590
428,863
7.209
0
5.770
0
7.495
0
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
In 2016 the Company bought back 692,415 shares and delivered 116,667 shares upon
the exercise of share options under the 2013 program. In 2017 Euronav did not buy
back or dispose of any own shares.
The weighted-average share price at the date of exercise for the share options
exercised in 2016 was EUR 8.99.
Note 23 - Group entities
Parent
Euronav NV
Subsidiaries
Euronav Tankers NV
Euronav Shipping NV
Euronav (UK) Agencies Limited
Euronav Luxembourg SA
Euronav sas
Euronav Ship Management sas
Euronav Ship Management Ltd
Euronav Ship Management Hellas
(branch office)
Euronav Hong Kong
Euro-Ocean Ship Management (Cyprus) Ltd
Euronav Singapore
Fiorano Shipholding Ltd
Larvotto Shipholding Ltd
Euronav MI Inc
Joint ventures
Fiorano Shipholding Ltd
Fontvieille Shipholding Ltd
Great Hope Enterprises Ltd
Kingswood Co. Ltd
Larvotto Shipholding Ltd
Moneghetti Shipholding Ltd
TI Africa Ltd
TI Asia Ltd
Tankers Agencies (UK) Ltd
Tankers International LLC
Associates
Tankers International LLC
Country of
incorporation
Consolidation
method
Ownership interest
December 31,
2017
December 31,
2016
December 31,
2015
Belgium
full
100.00%
100.00%
100.00%
Belgium
Belgium
UK
Luxembourg
France
France
Liberia
Hong Kong
Cyprus
Singapore
Hong Kong
Hong Kong
Marshall
Islands
Hong Kong
Hong Kong
Hong Kong
Marshall
Islands
Hong Kong
Hong Kong
Hong Kong
Hong Kong
UK
Marshall
Islands
Marshall
Islands
full
full
full
full
full
full
full
full
full
full
full
full
full
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%
100.00%
NA
NA
NA
50.00%
NA
NA
50.00%
50.00%
50.00%
50.00%
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
NA
NA
50.00%
NA
NA
50.00%
50.00%
NA
NA
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
NA
NA
NA
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
NA
NA
equity
NA
40.00%
40.00%
In 2015 two joint ventures, Asia Conversion Corporation and Africa Conversion
Corporation, were dissolved.
In 2016, the Group transferred its equity interests in Moneghetti Shipholding Ltd. and
Fontvielle Shipholding Ltd. and acquired Bretta Tanker Holdings‘ equity interests in
Fiorano Shipholding Ltd. and Larvotto Shipholding Ltd. As a result, the Group’s equity
interest in Fiorano Shipholding Ltd. and Larvotto Shipholding Ltd. increased from 50% to
100% (see Note 24). In 2016 one joint venture, Great Hope Enterprises Ltd. was dissolved.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
6
1
In the fourth quarter of 2017, Euronav NV incorporated a new subsidiary, Euronav MI
Inc (see Note 26).
In 2017, the corporate structure of Tankers International pool (“TI Pool”) was
rationalized. Under the new structure, the shares of Tankers UK Agencies (“TUKA”),
fully held at the time by Tankers International LLC (“TI LLC”), an entity incorporated
under the laws of the Marshall Islands, have been distributed to the two remaining
founding members of the TI Pool, (namely Euronav NV and International Seaways
INC), to form a 50-50 joint venture.
Further, following the withdrawal in December 2017 of one of its members, TI LLC,
which was previously an associate of the Group, became a joint venture of the Group
as from that time.
Additionally, a new company, Tankers International Ltd. ("TIL"), was incorporated
under the laws of the United Kingdom, and is fully owned by TUKA. TIL became the
disponent owner of all of the vessels in the TI Pool as all the vessels are now time
chartered to TIL at a floating rate equivalent to the average spot rate achieved by the
pool times the pool points assigned to each vessel.
This new structure allowed the TI Pool to arrange for a credit line financing in order
to lower the working capital requirement for the Pool participants which potentially
can attract additional pool participants.
At December 31, 2017, the Group held 50% of the voting rights in TUKA but held
61% of the outstanding shares that participate in the result of the entity. As
Euronav acquired ownership of these shares on December 28, 2017, the Group's
share of the profit of the entity, as well as the Group's balances and transactions
with this joint venture were not significant as of and for the year ended December
31, 2017.
At December 31, 2017, the Group held 50% of the voting rights in TI LLC but held
59% of the outstanding shares that participate in the result of the entity. The Group's
share of the profit of the entity, as well as the Group's balances and transactions
with this joint venture were not significant as of and for the year ended December
31, 2017.
