Belgium's Euronav swings to profit on freight rate boost

By Juliette Portala

(Reuters) -Belgian oil tanker and storage operator Euronav on Thursday reported its first quarterly net profit since 2020 and core earnings more than ten times higher than a year ago, thanks to accelerated large tanker freight rate recovery.

The crude shipping market, which has battled low earnings since the COVID-19 pandemic first hit oil demand, is now seeing freight rates recover, and this year's trade flow disruptions due to sanctions on Russia have driven shipping activity.

"It looks like the Russian oil boycott is raising ton miles with shifting Russia-Europe towards Far East and India," analyst at ING Quirijn Mulder wrote in a note.

"The EU price cap and embargo should give another push," Olivier Vandewoude, analyst at KBC Securities, added as the U.S. government, the Group of Seven major economies and the bloc plan to impose a price cap on Russian oil from Dec. 5.

Euronav, which provides crude oil shipping and storage services, also pointed to U.S. crude exports' new record high of 5.1 million barrels a day for the week ended Oct. 20.

The Organization of the Petroleum Exporting Countries and allies, which has come under growing pressure to pump more crude oil following Western sanctions on Moscow, decided last month to cut its production target even though U.S. officials had lobbied for weeks against such a move.

"We believe that potential headwinds from OPEC production cuts will not translate into factors capable of disrupting the current momentum," Chief Executive Officer Hugo De Stoop said in an earnings statement.

"Medium term prospects look bright," Vandewoude said.

The Antwerp-based group's quarterly proportionate earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose to $99.6 million from $9.1 million a year earlier.

Its net result swung to a profit of $16.4 million, against a loss of $105.9 million in the same period last year.

(Reporting by Juliette Portala, editing by Mark Potter and Bernadette Baum)