CMB.TECH NV Ordinary Shares

Good afternoon and welcome to the CNB Tech earnings conference call for the third quarter of 2025. My name is Alexandre Sévrys and I'm joined by my colleagues Ludovic Sévrys, Enya Derkenden and Jois Daman. We have the usual topics we want to discuss with you today, starting with our financials and the highlights of the quarter. We will then move to the marine division market update and we will close with the conclusion and Q&A. I would like to start with the financial highlights and will therefore hand over to our CFO, Ludovic.

Thanks, Alex. If you move to the next slide. This is the typical overview of our company now post-Golden Ocean merger. We have roughly $11 billion worth of assets on the water and being constructed, over 250 ships. and we'll go further towards the metrics at a later time in the slide deck um but uh if you move to next slide alex you'll see that we finished the quarter uh with the result of roughly 17 million dollars of net profits um our ebda is to that $238 million, where we end the quarter with ample liquidity. We have more than $555 million worth of liquidity in the company. The contract backlog stayed the same, which means that we added a little bit compared to the natural attrition we have quarter on quarter. The capex right now sits at $1.6 billion, and our equity on total assets, book equity for the bond components, still sits above the 30.4%. We had a pretty active quarter, obviously apart from finishing the merger with GoldenOcean, but the Board decided to declare an interim dividend of 5 cents per share, which is going to be payable early January. Our CAPEX program is now fully funded. I'm happy to say that we have signed all new loan agreements on the remaining CAPEX. and the equity component has been covered by own liquidity and sale of assets. The backlog mentioned is still hovering around $3 billion. but we definitely took a big step forward again in our rejuvenation of the fleet, where we took delivery of seven new-built vessels, which have been announced in our training updates. We delivered two ships in Q3, but more importantly, we will generate another capital gain of roughly $50 million on the delivery of the VLC Dalma, the Cape-sized Battersea, and Zushan, and the Suez Max Sophia in Q4. On top of that, we just announced the order of a multiple-purpose accommodation service vessel, which is similar to our CISO-V, but in a bigger format, but Alex will discuss that at a later stage. Moving towards the coming quarters, we're quite excited with the time acquisition of Golden Ocean, a big increase in spot exposure on dry bulk, which is happening at the right moment, it's playing out well. We have 55,000 shipping days in 26, from which roughly 47,000 is spot. With a big focus on large tankers and large dry bulk, we're perfectly positioned to enjoy the good markets that we have today. Moving to the next slide, here we've made a simple assumption. If the market today would continue going forward, we would show what the free cash flow capacity is at current rates. This is a pure assumption, but you can see that at today's rates, we would add another $600 million of liquidity over a year. On top of the $420 million that we anticipate to pay back on the bonds and on the bridge financing. I'm happy to say, by the way, that we'll reduce the bridge by another $300 million by end of this quarter. But this slide shows that with the spot exposure and the good market we have, we can generate meaningful free cash flow, showing the operational leverage of the company. And if people sometimes don't like to spread out over a year, you can easily filter this into quarter by quarter. And this would mean a two-days market that we would add $250 million free cash flow per quarter, which I think is a pretty strong sign of our operational leverage. I'll move the floor back to Alex on the various marine divisions we have.