Note 24 - Business combinations
On May 20, 2016, the Group announced the termination of the joint ventures with
Bretta Tanker Holdings, Inc. covering four Suezmax vessels. Euronav assumed full
ownership of the companies owning the two youngest vessels, the Captain Michael
(2012 - 157,648 dwt) and the Maria (2012 - 157,523 dwt) on June 2, 2016.
On June 2, 2016, the Group entered into a share swap and claim transfer agreement
whereby:
• The Group transferred its equity interests in Moneghetti Shipholding Ltd.
(hereafter ‘Moneghetti’) and Fontvieille Shipholding Ltd. (hereafter ‘Fontvieille’)
and acquired Bretta Tanker Holdings’ equity interests in Fiorano Shipholding
Ltd. (hereafter ‘Fiorano’) and Larvotto Shipholding Ltd. (hereafter ‘Larvotto’);
and
• The Group transferred its claims arising from the shareholder loans to
Moneghetti and Fontvieille and acquired Bretta Tanker Holdings’ claims arising
from the shareholder loans to Fiorano and Larvotto.
As a result, the Group’s equity interest in both Fiorano and Larvotto increased from
50% to 100% giving the Group control of both companies. The Group no longer has an
equity interest in Moneghetti and Fontvieille. Before the swap agreement, the Group
accounted for the four entities using the equity method. Following the acquisition,
Fiorano and Larvotto are fully consolidated as of June 2, 2016.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Fair value at acquisition date
15,110
(21,498)
39,973
33,585
With this transaction, the Group has become the full owner of the two youngest
vessels, the Captain Michael and the Maria, while Bretta has become the full owner
of the Devon and the Eugenie.
Consideration transferred
(in thousands of USD)
Cash
Shares in Fontvieille and Moneghetti
Shareholders' loan receivable
Total consideration transferred
Contribution to revenue and profit/loss
Since their acquisition by the Group on June 2, 2016, the 2 acquired companies
contributed revenue of USD 4.8 million and a profit of USD 0.1 million to the Group’s
consolidated results for the year ended December 31, 2016. If the acquisition had
occurred on 1 January 2016, management estimates that the Group’s consolidated
revenue for the year ended December 31, 2016 would have been USD 698.3 million
and consolidated profit for the twelve month period ended December 31, 2016 would
have been USD 205.1 million. In determining these amounts, management has
assumed that the fair value adjustments, that arose on the date of acquisition would
have been the same if the acquisition had occurred on 1 January 2016.
Acquisition related costs
The Group did not incur any material acquisition-related costs for the business
combination and these costs were expensed as incurred.
Step acquisition
The transaction resulted in a loss of USD 24.2 million. This loss was recognized in
the consolidated statement of profit or loss for the year ended December 31, 2016,
under the heading ‘Loss on disposal of investments in equity accounted investees’.
In accordance with IFRS 3 (Business Combinations), Euronav accounted for this
transaction as a step acquisition and therefore had to re-measure at the acquisition
date to fair value Euronav’s non-controlling equity interest in the two joint ventures it
acquired (loss of USD 13.5 million) as well as to measure at fair value the consideration
transferred, including Euronav’s interest in the other two joint ventures (loss of USD
10.7 million). At acquisition date, the fair value of the Group’s non-controlling interest
in the two acquired joint ventures amounted to USD (18.6) million.
Identifiable assets acquired and liabilities assumed
The following table summarizes the recognized amounts of assets acquired and
liabilities assumed at the acquisition date.
(in thousands of USD)
Property, plant and equipment
Trade receivables
Cash and cash equivalents
Loans and borrowings
Trade and other payables
Total identifiable net assets acquired
Note
Fair value at acquisition date
8
-
-
15
-
120,280
3,685
8,355
(61,065)
(4,086)
67,169
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
7
1
Measurement of fair values
Assets acquired
Valuation techniques
Property, plant and equipment
The price was agreed among parties by reference to valuation reports by brokers
Goodwill
The transaction did not give rise to the recognition of any goodwill:
(in thousands of USD)
Consideration transferred
Fair value of pre-existing interests in Larvotto and Fiorano
Fair value of identifiable net assets
Fair value of shareholders' loan liabilities versus Bretta Tanker
Holdings, transferred to Euronav
Goodwill
Fair value at acquisition date
33,585
(18,633)
(67,169)
52,217
-
Merger with Gener8 Maritime, Inc.
