CMB.TECH NV Ordinary Shares

Thank you everyone and thank you for joining the CMB Tech earnings call for the fourth quarter of 2024. My name is Alexander Savris. I'm the CEO of the company and I'm joined by my colleagues Ludovic Savris, Enya Derkindrin and Joris Daman. We will talk about the financials and the highlights of the group, and then we will have a deep dive into every marine division and the market outlook division, ending, as always, with some concluding remarks and time to answer some of your questions. I'd like to hand it over now to our CFO, Ludovic.

Yes, thanks, Alex, and hello, everyone. Zooming in on the fourth quarter financials, we had strong results this quarter with a profit for the period of $93 million. This brings the full-year profits within CME Tech over $870 million. This is the second consecutive year that we are around these figures, which is, in our view, quite strong. I'm zooming in on the rest of the metrics we have. Our liquidity still stands at $281 million. Our contract backlog, which we'll dive in later, is still at $2.05 billion. The capex, we've taken a lot of deliveries of new building ships, is going down, but yet still is a $2.1 billion outstanding capex. And our financial covenants are all in order with a book equity on total assets of $30.5 billion. Again, highlighting some of the events in our quarter, the profits I've mentioned, we took delivery of seven new built vessels in Q4 and additional two vessels in Q1, which obviously is straight on our diversification and decarbonization strategy. At the same time, we sold some older, Swiss Max Vessels, the Selena, the Cap Victor, the Cap Felix in Q4, generating a nice capital gain of $71 million, as well as the Cap Lara, Swiss Max Vessels, and Alsace VLCC and Windcat 6 in Q1, generating again a capital gain of $46.5 million. The board decided not to declare a dividend for Q4. and as mentioned our contract backlog is at 2.05 billion on the right hand side you can see that 2024 was an active year for new build deliveries we had 20 new buildings delivering over the last 12 months moving into on the fleet on the water we have 115 vessels at the end of the fourth quarter on the water with another 46 new builds, from which 38 ocean-going vessels, which is the brunt of the 2.1 billion CAPEX remaining, 35 tankers, 10 bulkers, four container vessels, six chemical tankers, 54 CTVs on the offshore wind, and three tugboats and ferries. This will grow further in the next coming years, roughly 20 new buildings every year. Moving to the next slide. Here again, we want to highlight the detail of the contract backlog per division, but as well as the P&L breakeven, the results on a time charge equivalent for every division, but also what we have fixed already in Q1, as we've detailed in our press release. Here we zoom in on the current contract backlog that we have. We are working on a couple of few new projects, which hopefully will materialize in Q1. But nevertheless, you can see that we have close to a billion dollars on the tankers, a big contract backlog on the containers and the chemical tanks for respectively each half a billion dollars. This slide, as we show in every earnings presentation, could give you an indication on what the open days are in our company, the fixed and the total days. So we had about 18,500 days, shipping days in total for 2024. This is growing thanks to all the new build deliveries up to 27,000 days in 2026. where still roughly we have about 20-25% fixed, so contract cover for the remaining two years. I'll hand over the floor to Alex to zoom in on the various divisions we have.

Yes, thank you, Ludovic. I will take you through our five major markets, starting with an overview of where we are in the two biggest markets for CNB Tech right now, definitely on the spot side, which are the tankers and the dry bulk markets. What we have put on this slide is some negative catalysts in the market, but also some positive catalysts. Maybe starting on the positive side for tankers, for VLCCs and Suez Maxis, is of course the pressure on the dark fleet, the OFAC sanctions, and then possibly as well an increased enforcement of these sanctions and the impact it has on the normal fleet, of which of course Euronav, our tanker division, is part. On the dry side, on the positive side, We are expecting a reflation of the economy in China, which will also be focused on the property market, stabilize the property market, always good for iron ore. We also see increased supply of bauxite and iron ore coming out of Africa, which should be supportive for the markets. On the negative side, there is still uncertainty both on tanker markets and on dry bulk markets with a couple of elements. Highlighting on the tanker side the Chinese economy, which is an overruling element over the last couple of years, is how much will China continue to import or grow its imports of oil. On the dry bulk side, even though the iron ore story in general looks very promising, particularly in China, we are seeing quite high stockpiles, which could have a negative effect on the market. But all in all, when we take these two in balance, as you will see in the next couple of slides, we are nevertheless positive for these markets. On this slide, you can see a very nice picture of our brand new SuperEco Suezmax Orion, which was the last one to be delivered last year in October. And giving you a highlight of Euronav, of our tanker division. We have 14 VLCCs and 21 Suez Maxes on the water. We have another five VLCCs and two Suez Maxes for delivery, not this year, but in 2026 and partially in 2027. In Q4, we averaged around $37,000 for our VLCCs. What we have fixed so far in Q1 sits around $31,000 for the Vs. On the Suez Maxis, we did $38,000 in Q4, and to date, we have fixed $32,900 for the Suez Maxis. As Ludovic said, we have entered into our fleet rejuvenation