Euronav NV (NYSE:EURN) Q2 2023 Earnings Call Transcript

Euronav NV (NYSE:EURN) Q2 2023 Earnings Call Transcript August 3, 2023

Euronav NV misses on earnings expectations. Reported EPS is $0.8 EPS, expectations were $0.87.

Operator: Good day, and welcome to the Euronav Second Quarter 2023 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Gallagher. Please go ahead.

Brian Gallagher: Thank you. Good morning, and afternoon to everyone, and thanks for joining Euronav’s Q2 2023 earnings call. Before I start, I’d like to say a few words. The information discussed on this call is based on information as of today, Thursday, the 3rd of August 2023, and may contain forward-looking statements that may involve risks and uncertainties. Forward-looking statements reflect current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events, performance, underlying assumptions and other statements, which are not statements of historical facts. All forward-looking statements attributable to the company or to persons acting on its behalf are now expressly qualified in their entirety by reference to the risks, uncertainties and other factors discussed in the company’s filings with the SEC, which are available free of charge on the SEC website at www.sec.gov and on our own company website at www.euronav.com.

You should not place undue attention or reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the company undertakes no obligation to publicly update or revise any forward-looking statements. Actual results may differ materially from these forward-looking statements. Please take a moment to read our safety — our Safe Harbor statements rather on Page 2 of the slide presentation. I will now pass on to our Interim Chief Executive and CFO, Lieve Logghe, to start with the conference slide on Slide 3. Lieve, over to you.

Lieve Logghe: Thank you, Brian, and good morning or afternoon to wherever you are, and welcome to our call. I will run through the Q2 highlights and financials before passing back to Brian, our Head of Investor Relations and Communications, to provide some further wider market thoughts. I will return to summarize the outlook. The current year continues to confound tanker market convention. It would be more usual to be discussing Q2 in context [Technical Difficulty] slowdown in freight activity and refinery maintenance programs. However, the freight market for Q2 was very similar in outcome to Q1. This included a spike in rates towards the end of the quarter, reflecting a relative tight dynamic between supply of vessels and demand for crude movements.

What these results also underline is the value of the Euronav platform and its striking ability to harness this market dynamic for the benefit of shareholders. This was our best ever Q2 operating performance outside the COVID pandemic. I’ll say a bit more about operating leverage in a minute. With a new Supervisory Board in place, a strong balance sheet and good visibility on very positive medium-term fundamentals, Euronav investors stand to continue benefiting in dividend terms. The Q2 dividend of $0.80 per share reflects Board’s confidence in the Euronav platform and the strength of the current and upcoming tanker cycle. Turning now to the financials in more depth. This slide reflects the strength of the Euronav platform financially, operationally and strategically.

Operationally, the operational leverage is reflected in strong returns with a net profit at 168 — excuse me, $161.8 million similar to Q1 results. Financially, balance sheet leverage is at 47.5%. The finance team has further boosted our liquidity with a new facility to $742 million. Last but not least, strategically, the Euronav platform continues to grow. During the first half, we have added 3 brand new VLCCs with maximum optionality to deal with the challenges of fueling tankers going forward. Last month, we took delivery of a new Suezmax and look forward to adding 4 more such vessels in the next 12 months at the start of what we have consistently said over the past year is what we believe to be a multi-year upcycle for the large crude tanker markets.

With that, I will now pass it over to Brian to give some further thoughts on the current market cycle.

Brian Gallagher: Thank you, Lieve. Tanker markets as always remained very dynamic, but in our sense, also very constructive. Forecast for oil demand have continued to grow consistently over the last 9 months to 10 months, and this is illustrated on Slide 8. The IEA forecast consistent upgrades to this number, and this has supported tanker markets along with positive ton mile development. On the left-hand side, you can see the loadings West of Suez and therefore, heading to the Far East, have continued to grow and the expense of those coming in every direction. Put very simply, crude is traveling much further than it was previously and that’s helping to drive a higher demand for shipping even if consumption and production are at similar numbers.

On Slide 9, we now move to a project which we’ve been involved in over the recent months, and operationally, we continue to be engaged with off the Yemeni coast. The salvage of the FSO Safer off the Yemeni coast is a critical mission that Euronav has provided a VLCC to the UN in order to take the excess 1.2 million barrels of oil away from this particular site. This careful exchange is currently ongoing with Euronav continuing to provide operational support and staff to the wider salvage operation. We have been proud to be involved in this operation and hope it will conclude successfully in the coming weeks. We now turn on Slide 10 to an issue which continues to arise in the minds of oil market and tanker investors alike, Iran. On Slide 10, we refer to the recent speculation that again we surfaced in May regarding Iran and a potential deal involving the nuclear talks and a return to a more normal oil market engagement for the country.