On December 21, 2017, Euronav announced that the Company has reached an
agreement on a stock-for-stock merger for the entire issued and outstanding share
capital of Gener8 Maritime, Inc. (“Gener8“) pursuant to which Gener8 would become a
wholly-owned subsidiary of Euronav. The “Exchange Ratio“ of 0.7272 Euronav shares
for each share of Gener8 is expected to result in the issuance of approximately 60.9
million new Euronav shares to Gener8 shareholders. The Exchange Ratio implies
a premium of 35% paid on Gener8 shares based on the closing share prices on 20
December 2017. The merger will result in Euronav shareholders owning approximately
72% of the issued share capital of the combined entity and Gener8 shareholders
owning approximately 28% (based on the fully diluted share capital of Euronav and the
fully diluted share capital of Gener8). The merger is subject to the approval of Gener8’s
shareholders, the consent of certain of Gener8’s lenders to assign certain debt
facilities to the combined entity, the effectiveness of a registration statement to be filed
by Euronav with the U.S. Securities and Exchange Commission (the “SEC”) to register
the Euronav shares to be issued in the merger (the “New Registration Statement”),
the listing of such shares on the New York Stock Exchange (the “NYSE”) and other
customary closing conditions. Certain of these closing conditions are substantive,
and these conditions have not yet been met. The Gener8 shares will be contributed to
Euronav in application of the Belgian Companies Code procedure of a capital increase
through contribution in kind. The increase of the Euronav share capital will occur under
the existing authorized capital of USD 150.0 million.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Note 25 - 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)
December 31, 2017
December 31, 2016
30,595
-
30,595
-
-
-
16,867
1,546
18,413
-
-
-
December 31, 2017
December 31, 2016
Carrying amount of interest at the beginning of the period
Group's share of profit (loss) for the period
Dividend in kind (shares TUKA) distributed by associate (Note 23)
Reclassification of associate to joint venture (Note 23)
Carrying amount of interest at the end of the period
1,546
149
(1,559)
(136)
-
1,212
334
-
-
1,546
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
7
1
JOINT VENTURES
The following table contains a roll forward of the balance sheet amounts with respect to the Group’s joint ventures:
(in thousands of USD)
ASSET
LIABILITY
Investments in
equity accounted
investees
Shareholders
loans
Investments in
equity accounted
investees
Shareholders
loans
Gross balance
Offset investment with shareholders loan
Balance at January 1, 2015
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
Group's share of profit (loss) for the period
Group's share of other comprehensive income
Group's share on upstream transactions
Capital increase/(decrease) in joint ventures
Dividends received from joint ventures
Movement shareholders loans to joint ventures
Business combinations
Gross balance
Offset investment with shareholders loan
Balance at December 31, 2016
Group's share of profit (loss) for the period
Group's share of other comprehensive income
Dividends received from joint ventures
Dividend in kind (shares TUKA) received from
associate (Note 23)
Reclassification of associate to joint venture
(Note 23)
Movement shareholders loans to joint ventures
Gross balance
Offset investment with shareholders loan
(89,338)
105,643
16,305
51,407
1,610
(1,499)
(275)
-
(38,095)
58,520
20,425
40,161
1,224
4,646
(3,737)
(23,478)
-
15,981
(3,298)
20,165
16,867
29,933
483
(1,250)
1,559
136
-
27,565
3,030
363,414
(105,643)
257,771
-
-
-
-
(45,665)
317,749
(58,520)
259,229
-
-
-
-
-
(18,499)
(95,738)
203,512
(20,165)
183,348
-
-
-
-
-
(40,750)
162,763
(3,030)
Balance at December 31, 2017
30,595
159,733
(5,880)
-
(5,880)
-
-
5,880
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
The Group’s share on upstream transactions in 2016 related to the buy-out of the
joint venture partner to obtain full control of the VLCC V.K. Eddie. On November 23,
2016, the Group purchased the VLCC V.K. Eddie from its 50% joint venture Seven
Seas Shipping Ltd. In the Group’s consolidated financial statements, 50% of the gain
recognized on this transaction by Seven Seas Shipping Ltd. was eliminated.
The decrease in the balance of shareholders’ loans to joint ventures since December
31, 2015 is primarily due to the disposal of two joint ventures and the acquisition
of two other joint ventures on June 2, 2016, as set out in Note 24, resulting in the
settlement or consolidation, respectively, of the Group’s shareholders’ loan balances
versus these entities. For more details, we refer to the table summarizing the
financial information of the Groups' joint ventures further below.
* Both FSO Asia and FSO Africa are on a time
charter contract to North Oil Company (NOC),
the new operator of Al Shaheen field, until mid
2022.
