Cmb.Tech N.V. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Merger Completion: Completed merger with Golden Ocean, creating largest listed diversified maritime group. Fleet now 206 vessels, 44 on order. Contract backlog ~$2.9B.
• Financials: Q2 loss $7.5M (Cmb.Tech profit $7.7M, Golden Ocean loss $50M). Liquidity ~$400M. Outstanding CapEx $1.86B, $270M unfunded.
• Dividend: Declared interim dividend of $0.05 per share.
• Fleet Updates: Newbuildings delivered monthly, vessels sold (e.g., VLCC Iris, Sofia), Golden Ocean vessels delivered.
• Market Outlooks: Positive on tankers and dry bulk; cautious on containers and chemicals; positive on offshore wind.

Segment Performance

• Dry Bulk (Bocimar): Became the largest division. Cmb.Tech side: 17 Super-Eco Newcastlemaxes on water, 11 on order; Q2 TCE for Newcastlemaxes $18,500/day, Q3 to date $23,500. Golden Ocean side: 89 vessels; Kamsarmaxes and Panamaxes: Q2 $10,500, Q3 $13,500.
• Crude Oil Tankers (Euronav): 10 VLCCs, 18 Suezmaxes on water; 5 VLCCs, 2 Suezmaxes on order. Q2 RVs (VLCCs) TCE $45,000, Q3 to date $32,000. Suezmaxes Q2 and Q3 to date $40,000.
• Container: Fleet fully fixed, waiting for one newbuilding delivery in July 2024. Spot rates softening, time charter supported; high order book.
• Chemical Tankers: 6 vessels on water, 2 delivering soon, 2 bitumen tankers in 2026, ammonia-ready/ammonia-fitted in 2028-2029. Most fixed long-term, 2 on spot via pool. Q2 pool results 22,000, Q3 expected higher.
• Offshore Wind (Windcat): 56 CTVs on water, 7 on order; 1 CSOV delivered, 5 on order. Market healthy, utilizations good.

Guidance

• Hypothetical 1-year free cash flow: Bear case loss $35M, medium $170M, bull $380M (current market supports bull case ~$380M).
• Contract backlog remained ~$2.9B.
• Fleet growth: End 2025 at 218 vessels, 2026 at 241 vessels.

Risks

• Market Volatility: Impact of market conditions on spot vs. time charter rates.
• Regulatory Risks: IMO 2028 regulations and potential U.S. opposition; impact on decarbonization efforts and long-term charters.
• Shadow Fleets: Presence of illegal and old shadow fleets affecting supply and demand in tanker markets.

Question and Answer

Q: About dividend reinitiation A: Discretionary policy, will analyze balance sheet, P&L, cash flow.

Q: Focus post-merger A: Business as usual, integrate fleet, explore opportunities in divisions.

Q: Refinancing and SG&A A: Refinancing mostly completed, SG&A run rate expected lower post-integration.

Q: Fleet composition and ammonia-powered vessel A: Focus on modern fleet, working on ammonia bunkering infrastructure.

Q: Iron ore volumes and share buybacks A: Guinea iron ore volumes positive, share buybacks under analysis.

Q: Shadow fleets A: Hoping shadow fleets disappear, but realistic about impact.