with the sale of four Suez Maxis, the Selena, the Victor, the Cap Felix, and the Cap Lara. We also delivered the Alsace, our VLCC, during this quarter, And all in all, that has given us a profit on sales of assets over Q4 and Q1 so far of $116 million. On the demand side, we expect oil demand to grow, oil supply also to grow, both of them which should be supportive for our markets. Auto book to fleet on VLCCs looks good. Auto book to fleet on Swiss maxis is higher, but we believe still manageable. And then, of course, there's these additional catalysts, as I was highlighting, the OFAC sanctions, which could add some positive momentum to our markets. On this slide, we want to highlight on the right side which drivers are positive and which drivers are negative for the tanker market. And as you can see, there's a lot of green, except for the China oil imports year on year, which are slightly down. But all the rest are positive indicators for our tanker markets. Focusing on the Suezmax age profile, we have focused before on the VLCC age profile. We wanted to do the same on Suezmaxs. You can see here that by 2030, 244 Suez Maxis will reach the age of 20 years or more. Between now and 28, there are 110 Suez Maxis delivering to the fleet, which means that even though the new build orders stand at a slightly higher order book to fleet than the VLCCs, we still believe they will not be able to cover the rapidly aging fleet. And as you can see, as well as the last point, crude tanker ton-mile growth of 2% in 2025 with some productivity losses that we see related to age should normally bring our market into a positive balance. Some more demand fundamentals. The OPEC cuts that were going to be reinstated, that reinstatement has been delayed. We are now waiting to see what is going to happen in April. Obviously, if that supply comes on stream again, it will be positive, particularly for VLCCs. On the demand side, you can see all the agencies and their forecasts for oil demand in 2025 is all above the 24 number, so that's a positive. And as I said previously, so both on the demand side, extra demand, but also on the supply side, even a slight oversupply, usually that is very positive for our tanker markets. Additional upsides can come from the sanctions. And my colleague, Yoris, has pointed out to us two very interesting graphs that you can see here. Russian oil on the water, that's the graph in the middle. And Iran oil on the water and in storage is the graph on the right side. You can see that in recent months, these numbers have shot up. which for us are a very clear indication that the sanctions are starting to bite and it's increasing in efficiencies on Russian oil and Iranian oil. So watch the space because this could definitely be a big driver. One thing I haven't mentioned yet is the enforcement of the sanctions by the Shandong Port Group. We all know that in China, there are, of course, ports that will take sanctioned vessels. But of course, the more sanctions are enforced, both in China and in India, the better this should be for our market. And so again, these indicators in our book are additional upside markers. Focusing on the dry bulk, you see again a beautiful picture of our mineral Portugal leaving Port Hedland full with iron ore. She was the 11th Newcastle Max that joined our fleet. The highlights, as of January the 23rd, we had 12 SuperEco Newcastle Maxis on the water, another 16 to be delivered. In our dry bulk division, Bossima, we also have two 5,000 deadweight mini bulkers, which we'll deliver next year. We still have seven Newcastle Maxis to be delivered in 2025. And we realized a time chart equivalent of close to $30,000 in Q4. In this quarter, which is a traditionally slower quarter, What we have fixed so far is $17,500. In the short term, we have seen weaker than anticipated demands in Q4. Q1 is traditionally a slower quarter, but so far we have not been impressed by the rates. Very recently, of course, rates have started to pick up. And we expect and hope that things for the remainder of the year will be more positive. That is supported by some of the indicators that you can see on the right side. A lot of the indicators are green. Only a few indicators are red, one of them being the China iron ore inventories year to year, which are higher. Another very positive for dry bulk, definitely on the larger sizes, Cape sizes and Newcastle maxes, is the order book to fleet. We are at a historic low of just under 8%. On this slide, we wanted to highlight two things. One is the order book to fleet. As I said, just under 8% today, historical lows, but also the average age of the fleet. We are reaching a level that we have not seen for more than 15 years, average age of 11.3 years. You will see on the next slide when we focus on some of the segments. that this bodes very well for the supply-demand. All the ships should be leaving the fleet eventually. On the shipyard capacity, as you probably know, yards are full for 25, 26, and I would even say 27. So for the next three years, we have a good visibility on what is coming, and that is not that much in terms of capacity. On the age side, there's 204 capes that will reach the age of 20 years by 2027. By 2027, 136 capes will be delivered to the fleet. So you can see that if ships above 20 years of age get scrapped, we will be in a shrinking fleet scenario. By 2030, the number of overage capes of 20 years and plus can reach 40% of the fleet. So definitely on the supply side, we think the story is still very, very supportive. Some additional drivers. One thing that has been highlighted by some analysts in recent months is the amount of dry docks that capes will have to undergo in this year and in the next two years. There's been a huge delivery wave in the years 2009, 10, 11, and 12 of cape sizes. Now all these ships need to go through their third special survey. And