Euronav cancels VLCC options

Euronav, the current darling of tanker analysts, has issued its third quarter results with a net profit for the three-month period hitting $72.2m, a dramatic turnaround from the same period last year when the Belgian firm registered a $20.6m loss.

Euronav also announced it would not exercise options for four VLCCs from a June deal this year. Euronav paid Greece’s Metrostar Management $96m per vessel or $384m in total for four VLCC newbuildings being built at Hyundai Heavy Industries this summer. The options with the deal were for delivery in 2016 and 2017.

“These late delivery windows were the reason for management to sign an option rather than including these vessels in the acquisition at that time. The value of the option was to have a sort of hedge against any significant vessel price inflation, which in the meantime has not materialized,” Euronav said in a release. The value of these options has been written off to zero and a $8m non-recurring charge has been taken for Q3.

On the markets, Paddy Rodgers, Euronav’s ceo, commented: “The winter market has started very strongly.”

The decision to scrap the options will be another blow to South Korea’s Hyundai Heavy Industries, already reeling from a depleted orderbook thanks to the depressed offshore scene.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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