The Belgian tanker operator reported a netdeficit of $21.9m for the three months to 31 December, versus a loss of $64m inthe comparable period a year prior.

Earnings before interest, taxes,depreciation and amortization rose to $35.4m from negative $6.5m year-on-yeardue in large part to the spike in freight rates during the period.

Tonnage tied to theTankers International VLCC pool reported a daily time charter equivalent rate(TCE) average of $24,000 in the fourth, which is nearly twice as high as thefigure reported 12 months prior.

Some of Euronav’ssuezmaxes achieved averages of around $23,400 when employed on period dealswhile others saw daily rates of around $14,500 when trading spot during thesame period.

By comparison, the NYSEEuronext-listed operator’s suezmax fleet reported a daily TCE average of $20,200and $8,500 in the spot and time charter markets, respectively, in the fourthquarter of 2012.

In like a lamb, out like a lion

Euronav attributed the gains in the VLCCsegment to growing demand for tonnage in the Far East and a vessel shortage thatstarted to take shape in the second half of the quarter as “charterers who weremore experienced started to fix off dates further and further out”.

On the suezmax front management notedthe ownership structure of the sector remained fragmented in the fourth quarter,which is why the market remained weak until ships began picking up long-haulbusiness on the back of the shortage of VLCCs in the Atlantic.

“The market is currently stronger thanat any time since the first quarter of 2010 and looks likely to last for therest of this quarter,” it continued.

“Owners are finally showing willingnessto make up for the lost time of the last three years and there is a verydifferent mood on the back of stronger fundamentals.”

Buyer beware

While rates are on the rise Euronavwarned that the recovery of the tanker market “remains fragile” and was quickto point out that the “supply and demand balance for crude oil transportationis at best very thin”, which is why it continues to be opposed to speculative orders.

“Furthermore, as the company demonstratedin the past the so-called ‘eco-ships’ do not exist in the large tanker sectoras most ‘eco gains’ can be replicated through retrofitting fuel saving deviceswhich can be done to existing ships at a fraction of the cost of a newbuilding,”it added.

Going forward the operator said itexpects the acquisition of 15 VLCCs from Maersk Tankers to be completed “rapidly”and believes, when the deal is sealed and all the ships are delivered, theexpanded fleet will “further enhance” its “prospects”.

“Euronav continues to look atopportunities in the large tanker sector as it wants to play a significant rolein a wider consolidation of the world tanker fleet,” it told investors.

“The Euronav platform is ready for itand management believes that with the concurrent benefits of synergy andlogistical enhancement this will benefit all of the company’s stakeholders.”

At the start of the first quarter of2014, Euronav said VLCCs operating in the Tankers International pool were seeingdaily earnings of around $38,500 on average while suezmaxes were fetchingapproximately $30,150.

Euronav, which is typically the firstpublicly-traded tanker owner to report earnings, turned in a full-year loss of$88.3m or $1.76 per share, which was slightly worse than the consensus forecastbut far better than the $118.9m deficit reported in 2012.