Yes, thank you Ludovic. I want to take you through our five divisions and the markets in which they operate and what has happened in Q3 and is happening right now in Q4. You can see our usual slide with the five main markets we operate in, the tankers, dry bulk containers, chemicals and the offshore markets. You see that we are still positive on tankers, positive on dry bulk, positive on the offshore markets. We are cautious since a couple of quarters already on containers and on chemicals, and it has to do with the fundamental supply-demand numbers. If I start with the divisions where we're a little bit more cautious, containers and chemicals, you can see the demand numbers for 2025 in containers were positive. but are expected to be quite flat or even down a little bit in 2026, combined by a huge order book in containers, 32%, and the fact that we are expecting gradual unwinding of the rerouting away from the Red Sea, so that ships would go through the Red Sea again, which represents today between 10% and 12% in ton miles. We think container markets will have a difficult time next year and probably also the year thereafter. Same can be said for chemical tankers, be it to a lesser extent. Supply demand is a little bit overweight in terms of the number of ships coming on stream, so we're also a little bit cautious on the chemical tankers. As you know, our two divisions, Delfis and BoChem, are mainly covered by time charters and have very little spot exposure. If we turn to the other segments, Starting with dry bulk, which is by far our biggest exposure today, we see that there was an increase in ton-mile demand growth for cave sizes this year of 0.8%, so not very meaningful, but still positive. Expected to ramp up next year to close to 3%. Combined with a supply figure where only 9% of the fleet is on order, where the fleet is also aging, 32% of the CAPEs is 15 years and plus, we believe that supply-demand fundamentals on dry bulk are actually very strong. On tankers, we are seeing demand growth this year, next year in ton-mile. We see that the fleet is growing, but because of all the inefficiencies that we are seeing in the market, and I'll talk about that in a minute, we still believe that definitely in the short term, the supply-demand figures look very good for tankers. Last but not least, on the offshore, offshore wind, but also offshore oil and gas. We have seen the offshore wind markets grow, even though some projects have been postponed. But there, for offshore supply vessels, there has been a lot of extra demand for the oil and gas, from the oil and gas market. So we are seeing offshore wind vessels going into the oil and gas market, and supply-demand fundamentals definitely in that market are also positive. I'd like to zoom in to Bossimar and maybe go back one slide. You see here one of the vessels from Golden Ocean that has been renamed to the Mineral Sakura, so our renaming program is in full swing. We are keeping the Golden Ocean or the Golden prefix for our Panamaxes, but are renaming all our Cape Sizes and Newcastle Maxes to Mineral prefixes. We have three large divisions in dry bulk, our Newcastle Maxes, our Cape Sizes, and our Kamsamaxes Panamaxes. If we focus on the Newcastle Maxis first, what have they done in Q3? We achieved a TCE of $29,500, and in Q4 to date, we are at close to $34,000. On our capes, the number for Q3 is 20,500, going up in this quarter at $26,200. You can see that we've already fixed quite a substantial amount of ships for Q4, but that number could still go up a little bit if the current markets stay strong. On the Camzamax and Panamaxes, definitely a positive surprise for this year. We have seen rates better than anticipated. We achieved rates around $13,500 in Q3, but that's already up in Q4 to $17,000. Main drivers for dry bulk, when we look at all the indicators, a lot of them are green. It's positive on the China steel mill utilization. It's positive on soybean imports to China. Brazil iron ore exports there are also very good. And, of course, the dry bulk fleet supply is growing, but we are seeing definitely in the larger segments more demand growth than supply growth of vessels. Sorry for that, just was a bit too quick. Zooming in on the demands of iron ore, coal, grain and bauxite, you can see that all numbers are positive, expected positive for 26 and 27, except for coal. But we believe definitely for the larger sizes that iron ore and bauxite are compensating or overcompensating the less demand for coal. Watch the space on grain as well. Not really a big driver for cave sizes, but important for our Panamaxes. The numbers there are very positive. And with the recent peace agreement on tariffs between China and the U.S., we're expecting that demand hopefully to continue on the tonne mile side. If we look at the number of ships on order compared to the existing fleet, you can see that in 2026 and 2027, we are going to add some cape sizes to the market. But all in all, including 2028, the order book to fleet is only 9%. The number for Panamaxes is 14% order book to fleet, but also there, with the demand figure, I think supply-demand should be balanced and definitely looking positive for that market. An important number to highlight is the average vessel age. As you can see, both Panamaxes and cave sizes are at historical highs in terms of average age, which always bodes well for potential scrapping. The next three slides are providing you more information on the Brazil iron ore trade, the Australia iron ore trade, and the Guinea iron ore and bauxite trade. On all three, I can say that we are at five-year highs in terms of output. You can see the numbers there on the slide. And we've basically tried as well to highlight the seasonality. Seasonality in the Atlantic Basin in Australia and for Guinea is dependent on rain. The rainy season usually in Brazil and Australia is in the first quarter. However, in Guinea, that's usually in the third and fourth quarters. So we see that the Guinea season can actually help our markets because when Australia and Brazil are down, they are up. Actually, in the rainy season of Guinea this year, it was less than expected. So we saw some good outputs regardless of the rainy season. The key takeaway here from this slide, and from the australia slide and from the guinea slide is that we are seeing volumes up volumes at five-year highs and the seasonality in q4 and q1 actually supportive i'd like to talk about