We believe it is important to remind investors of the outsized effect this would have on the tanker markets, should these events occur either in partial or for total terms. As the chart on Slide 10 on the left-hand side shows, Iran has ramped up production to a 5-year high at around 1.5 million barrels per day. Most of this production is being exported by the dark fleet. If, and it remained a very big if, Iran were to return to the world economic order and it permitted to export crude via commercial tonnage, this would imply around 1.5 million barrels per day of export opportunity that is currently denied commercial players like Euronav. This is likely to expand as the right-hand side of the chart shows, as Iran has recently — as in 2017, been producing up to 3.5 million barrels per day of crude.

Iran remains one of the few nations capable of expanding production relatively quickly. So again, whilst it remains a big if, and the world — but the world — I’m sorry, I’ll start again. So whilst it remains a big if, the world is already consuming this Iranian oil. Any production uplift from here would increase the net supply for global consumption. However, the shipping [now], the effect is far larger and this would benefit from the 1.5 million barrels per day currently being consumed that it cannot access, and any increase on this would also benefit tanker markets exponentially. Clearly, some of this shipping would come from Iran’s own fleet, but Iran’s return remains a potential seismic positive for tanker markets and should not be forgotten.

With that, I will turn it back to Lieve for any summary comments and I’ll focus on the traffic lights. Lieve, back to you.

Lieve Logghe: Thanks, Brian. Q2 was the second best quarter for rates since 1990. In VLCC terms, it was the seventh best. This gives context to how well underpinned and strong our markets are. Demand continues to remain robust supported by ton mile growth. OPEC cuts are beginning to gain traction but the impact needs to be seen against stronger seasonal demand, which we expect from later this current quarter. We’ve made no change to our traffic lights, but anticipate a positive seasonal trading pattern to emerge for this winter. So to sum up, the Euronav platform is in a robust shape. We are positioned for further growth and have a balance sheet to support further strategic opportunities as they arise. And in the meantime, the platform is delivering returns to shareholders via dividends.

All of this means that we can look to the future with confidence. And with that, Brian and I will be very happy to take your questions. So I’ll hand it back to the operator for the Q&A.

Q&A Session

Operator: [Operator Instructions] And our first question comes from Jon Chappell from Evercore ISI.

Jon Chappell: Lieve, first question for you. I’m sure the answer is, it’s a Board decision on a quarterly basis. However, noteworthy that the payout ratio has moved up to 100% this quarter, not just within the context of your liquidity being so strong and the market being as robust as it is, but also with the new Board members’ intel. So should we read this since being a one quarter anomaly and we’ll take it as it goes? Or is this maybe the view of the new Board that given the market strength, the payout ratio could be above the 80% threshold?

Lieve Logghe: Hi, Jon. Good to hear you. So indeed a very good question. We don’t know if it’s a one-off, but the Supervisory Board clearly has made a decision based on our current LTV, which is 30%. And they don’t see bad days coming. So based on that the Q2 payout ratio was 100%. If this continues, it’s something that we have to see and have a look at indeed in Q3. But as you rightfully mentioned, in the past it was an 80% payout ratio. And we looked at what Q3 brings. Absolutely, it’s like you say, it’s the Supervisory Board decision. We propose but it’s in the end Supervisory Board representing the shareholders who are taking the decisions and there you have our independent shareholders but you also — board members, but also our undependent board members, who are representing the minority shareholders. So it’s a common decision, which is taken each quarter.

Jon Chappell: Okay. For my follow-up, Brian, as it relates to the back half outlook. So these Saudi cuts, it seems like they’re finally biting from an output perspective, but maybe not so much on the tanker rates. How much of this is what’s called substitution as you laid out kind of on Slide 8? And how much of it is more of the fact that just the demand is improving at a greater pace than people had expected and there’s probably a little bit of inventory build ahead of the winter in the Northern Hemisphere?