Joint venture
Segment
Description
Great Hope Enterprises Ltd
Kingswood Co. Ltd
Tankers
Tankers
Seven Seas Shipping Ltd
Tankers
Fiorano Shipholding Ltd
Larvotto Shipholding Ltd
Fontvieille Shipholding Ltd
Moneghetti Shipholding Ltd
Tankers Agencies (UK) Ltd
Tankers International LLC
TI Africa Ltd
TI Asia Ltd
Tankers
Tankers
Tankers
Tankers
Tankers
Tankers
FSO
FSO
No operating activities, liquidated in 2016
Holding company; parent of Seven Seas Shipping Ltd. and to be liquidated in the
future
Formerly owner of 1 VLCC bought in 2016 by Euronav. Wholly owned subsidiary of
Kingswood Co. Ltd.
Single ship company, owner of 1 Suezmax, acquired Bretta's equity interest in 2016
Single ship company, owner of 1 Suezmax, acquired Bretta's equity interest in 2016
Single ship company, owner of 1 Suezmax, sold our equity interest to Bretta in 2016
Single ship company, owner of 1 Suezmax, sold our equity interest to Bretta in 2016
Parent company of Tankers International Ltd
The manager of the Tankers International Pool who commercially manages the
majority of the Group's VLCCs
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) *
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
7
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
The following table contains summarized financial information for all of the Group’s joint ventures:
(in thousands of USD)
Asset
Great Hope
Enterprises
Ltd
Kingswood
Co.
Ltd
Seven Seas
Shipping
Ltd
Fiorano
Shipholding
Ltd
Fontvieille
Shipholding
Ltd
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
50%
-
-
102
59
-
-
15
-
87
43
-
43
-
1
-
-
-
3
-
2
-
50%
520
-
489
-
-
-
2
-
50%
50%
50%
33,052
33,052
7,463
1,528
521
-
239
-
78,031
78,031
6,498
552
84,094
27,813
5,981
4,250
65,837
65,837
4,195
186
77,485
30,470
6,656
4,000
1,007
39,755
(5,546)
(14,109)
504
-
504
-
-
-
-
-
(4)
-
(2)
-
19,878
-
19,878
(2,773)
28,141
-
(7,054)
23,507
-
-
25,368
16,453
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
-
-
-
Asset
Liability
Larvotto
Shipholding
Ltd
Moneghetti
Shipholding
Ltd
TI Africa
Ltd
TI Asia
Ltd
Total
Africa
Conversion
Corp
Asia
Conversion
Corp
Total
50%
50%
50%
50%
50%
50%
73,234
73,234
7,873
1,578
81,424
29,143
6,621
3,970
70,159
70,159
7,219
4,891
79,647
43,750
7,099
4,000
215,184
208,030
12,144
880
303,018
-
1,155
-
208,405
200,452
41,744
30,465
223,552
75,343
30,832
28,858
744,422
728,795
87,727
40,139
849,740
206,519
58,601
45,078
(6,939)
(9,368)
(76,845)
(4,235)
(76,192)
(3,469)
26,141
-
(4,684)
17,949
-
(38,423)
149,615
(2,118)
72,397
(38,096)
317,750
-
-
20,424
22,672
13,265
111,193
70,280
259,229
22,837
(4,571)
(644)
-
6,762
21,317
(4,630)
(1,170)
-
5,661
-
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
3,381
2,831
17,664
15,290
51,407
-
-
-
1,610
1,610
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
7
1
(in thousands of USD)
Asset
Great Hope
Enterprises
Ltd
Kingswood
Co.
Ltd
Seven Seas
Shipping
Ltd
Fiorano
Shipholding
Ltd
Fontvieille
Shipholding
Ltd
At December 31, 2016
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
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(32)
-
(16)
-
50%
946
-
76
-
-
-
2
-
1,020
510
-
510
-
-
-
-
-
12
-
6
-
50%
50%
50%
-
-
3,221
555
946
-
132
-
2,143
1,072
-
1,072
-
13,646
(3,344)
(3)
-
7,469
-
3,735
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,182
(2,047)
(223)
-
1,146
-
573
-
6,404
(2,037)
(377)
-
500
-
250
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Asset
Liability
Larvotto
Shipholding
Ltd
Moneghetti
Shipholding
Ltd
TI Africa
Ltd
TI Asia
Ltd
Total
Africa
Conversion
Corp
Asia
Conversion
Corp
Total
50%
50%
50%
50%
50%
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,901
(1,929)
(288)
-
1,082
541
-
7,471
(2,049)
(537)
-
1,270
-
635
-
198,826
189,821
38,206
26,928
276,498
-
863
-
192,344
182,519
47,889
36,591
132,763
-
76,899
75,343
392,116
372,340
89,392
64,074
410,207
-
77,896
75,343
(40,329)
30,571
(6,595)
(20,165)
137,615
15,285
65,897
(3,298)
203,512
-
15,285
16,867
117,451
65,897
183,348
65,188
(18,209)
(400)
(326)
36,515
-
65,063
(17,933)
(4,703)
(106)
32,359
2,448
171,855
(47,548)
(6,531)
(432)
80,322
2,448
18,257
16,180
40,161
-
1,224
1,224
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
7
1
(in thousands of USD)
Asset
At December 31, 2017
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
Kingswood Co.
