Belgian tanker operator Euronav posted record-high first-quarter results on Thursday and said it expects strong demand for floating oil storage to continue in 2020, driving its shares up almost 9%.
Crude floating storage is now at a record high of at least 160 million barrels, with onshore crude storage facilities quickly filling up as a drop in demand and prices for crude has left producers and traders scrambling to find storage.
“Demand for tanker shipping is currently high and management believes will continue, albeit likely to remain volatile, throughout 2020,” Euronav said in a statement.
Euronav, which operates more than 70 vessels, added the severe drop in demand for transportation is so far over-compensated by demand for storage of crude oil onboard vessels.
However, the company said it is too early to quantify the long-term macro-economic impact of the COVID-19 disease on its results.
The company’s shares rose 8.8% at 0835 GMT.
KBC Securities said Euronav was well set up for a “great” second-quarter, given the already fixed rates.
So far in the second-quarter, Euronav’s VLCC fleet has earned $95,000 per day, with 71% of the available days already fixed. Furthermore, its Suezmax fleet trading on the spot market has earned about $65,400 per day on average with 57% of the available days fixed.
Euronav, one of the largest tanker companies in the world, reported first-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) at $327.9 million, up from $125.3 million in the same period a year ago. ,
(Reporting by Charles Regnier Editing by Tomasz Janowski and Emelia Sithole-Matarise)