Brian Gallagher: I think it’s both of those, Jon, but I think we factor in another situation, which is we felt there’s been some buyers of the dark trade who’ve been warned off. There’s been some sort of a crackdown every now and then in China and in India and that they’ve come back into the commercial fleet as it were, so that they’re buying barrels from a more conventional sources and being shipped both from commercial players like us. They were not trading with us, obviously, we’ve not been doing those trades anyway, obviously, as you know. But those buyers of the dark trade, I think has been a third factor which is offset. So you’ve had ton miles and those 2 factors that you said along with this sort of people jumping across the fence from the dark trade. So I think that’s really negated almost all of the cuts that we’ve seen so far.

Operator: The next question comes from Amit Mehrotra from Deutsche Bank.

Chris Robertson: This is Chris Robertson on for Amit. How are you doing?

Lieve Logghe: Hi, Chris. Good to hear you.

Chris Robertson: Yes, you as well. The question for either of you. This is just around the cash breakeven levels currently for the company. So if you could just walk through that.

Lieve Logghe: Yes. So I’m the number cruncher here. So just the numbers, to give you an insight in this, Chris. So our Suezmax cash breakeven for the time being $16,000 and VLCC $19,000. So this is what we are currently having as a cash breakeven. The P&L breakeven was in the presentation, $18,000 Suezmaxes and $23,000 for VLCC.

Chris Robertson: Okay. Great. That’s straightforward. Brian, this might be a question for you. So over the past few days, we’ve heard some of the product tanker companies talking about their aging fleet, especially as it relates to LR2s. And they’ve mentioned a few times about 15-year-old LR2s potentially going dirty and coming into the crude trade at some point. I just wanted to get your thoughts around that. And is there any worry from your end? I know you guys don’t operate in the Aframax segment, but is there any worry on your end that that supply could be coming?

Brian Gallagher: Not unduly. I think we’ve always had a strong view that we’ve never really understood the view that there’ll be a lot of jumping between the 2 segments. And of course, its quite costly and operationally, you still have an asterisk against your name when you do flip between the 2 sectors. And there’s always some of the product guys that talk about more than the crude guys. We don’t really see anything of that. I still think, as you rightly said, we are not involved in the Aframax. You’ve got this potential another leg of growth for Aframax coming from the Canadian export market with some of — with the pipelines potentially opening there on the Pacific Coast. So, no, it’s not something what keeps us awake at night far from it. And we’ve always felt that any switching between the products and the crude is reasonably marginal and reasonably specialized. And the trends are too great really that we’re seeing to give us any sort of concern on that front.

Operator: The next question comes from Chris Tsung from Webber Research.

Chris Tsung: Good afternoon, Lieve and Brian. How are you?

Brian Gallagher: Good. Thank you.

Lieve Logghe: Good. Thank you.

Chris Tsung: I wanted to just ask about your fleet renewal. You guys have a few 17-year-old [Plus Vs] and Suezmaxes. Like, how do you think about that in an era of like firming asset prices?

Lieve Logghe: Here, we will continue on our strategy. So indeed if there is an opportunity, we will grasp it and indeed continue the pathway we had previously indeed selling and then taking opportunities for newbuilds to come in. For your information, you’ve read, so we still have 4 to come on the water Suezmaxes, often the [indiscernible] which has been delivered in July. So we continue that strategy going forward. And if there are opportunities, we remain interested and absolutely will propose this to our Supervisory Board.

Chris Tsung: Okay. Fair enough. And just as my follow-up. I noticed the G&A fell significantly. Is that more of an outlier? Or how should we think of it on like run rate going forward?

Lieve Logghe: Yes, good question. Indeed, we touched upon it also last time. Our G&A is still a bit loaded with what we call corporate cost fee. In the first quarter, we still had those legal costs, which were kicking in and also in Q2 we still have some extra load there. But indeed, it goes into the good direction. It’s absolutely a very clear focus for us to have that cost under control as much as possible. But good shot.

Operator: The next question comes from Chris Wetherbee from Citigroup.

Unidentified Analyst: This is Matt on for Chris. If we could just go over to the red light, green light chart and just thinking about the demand for crude, specifically as you think about the state of the global macro playing out. Just wanted to get your sense of the puts and takes about the remainder of 2023 regarding any incremental changes that you might see specific to China as they attempt to emerge from a little bit of a weaker economic period. I know you noted in the past that China is a crucial swing factor. So I just wanted to hear any thoughts there as well as how Iran could play into the scenario.