so we see a lot of cape sizes being tied up in special service, which is very positive for the market. Cold congestion over the last couple of years has been falling. In recent months, we have seen an uptick. This, again, could be supportive for rates. And the average speed today of the fleet is low. Of course, it is low because supply demands can be balanced with lower speeds, but it's also low because we, of course, need to watch some of the emissions and the costs of our fuel. On the demand side, it's a lot of talk about iron ore, obviously, definitely for the sizes we are in. The whole environment is supportive. Prices on iron ore are still supportive, but definitely also the supply of iron ore coming from different areas, the traditional areas, Brazil and Australia, but also new areas, West Africa, is definitely going to play a very big role. And so on the seaborne iron ore demand, we are very, very positive for the next couple of years. Moving to our smallest division in number of ships, you see a picture here of the CMA-CGM Dolomites and our crew. That was the last 6,000 TU ship to be delivered last year in October. We have four vessels on the water, four 6,000 TU ships, which are fixed on long-term 10-year charters. We have one more ship delivered to our fleet, which is also fixed on a long-term charter that will be next year in the end of Q2, beginning of Q3. The market of containers has surprised everybody in 2024 because of the Cape of Good Hope reroutings, people avoiding the Red Sea. It remains to be seen what will be the situation this year. So far, there's not been a huge amount of easing. But obviously, if vessels transit through the Red Sea and the Suez Canal in a massive way, this should have a negative impact on the market. Obviously, in CMB Tech, our container division, Delphys, is not impacted because we don't have any spot exposure of containers. You can see here on this slide the rollercoaster ride of the container markets, which reached all-time highs during the post-COVID period, but have spiked up again last year due to the Red Sea issues. On the indicator side, there are, of course, some green indicators like container ships, Suez Canal transits, but most of the indicators, a lot of ships coming on stream, rates are down, and the demand is going to ease or more or less negative. So on containers, we are definitely more cautious. Our chemical tanker division, Bokem, we now have six chemical tankers on the water. We have another two vessels delivering end of this year, beginning of 2026, and then two bitumen tankers as well. The market has been performing well. I mean, our performance has been good. We have some vessels on long-term charter, but we also have some vessels in a spot pool. All in all, the year can be split up in two. The beginning of the year was very good, 2024, but then going into Q3 and Q4, it softened a bit because we saw product tankers coming back into some of the dedicated chemical tankers trade. But when you look at the numbers on the right side, these are still very, very healthy, and we cannot complain on the state of the chemical tanker market. And I want to finish with some words on our offshore wind division, Windcat. You see this picture taken in our shipyard in Vietnam, where we are building our CSOVs. The first one to be delivered in the month of May, June, is the one on the right. The second one is the one on the left. And then you can actually already see the third one, which is on the slipway in the middle, being built in Ha Long in the north of Vietnam. The CTV and the CESOV markets, we split it up, of course. Both are active mainly in the offshore wind markets, but of course, there are different ship types. Our CTVs are much smaller vessels. We have seen, actually, Good markets in the second half of 2024. The momentum always shifts towards the winter season is a bit quieter. And even though utilization went down a bit and rates softened a bit, we could actually see already a lot of inquiries for 2025. So all in all, the market was better than expected. And also in this quarter, it is better than expected. You can see that our utilizations are actually quite healthy for Q4 and Q1. And we are reaching average rates around the 3,000. dollar market mark. Our CSOVs, as I said, the first one will deliver in May, June. CSOVs in 2024, there were 13 new buildings coming to the market. Of course, it's a small market. The rates did not really soften, but went sideways. And we still see very healthy supply demand, not only coming from the offshore wind, but more particularly of the offshore oil and gas. Some of these wind vessels, because there are not enough PSVs in the offshore oil and gas market, are moving to oil and gas because also the rates are better there. So the market is very much supported, not only by the wind demand, but also other markets like oil and gas. And you can see here some market rates on this slide. In Q4, typical CSOV was earning $50,000 a day. As a summary, on tankers, we are positive. On dry bulk, we are positive. Containers, we are cautious to negative. On chemical tankers, still positive. And offshore winds, we are positive. You can see our spot and time chart exposure in our various divisions. The tanker market is still very much spot-oriented, even though we have 12 vessels on long-term charters. Dry bulk is full spot. On the container side, we are fully fixed. On the chemicals, it's a mixed bag. Two ships on the spot market and all the rest is fixed. And on offshore wind, on the seas of ease, we are still very much spot-oriented. And then you have our fleet. I'm not going to go into all the details, but we took delivery of 20 ships last year. It's another 20 ships this year, and then another 26 in 2026 and 2027. And you can see all the details on this slide. To finish off, I'm going to hand it back to Ludovic for some conclusions.