Ltd
50 %
629
-
-
-
-
-
111
-
518
259
-
259
-
-
-
-
-
(2)
-
(1)
-
Seven Seas
Shipping
Ltd
50 %
-
-
993
689
629
-
91
-
273
137
-
137
-
61
-
-
-
130
-
65
-
TI Africa
Ltd
TI Asia
Ltd
50 %
182,298
171,612
12,639
4,062
200,231
-
766
-
(6,060)
(3,030)
100,115
-
97,085
61,015
(18,209)
(90)
383
34,269
-
17,135
-
50 %
175,826
164,587
10,521
1,968
128,653
-
687
-
57,007
28,503
62,647
28,503
62,647
58,011
(17,933)
(1,961)
(3,359)
25,467
966
12,734
483
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 ULCC vessels, the TI Asia and the TI
Africa respectively from Euronav and International Seaways, Inc. (formerly "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. The tranche related to FSO Asia
matured in 2017 and had a rate of Libor plus a margin of 1.15%. The tranche related
to FSO Africa matured in August 2013 with a balloon of USD 45.0 million and had a
rate of Libor plus a margin of 2.25%. In 2013, the Africa Tranche was extended until
2015 and on August 28, 2015 it was fully repaid.
All bank loans in the joint ventures are secured by the underlying FSO.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Tankers
Agencies (UK)
Ltd. (see Note
23)
50 %
363
-
149,650
1,889
-
-
147,453
43,000
2,560
1,559
-
1,559
-
-
-
-
-
-
-
-
-
Asset
Liability
TI LLC (see
Note 23)
Total
Africa Conversion
Corp
Asia Conversion
Corp
Total
50 %
98
-
1,108
-
-
-
975
-
232
136
-
136
-
-
-
-
-
-
-
-
-
359,214
336,199
174,912
8,608
329,514
-
150,083
43,000
54,530
27,565
162,762
30,595
159,732
119,087
(36,142)
(2,052)
(2,976)
59,865
966
29,932
483
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, 2017
December 31, 2016
Curr. Nominal
interest
rate
USD
libor
+1.15%
Year of
mat.
Facility
size
Drawn Carrying
value
Facility
size
Drawn Carrying
value
2017
-
-
-
-
75,343
75,343
75,343
75,343
75,343
75,343
TI Asia Ltd. *
Total interest-bearing bank
loans
* The mentioned secured bank loans were subject to loan covenants such as an Asset Protection clause.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
8
1
Loan covenant
Because the tranche related to FSO Asia matured in 2017, loan covenants were no
longer applicable as at December 31, 2017.
Interest rate swaps
Two of the Group's JV companies in connection to the FSO conversion project of the TI
Asia and TI Africa 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
were used to hedge the risk related to any fluctuation of the Libor rate and had a
duration of 8 years starting respectively in July 2009 and September 2009 for FSO
Asia and FSO Africa.
Following the restructuring 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 affected profit or loss
of the joint venture as from 2010 through 2017.
However the hedge related to the financing of FSO Asia qualified fully as a hedging
instrument in a cash flow hedge relationship under IAS 39. This instrument was
measured at fair value; effective changes in fair value were recognized in equity of
the joint venture and the ineffective portion was recorded in profit or loss of the joint
venture.
Both IRSs matured in 2017.
Vessels
On June 2, 2016, the Group entered into a share swap and claim transfer agreement
(see Note 24). As a result, the Group became the full owner of the two youngest
vessels, the Captain Michael (2012 – 157,648 dwt) and the Maria (2012 – 157,523 dwt),
while Bretta became the full owner of the Devon and the Eugenie.
On November 23, 2016, Seven Seas Shipping Ltd. delivered the VLCC V.K. Eddie
(2005 – 305,261 dwt) to the Group after the sale announced on November 2, 2016
for USD 39.0 million. Seven Seas Shipping Ltd. recognized a gain of USD 9.3 million
on this transaction in the last quarter of 2016. In the Group’s consolidated financial
statements, 50% of this gain was eliminated.