our tankers uranav our tanker division and crude oil transportation We have a trading fleet of 10 VLCCs with another four eco VLCCs on order. Some of the pictures that you have seen during this presentation highlight the new VLCC that we took delivery of a couple of weeks ago, the Atribates. We have another four coming in the following weeks and months. We achieved $30,500 in Q3. Still far in Q4, we are at $68,000 with 78% fixed. We believe that number can still go up. The fixings and the bookings that we have done in recent days and in the coming weeks are looking very promising. We sold one older ship, the Dalma, which generated a capital gain of 26 million. We've extended one ship by year, the Donusa, and then we delivered two vessels to the new owners in Q3, the Hakata and the Hakone. On the Suez Maxis, we have 17 vessels on the water. We have another two ships coming in the fleet next year at the end of Q1. We sold one Suez Max, the Sophia, which was delivered in Q4. And the rates we achieved in Q3 was strong, was $48,000. And Q4 quarter to date, we are close to $60,000. But again, there, we still have some days to fix. So there is upside to that number. When we look at the main drivers and the main indicators, we see that a lot of indicators are positive. And also on the tanker feed supply, year on year, it's still a moderate feed growth. let's look at what's coming zooming in on the demands you can see that the forecasts are that there will still be an oversupply of oil in the coming months and quarters that leads to more storage that leads to more oil on the water that leads to definitely in the short term better rates Because if we look at the supply of vessels, you see that this year there's been very little new ships coming on the water. But it's starting to creep up. So next year, 26, and in 27, we will see more Suez Maxis and VLCCs come to the market. If you look at the average age of the fleet, this new supply should definitely be manageable. So in the very short term, maybe even medium term, we are still bullish on rates for tankers. What happens thereafter, a lot will depend on how many more tankers will be ordered and added to the order book. We are not at the single digit numbers anymore. For the VLCCs, we're at 15%. AutoBook2Fleet and SuezMax is 20%. So it's not what it used to be. But I would say that in the short to medium term, things are still looking very good. And also the age of the fleet is supportive. On containers, we can be quite brief. As you know, the exposure we have on containers is limited. Actually, it's zero. We have fixed all our ships to four vessels on the water to CMACGM, and then we have one ship coming next year on a 15-year charter. The market on containers has weakened. You can see the SCFI, which reflects the freight rates for containers paid. It has slipped down and is now at a level which is the lowest of the past two years. The high order book, more than 30% of ships on order, plus the Red Sea situation, which will unwind, lead us to being quite cautious on the supply side. Demand should also be lower next year, so container markets could be up for a bit of a rough patch. There, our spot exposure is also very limited. We have a couple of ships operating in a spool, so that's basically our spot exposure. All the rest is time-charted. We still have quite an interesting order book coming, with all ships having been fixed. One more chemical tanker that has already been christened, but that will deliver soon coming to our fleet. Next year, we'll have two product tankers coming to the fleet, which are fully fixed. And then we have our ships in 28 and 29 that were fixed to MOL that will come later. But so our spot exposure on chemicals is relatively limited. It's a less volatile market, but it has come off its very high levels of last year and the year before. But we are still at very healthy levels. And then I'll finish with Windcat, the offshore wind division. Some of you might have seen in our press release, but also in a separate Windcat press release, that we ordered a new CSOV, an enlarged version of the CSOV, which we call an MPASV. And I'll say something about that in a second. But maybe first zooming in on our going concern business. We have our CTVs, we have our CSOVs. We took delivery already of one CSOV. That ship has been fixed on a very short-term period for business in oil and gas in Australia. It already gave us earnings in the third quarter of $27,000. The fourth quarter rates are going up to $118,000 with most of the days already fixed. We have ordered this new multi-purpose accommodation service vessel, which I will discuss in a second. And then looking at our CTVs, you can see that the seasonally strong Q3, we achieved good rates of close to $3,500 a day on average. The slower period in Q4, our TCE sits at $2,800. Here you have a render of the newest new building order for CMB Tech. So we ordered one ship with another options for five vessels. It is based on our existing CSOV design for the 120 passengers on board, but we've upsized it to 150 to even 190 passengers on board. It will have a permanent gangway connection, which is better for oil and gas projects. It will be larger, so positive for our charters. When we look at the market, it will be the only vessel type that can truly operate between oil and gas on the one hand and the offshore wind on the other. Our existing ships are already suited to do that, but this one will be even better suited. We have a 100-ton subsea crane which is installed. And when we look at where that ship will compete, we see that the flotel market for oil and gas is one market that we will target. And when we look at designated ships for that market that also have the crane capability, we see that there's actually not that many vessels on the water and that are being built for this. Our markets are everywhere, but clearly one of the markets that will be interesting and something to follow is the Brazilian oil and gas market, where we see more than 30 FPSOs entering service in the next two to three years, which will need a lot of support vessels coming there. The reasoning behind this is that we want to trade in the two markets. Eventually, the ship will end up in offshore wind, but as long as the offshore wind is a little bit quieter, we can also go to oil and gas. And with this new building or with this newest addition to our fleet, we can end the part of the presentation and go to the Q&A.