Brian Gallagher: Yes. Good question. I mean, there’s 3 things on the China side is that, clearly, from our perspective, we don’t see the Chinese just buying from an economic GDP perspective. That’s clearly a very important part of what they’re doing. The second factor, which we think is not being probably focused on partly because it’s very hard to get some numbers is they continue to buy from rationale from a strategic perspective. So they’re still building reserves. And the third element is, obviously, there is a very strong chain of refinery expansion in that country, which needs the crude as a feedstock to be then repatriated as diesel and other products back into the global markets. So there’s a diversity to the Chinese angle, which we think gives it a certain amount of resilience.

But again, your guess is as good as ours in terms of if they’re going to have a substantial slowdown from here. But we’re not seeing any entity of that and we get a lot of confidence from those 3 factors. I think all of us, all in the call from 6 months ago are surprised how resilient the global GDP background has been. And again, that’s been sort of reasonably well documented and has underpinned and you’ve seen that in our presentation with the IEA upgrading almost consistently since November. And I’ve noticed a number of investment banks have upgraded this the last few weeks. And with regard to Iran, it’s not something that we are sort of hanging our hats on. It was just a — it’s just a fact that it’s just — it’s a story that refuses to go away.

We were surprised than anyone a few weeks ago when we saw it sort of being talked about. And of course, because it’s a source of quite rapid production growth potentially and then now turning into exports, but it could happen. There could be some sort of a deal which would mean Iran would come back into the fold. And I think you just — we needed — we wanted to test investors and commentators to make sure that they are aware of how outsized the impact would be on tanker markets. It would have a much bigger impact on our market than it would on oil markets. So round trip, yes, we feel that there are a number of resilient themes with regard to the outlook for crude demand and that’s been reflected short-term in the pricing of crude but also in particular as we see from our specific market, very good freight rates in what is traditionally a very, very quiet time of the year.

Unidentified Analyst: Fantastic and really appreciate that. And then just following up on the Iran comment. Is there sort of any type of timeline that you guys would be sort of eyeballing in terms of when that potential benefit could come online? And then what exactly would that — how exactly would that translate for Euronav specifically?

Brian Gallagher: No, no. We’ve got no timeline. I mean I don’t want anyone on the call to think we’ve got a hotline to Mr. Biden or anything. But no, it’s more to flag the potential changes that could happen. It’s obviously the fact that there are very relatively few sources that can be tapped to immediately increase the supply of oil. And with the war against the inflation, that could become a very important sort of factor. In terms of timelines on backgrounds to that, no, there’s no sense of when it would happen, how it would impact on Euronav and other commercial players in the quoted space like ourselves is that you’re opening up barrels, which are currently not available to us. If they are available to be shipped by Iran — sorry, if we are able to ship from Iran, then that’s 1.5 million barrels per day of potential market, which is completely blocked away from all of us on the commercial side at the moment.

That’s the reason to flag it. But look, it’s a black swan if you like, a positive one, but one which we don’t have anymore — any greater visibility than anyone else. But we felt it was worth flagging given it’s been a story which has sort of risen out of nowhere earlier in Q2.

Operator: The next question comes from Omar Nokta from Jefferies.

Omar Nokta: I just wanted to ask about how things are kind of operating from a corporate standpoint. Clearly, from the results today, things look like they’re running quite well, but just wanted to ask given all the changes that have been taking place with Hugo gone and the new Supervisory Board in place. Has there been any changes in how the business Euronav is running day to day? And really, how involved is the new Board with management’s decision-making?

Lieve Logghe: So Omar, indeed — good afternoon. To tell you, indeed, the focus of the current team remains very well on the strategy as always run in the past. So this is, at least very, very clear for everyone working at Euronav also for our stakeholders in there. And then the new Supervisory Board currently gives us a positive dynamic. I think it’s professional and contributive in the sense that the current or the new Supervisory Board is challenging us in terms of costs, fleet renewal. And for sure, they are wanting us to be the best compared to competition. And this gives us a positive dynamic making us very focused on the way forward. And hence you saw the results [indiscernible] robust and even beating expectations there. So from that perspective, I think it’s a very positive plus that we could mention here.

Omar Nokta: Okay. That’s good color. Because I was just going to ask just sort of strategically about where you see Euronav heading. Obviously, you mentioned the strategy and whether it’s disposable — disposal of assets looking at new buildings. I did want to maybe ask, is there some kind of a — is the restructuring of Euronav a foregone conclusion do you think? Or can the business sort of operate as it is? And is there perhaps maybe a strategic big picture that’s going to be announced here in the next, perhaps few quarters or few months that says, okay, this is what Euronav plans to do going forward, here is our new strategy. Is there anything like that that’s on the horizon based off of your conversations with the management team and the Board? How would you kind of characterize whether Euronav is strategically here in the coming months?