There were no capital commitments as of December 31, 2017, December 31, 2016
and December 31, 2015.
Cash and cash equivalents
(in thousands of USD)
Cash and cash equivalents of the joint ventures
Group's share of cash and cash equivalents
of which restricted cash
2017
8,608
4,304
-
2016
64,074
32,037
6,789
Note 26 - 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 2016 the Group entered into a share swap and claim transfer agreement whereby
the Group’s equity interest in both Fiorano Shipholding Ltd. and Larvotto Shipholding
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Ltd. increased from 50% to 100%.
In the fourth quarter of 2017, Euronav NV incorporated a new subsidiary, Euronav MI
Inc.
This subsidiary was incorporated in connection with the intended merger with Gener8
Maritime, Inc. (Note 24) and did not have any activities as at December 31, 2017.
Note 27 - Major exchange rates
The following major exchange rates have been used in preparing the consolidated financial statements:
closing rates
average rates
1 XXX = x,xxxx USD
December 31,
2017
December 31,
2016
December 31,
2015
2017
2016
2015
EUR
GPB
1.1993
1.3517
1.0541
1.2312
1.0887
1.4833
1.1249
1.2880
1.1061
1.3662
1.1154
1.5315
Note 28 - Audit fees
The audit fees for the Group amounted to USD 0.9 million (2016: USD 1.0 million
and 2015: USD 0.7 million). During the year the statutory auditor and persons
professionally related to him performed additional audit related services amounting
to USD 0.0 million (2016: USD 0.0 million and 2015: USD 0.2 million) and tax services
for fees of USD 0.0 million (2016: USD 0.0 million and 2015: 0.0 million). The 2015
audit related services mainly related to the Group's series of capital transactions,
including the Group's US listing.
Note 29 - Subsequent events
No events occurred subsequent to December 31, 2017 that would require adjustment
to or disclosure in these consolidated financial statements.
Note 30 - Statement on the true and fair view of the
consolidated financial statements and the fair overview of
the management report
Mr. Carl Steen, Chairman of the Board of Directors, Mr. Patrick Rodgers, CEO and
Mr. Hugo De Stoop, CFO, hereby certify that, to the best of their knowledge, (a) the
consolidated financial statements as of and for the year ended December 31, 2017,
which have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union, give a true and fair view of
the assets, liabilities, financial position and results of Euronav NV and the entities
included in the consolidation, and (b) the annual report includes a true and fair
view of the evolution of the activities, results and situation of Euronav NV and the
entities included in the consolidation, and contains a description of the main risks
and uncertainties they may face.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
3
8
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
Statutory auditor’s report to the general meeting of Euronav
NV on the consolidated financial statements as of and for the
year ended December 31, 2017
In the context of the statutory audit of the consolidated financial statements of
Euronav NV (“the Company”) and its subsidiaries (jointly “the Group”), we provide
you with our statutory auditor’s report. This includes our report on the audit of the
consolidated financial statements for the year ended December 31, 2017, as well as
our report on other legal, regulatory and professional requirements. These reports
are one and indivisible.
We were appointed as statutory auditor by the general meeting of May 11, 2017, in
accordance with the proposal of the board of directors issued on the recommendation
of the audit and risk committee. Our mandate will expire on the date of the general
meeting deliberating on the annual accounts for the year ended December 31, 2019.
We have performed the statutory audit of the consolidated financial statements of
Euronav NV for 14 consecutive financial years.
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Unqualified opinion
We have audited the consolidated financial statements of the Group as of and for
the year ended December 31, 2017, 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, 2017, 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
2.810.973 and the consolidated statement of profit or loss shows a profit for the year
of USD ‘000 1.383.
In our opinion, the consolidated financial statements give a true and fair view of the
Group’s equity and financial position as at December 31, 2017 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.
Basis for our unqualified opinion
We conducted our audit in accordance with International Standards on Auditing
(“ISAs”). Our responsibilities under those standards are further described in
the “Statutory auditors’ responsibility for the audit of the consolidated financial
statements” section of our report. We have complied with the ethical requirements
that are relevant to our audit of the consolidated financial statements in Belgium,
including the independence requirements.
We have obtained from the board of directors and the Company’s officials 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 opinion.
Key audit matter
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the consolidated financial statements of the current
period. These matters were addressed in the context of our audit of the consolidated
financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Impairment of vessels
We refer to Note 8 of the consolidated financial statements and to the accounting
policies in Note 1.2(k) of the consolidated financial statements.
Description
As at December 31, 2017, the carrying value of the Group’s vessels was USD ‘000
2.271.500.
