Core Profit Surges Tenfold at Oil Tanker Firm Euronav
Euronav's core profit was more than ten times higher in the third quarter than in the same period last year as the recovery in large crude tanker freight rates accelerated, the Belgian oil tanker and storage operator said on Thursday.
The crude shipping market, which has battled with low earnings since the pandemic first hit oil demand, is now seeing freight rates recover, while this year's trade flow disruptions due to sanctions on Russia have driven shipping activity.
Chief Executive Officer Hugo De Stoop pointed in an earnings statement to "significant freight rate improvements" in the past few months, "well supported in all parts of the large crude tanker market".
Euronav's quarterly proportionate earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to $99.6 million from $9.1 million a year earlier. Its net result swung to a profit of $16.4 million, against a loss of $105.9 million in the same period last year.
The Organization of the Petroleum Exporting Countries and allies have come under growing pressure to pump more crude oil as Western sanctions enacted in response to the war in Ukraine have curtailed Russian oil exports.
The group, known as OPEC+, decided last month to cut its oil production target after weeks of lobbying against such a move by U.S. officials, concerned that gasoline prices would spike.
We believe that potential headwinds from OPEC production cuts will not translate into factors capable of disrupting the current momentum," De Stoop said. Euronav also said it had signed the final combination agreement with smaller Oslo-listed rival Frontline.
(Reuters - Reporting by Juliette Portala; Editing by Jason Neely and Mark Potter)