Lieve Logghe: So, Omar, seeing from that perspective, and I can understand the question because this is, I think, a lot of the shareholders and stakeholders here having that question on the top of their mind. But here, I can confirm to you that apparently, currently there is absolutely no change in strategy. We run the vertical integrated platform it’s delivering, and this is where we continue our journey. And in case, I could imagine if there is a change, we will be informed and everything will be announced directly to the market. But for the time being, no changes. We continue and we enjoy the current upcycle. This is very standing for. And I cannot say more here than we continue the journey with the teams we have and the strategy which is in place.

Omar Nokta: No, that’s helpful color. I just — obviously, very sensitive questions and sensitive dynamic overall. I just wanted to hear how you viewed it. I’ll pass it over.

Operator: The next question comes from Frode Morkedal from Clarksons Securities.

Frode Morkedal: Could we discuss the — yes. Could we discuss the impact of Russian crude exports? How are the cuts from August affecting the market? And what’s your outlook for the situation going forward?

Brian Gallagher: Hi, Frode. it’s Brian here. Yes, as we mentioned before, we’ve seen some evidence that there’s been some, during Q2, buyers of what would previously been sort of dark trade or sanction trade from Russia and also India who jumped into the commercial play and engaged commercial tanker companies like ourselves and taken some barrels from more likely from the Atlantic than anywhere else. So there has been, as Jonathan said earlier, maybe a bit of a substitution effect. But that preceded any sort of real cuts that we’ve seen in production and exports from Russia. So that’s only sort of strengthening that trend. It’s not a trade we’re doing ourselves, obviously, as I’m sure you’re aware. And of course, with the pricing now with the crude underlying where it is against the euro’s pricing, we think that pressure is going to continue.

So I think what we would expect to see is that the dark fleet is going to sort of have to sort of shoulder more exaggerated elements of that trade disappearing, partly because they’ve been doing most of it themselves, but also partly because it’s an inefficient trade. We think a lot of those players will just sort of partnerships for a period of time. So we actually think there’s going to be a reasonably muted impact on the commercial players like ourselves for the time being unless those cuts become very, very profound and we don’t really see that outlook either. But — so for the moment, we think it’s going be a relatively limited impact on us.

Frode Morkedal: Okay. Are there any other reasons for the weaker Aframax and Suezmax rates you’ve seen now? How do you see those relative to VLCCs? They used to trade with a premium to VLCCs, right? And do you expect they’ll come back with that premium or that’s now behind us?

Brian Gallagher: Over time, we would expect that longer-term as you say medium-term market sort of structure and profile to return whether [Vs] would be more leading. We felt that Vs has been fighting back as a sub-sector. They’ve been more and more involved in the STS trades, transfer trades and taking some of that oil ultimately to China or into India. And we would expect to see the fact that we are seeing very long haul trades beginning to develop on a substitution basis from the Atlantic to the Far East that, that would reestablish itself. We’re still going to be see pockets, as you mentioned before. The Aframax still feels reasonably well positioned to us with some new growth opportunities in particular coming from Canada.

But the Suezmax will be somewhere in between. But this isn’t going to be an instance sort of re-establishment of that orderly market. I think it’s going to take another — we think it’s going to take another 6 to 12 months when we see that. But we’re very comfortable in the view that with the Vs will sort of reassert, there are pre-eminence probably more likely in 2024.

Operator: The next question comes from Ben Nolan from Stifel.

Ben Nolan: So a couple. The first is, I believe that there has been an expansion of Corpus just recently — an expansion of some of the Corpus Christi export capacity that enables greater loading for VLCCs, which removes a little of the reverse lightering dynamic. Just trying to think through, Brian, if you guys have considered sort of what — how we should think about or how you think about the impact of that? Is it draw in more Vs and thus help the market? Or does the inefficiency of reverse lightering sort of offset that?

Brian Gallagher: No, I think it’s the same as before, Ben, in particular, from where we were, if you go back to the ancient times, sort of 2017, ’18, when there was like an arms race between each of the locations down there with Corpus Christi being one of the most prominent ones. We think it’s sort of reestablishing itself now as a theme. I mean we’re consistently now in the high 4s, low 5 million barrels per day of U.S. exports. So now we think it’s going to become a new growth [road]. And the good news for commercial sector and in particular in those quoted companies is that, as you know, it’s a reasonably focused market and the players that can enjoy that market are those big commercial players like ourselves. So, no, we feel that’s a trend that’s really beginning to reassert itself again.