The Group assessed whether indications existed at December 31, 2017 that the
carrying value of vessels may be impaired.
Next, the Group estimated the recoverable amount as at December 31, 2017 for each
of the smallest groups of assets that generate largely independent cash flows (the
cash-generating units or “CGUs”).
Euronav defines its CGUs 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 CGU.
The Group determined the recoverable amount of each CGU as the greater of the
CGU’s value-in-use (“VIU”) and its fair value less costs to sell.
The Group concluded that the recoverable amount of each CGU exceeded the CGU’s
carrying value at December 31, 2017 and consequently, that no impairment loss
needed to be recorded as at December 31, 2017.
Determining the amount of impairment losses, if any, to be recorded requires the
Group to exercise significant judgment and make important assumptions, particularly
in relation to
• the determination of the Group’s CGUs;
• the estimation of a CGU’s fair value less costs to sell; and
• the estimation of a CGU’s value-in-use, including the estimation of vessels’
remaining useful lives, future freight rates or hire rates, future operating
expenses and the applicable discount rates.
We identified impairment of vessels as a key audit matter because the carrying
values of these assets are material to the consolidated financial statements and
also because of the significant management judgment and estimation required
in assessing potential impairment which could be subject to error or potential
management bias.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
5
8
1
Our audit procedures
Our audit procedures to assess potential impairment of vessels included the
following:
• Assessing the design, implementation and operating effectiveness of the Group’s
key internal controls over the assessment of vessel impairment;
• Challenging the Group’s assessment of potential indicators of impairment based
on our own expectations developed from our knowledge of the Group and our
understanding of internal and external factors relevant to the Group, the Group’s
business and the industry in which the Group operates;
• Assessing the Group’s identification of cash-generating units (“CGUs”), with
reference to our understanding of the Group’s business and the requirements of
the prevailing accounting standards;
• Assessing whether vessels were operating in a pool at December 31, 2017, with
reference to externally obtained vessel pooling information;
• Assessing the Group’s VIU calculations for each vessel by comparing the
assumptions used by the Group with our understanding of the Group’s business
and the industry in which the Group operates, in particular for the assumptions
relating to vessels’ remaining useful lives, forecast freight rates and hire rates
and forecast vessel operating expenses;
• Challenging the Group’s use of 10-year historical average freight rates in its
VIU calculations based on our understanding of the Group’s business and the
industry in which the Group operates, as well as by comparing the Group’s
assumptions to those used by other companies in the same industry;
• Comparing the forecast freight rates and vessel operating expenses used in the
Group’s VIU calculations to actual freight rates earned by the Group and actual
vessel operating expenses incurred by the Group in recent years;
• Specifically with respect to the FSO vessels operated by 2 of the Group’s joint
ventures, assessing the remaining useful life and forecast hire rates used in the
Group’s VIU calculations with reference to time charter contracts in place for
these vessels;
• With the assistance of our internal valuation specialists, comparing the discount
rates applied in the VIU calculations with externally derived data as well as with
discount rates adopted by other companies in the same industry;
• Performing sensitivity analyses on the discount rates applied and the forecast
freight rates and hire rates used by the Group to assess what changes thereto
would result in a different conclusion being reached, and assessing whether
there were any indications of management bias in the selection of these
assumptions.
Furthermore, we assessed the appropriateness of the Group’s disclosures in respect
of vessel impairment, which are included in Note 8 of the consolidated financial
statements.
Board of directors’ responsibilities 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
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.
In preparing the consolidated financial statements, the board of directors is
responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the board of directors either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
Statutory auditor’s responsibilities for the audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance as to whether the consolidated
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of the users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also perform the
following procedures:
• Identify and assess the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
• Obtain an understanding of internal controls relevant to the audit 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;
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by board of directors;
• Conclude on the appropriateness of board of directors’ use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention
in our auditors’ report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Group to
cease to continue as a going concern;
• Evaluate the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated
financial statements represent the underlying transactions and events in a
manner that achieves fair presentation;
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
7
8
1
• Obtain sufficient appropriate audit evidence regarding the financial information
of the entities or business activities within the Group to express an opinion on
the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
We communicate with the audit and risk committee regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the audit and risk committee with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
For the matters communicated with the audit and risk committee, we determine
those matters that were of most significance in the audit of the consolidated
financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter.
REPORT ON THE OTHER LEGAL, REGULATORY AND PROFESSIONAL
REQUIREMENTS
Responsibilities of the board of directors
The board of directors is responsible for the preparation and the content of the board
of directors’ annual report on the consolidated financial statements and the other
information included in the annual report.