And as we know that the marginal exports or margin — sorry, production of U.S. crude is being exported. So, no, it’s a bit of a reheating and we actually did a paper in this in one of our annual reports, so I think it was in 2017. A lot of that was obviously taken away with COVID, but a lot of those things we worried about, Ben, we are relevant today again.

Ben Nolan: Okay. And then as it relates to the Advisory Board and I appreciate it, a, there is some degree of this — we’ll see how it plays out. But — and thinking about the fleet and acknowledging that it’s business as usual. But is it fair to assume that in the near term there’s probably unlikely to be any material changes in the fleet mix between — other than the new buildings just you’re not really being active in buying or selling anything? Is that a fair assumption?

Lieve Logghe: Ben, again, I have a bit to repeat myself. Our Board members, and this is really a plus, have a strong understanding of our business. And they have an interest in maximizing value for Euronav and all its investors including themselves for sure. But here we are confident that if we come with good files, good things that there will be ears and eyes on a decision taken. So from that perspective, also, I only can reiterate what I’m saying is that having the Supervisory Board currently that if we come with good topics, they are absolutely supportive and they’ll contribute to the net bottom line.

Operator: [Operator Instructions] And the next question comes from Thijs Berkelder from ABN AMRO – ODDO BHF.

Thijs Berkelder: Yes. Congratulations with the beautiful performance, especially you, Lieve, showing well as Interim or ad Interim CEO. Can you maybe give us a bit of an update on how we should look at the procedure of finding or appointing a new CEO and whether you are part of that procedure?

Lieve Logghe: Thijs, first of all, good afternoon. So indeed, for your information, the interim position continues. And honestly, we don’t ask the question or raise the question. We have now a bit of confidence because of the good results and thanks to the team. This isn’t only me, but this is the full Euronav team. So — but for the time being, there is no urgency in one or the other direction. The team continues to be focused on the platform, delivering results for our shareholders. So seeing from that perspective, there is no urgency. And let’s see where it brings us. If we need to give a bit of reasonable time to all stakeholders to settle in and see what comes, but there is nothing on the horizon in one or the other direction, Thijs.

Thijs Berkelder: But it’s not that, let’s say, recruiters have been hired to find someone else or so?

Lieve Logghe: Not that I’m aware of, Thijs. I think here, not that I’m aware of, Thijs. No.

Thijs Berkelder: Okay. Then a follow-up question on potential changes in strategies. Is it possible or happening already right now that you propose FSO CapEx in other FSO classes than VLCC or Suezmax?

Lieve Logghe: Thijs, to be clear on this, we are Suezmaxes, VLCCs, so there we have absolute expertise. So you could imagine that if we go with files that this will be primarily oriented towards Suezmaxes, VLCCs. You never know that there is an interest in doing something else. But for the time being, we continue with our expertise what we have with the teams and which is very much focused on Suezmaxes and VLCCs.

Operator: The next question comes from Sherif Elmaghrabi from BTIG.

Sherif Elmaghrabi: I wanted to ask about forward bookings, almost half of Q3 has been fixed at about $45,000 for scrubber-fitted VLCCs. Can you remind us how much of your VLCC fleet has scrubbers? And is there a program to outfit the rest of the fleet over time?

Lieve Logghe: So currently, I see it as one Suezmaxes as well as the VLCCs. We will have 20 scrubber-fitted vessels on a total of about 70. So this is currently what we target. So a good diversification, well balanced from that perspective. So all our newbuilds having scrubbers. And we do indeed for some VLCCs who are below 10 years old, we have done some retrofitting with the scrubber. So in total 20 on the total fleet for the time being.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Lieve Logghe for any closing remarks.

Lieve Logghe: Thank you, Jason. So thank you to give me the opportunity to thank Brian and [indiscernible] to stand by my side for this call. I would like to thank the whole Euronav team for the quarter, which has been run very, very well and looking forward to what comes next. And I would like to thank all the listeners to this call for their interest in Euronav. I think as a concluding remark or a conclusion I can say the Euronav platform is well positioned to continue its journey for all its shareholders and taking advantage of the upcycle. Wishing you all a very good day and hear you next time. Thank you. Bye-bye.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.