Statutory auditor’s responsibilities
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, the board of directors’ annual
report on the consolidated financial statements and the other information included
in the annual report, and to report on these matters.
Aspects concerning the board of directors’ annual report on the consolidated
financial statements and other information included in the annual report
Based on specific work performed on the board of directors’ annual report on the
consolidated financial statements, we are of the opinion that this report is consistent
with the consolidated financial statements for the same period and has been
prepared in accordance with article 119 of the Companies’ Code.
In the context of our audit of the consolidated financial statements, we are also
responsible for considering, in particular based on the knowledge gained throughout
the audit, whether the board of directors’ annual report on the consolidated financial
statements and other information included in the annual report:
• Shareholder letter, Quick facts, Highlights and Special Report
• Corporate Report
• Activity Report
• Corporate Social Responsibility
contain material misstatements, or information that is incorrectly stated or
misleading. In the context of the procedures carried out, we did not identify any
material misstatements that we have to report to you. We do not express any form
of assurance on the board of directors’ annual report on the consolidated financial
statements and other information included in the annual report.
Information about the independence
• Our audit firm and our network have not performed any engagement which is
incompatible with the statutory audit of the consolidated accounts and our audit
firm remained independent of the Group during the term of our mandate.
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
• The fees for the additional engagements which are compatible with the statutory
audit referred to in article 134 of the Companies’ Code were correctly stated and
disclosed in the notes to the consolidated financial statements.
Other aspect
• This report is consistent with our additional report to the audit and risk
committee on the basis of Article 11 of Regulation (EU) No 537/2014.
Zaventem, April 3, 2018
KPMG Bedrijfsrevisoren / Réviseurs d’Entreprises
Statutory auditor
represented by
Götwin Jackers
Réviseur d’Entreprises / Bedrijfsrevisor
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
9
8
1
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
STATUTORY FINANCIAL STATEMENTS EURONAV NV
For the period ending on 31/12/2017
(in USD)
ASSETS
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
Capital and reserves
Capital
Share premium account
Reserves
Profit carried forward
Provision for liabilities and charges
Provisions and deferred taxes
Creditors
Amounts payable after one year
Amounts payable within one year
Accrued charges and deferred income
December 31, 2017
December 31, 2016
2,239,821,475
55,841
2,014,576,306
225,189,328
244,244,671
-
93,096,932
103,106,293
18,010,779
30,030,667
2,439,610,624
147,151
1,794,657,956
644,805,516
270,371,167
-
126,712,521
58,317,989
68,793,482
16,547,175
2,484,066,146
2,709,981,791
1,662,992,477
173,046,122
1,215.227,175
119,195,927
155,523,253
2,890,028
2,890,028
818,183,640
672,971,576
122,828,599
22,383,466
1,707,121,377
173,046,122
1,215,227,175
119,195,927
199,652,153
1,621,834
1,621,834
1,001,238,580
834,515,103
142,408,234
24,315,242
Total liabilities
2,484,066,146
2,709,981,791
STATUTORY FINANCIAL STATEMENTS EURONAV NV (CONTINUED)
(in USD)
December 31, 2017
December 31, 2016
INCOME STATEMENT OF EURONAV NV
Operating income
Operating charges
Operating result
Financial income
Financial charges
Profit for the year before taxes
Income taxes
Result for the year
Result for the year available for appropriation
APPROPRIATION ACCOUNT
Result to be appropriated
Transfer to capital and reserves
Profit carried forward
Distribution of result
510,328,924
(523,322,912)
(12,993,988)
31,812,973
(39,649,825)
(20,830,840)
(4,192,986)
(25,023,826)
(25,023,826)
174,628,326
-
155,523,253
19,105,074
669,498,406
(526,102,646)
143,395,760
12,922,237
(41,474,177)
114,843,820
(2,906,354)
111,937,466
111,937,466
330,141,587
7,898,543
199,652,153
122,590,891
T
R
O
P
E
R
L
A
C
N
A
N
F
I
I
1
9
1
NOTES
NOTES
NOTES
NOTES
NOTES
REGISTERED OFFICE
De Gerlachekaai 20
B-2000 Antwerp - Belgium
tel. + 32 3 247 44 11
fax + 32 3 247 44 09
e-mail admin@euronav.com
website www.euronav.com
RESPONSIBLE EDITOR
Hugo De Stoop
De Gerlachekaai 20
B-2000 Antwerp - Belgium
Registered within the jurisdiction of
the Commercial Court of Antwerp -
VAT BE 0860 402 767
Dit verslag is ook beschikbaar in
het Nederlands.
This report can be downloaded on
our website: www.euronav.com