CMB.TECH NV 2026 Q2 Earnings Call

Good morning, good afternoon, and welcome to the earnings conference call for the second quarter of 2026 of Cmb.Tech. My name is Alexander Saverys. I am the CEO of Cmb.Tech, and I am joined by my colleagues, Joris Daman and Enya Derkinderen. We will start, as always, with our financials and some highlights. Before we do, we give you an overview of the fleet of Cmb.Tech. You can see that we have 206 vessels on the water with another 26 new buildings coming. Our contract backlog is stable at $3.3 billion. The fleet is young. We have an average age below 6 years. Our CapEx commitments, we will discuss a bit later, have now gone down to less than $1 billion. We have a market cap of $5.2 billion, a fair market value of the fleet of $11.2 billion.

For those who might not know, we are still listed in New York, in Brussels and in Oslo. Our second quarter financials. The title of our press release was Making Hay. Making hay while the sun shines. These are exceptional times for shipping and also exceptional times for Cmb.Tech. The company has made a profit of $364.4 million in the second quarter. This was on the back of an increased revenue of over $700 million and an exceptional profit that we made on the sale of assets of $127 million. You can see the other items in our profit and loss that stick out. One of them is the net finance expense. We are reducing our quarterly net finance expense to $76 million, which is a 5% reduction compared to the first quarter. This is led by cheaper refinancings and also just a general repayment of our debt.

Our EBITDA stood at $552 million. Our liquidity, slightly below $400 million. On total assets, book value stands at above 35%, and our equity on total assets value adjusted is now above 50% at 51.5%. For the highlights during the quarter, I already mentioned our net profit and our EBITDA. The liquidity, which stands at around $400 million. We have a contract backlog, which is stable. We have added during the quarter two, 2-year charters on our COVs and one, 1-year VLCC charter. We have the intention to distribute an amount of $0.64 per share, which will be split in an intermediary dividend of $0.21 per share and a payment of $0.43, so $0.21 per share and $0.43 per share out of the share premium reserve, which is exempt from any withholding tax. We have taken delivery in the second quarter and quarter to date of 9 new building vessels.

These were 4 Newcastlemaxes, one VLCC, 2 brand-new Suezmaxes, one CSOV, and one CTV. We have sold quite a few ships so far this year. In the second quarter, we have delivered to their new owners 2 VLCCs, the Ilma and the Ingrid, on which we booked a capital gain of $98 million. We have sold an older Suezmax, the Sienna, with a capital gain of $29 million. So total gain in second quarter was $127 million. In the third quarter, we will book a gain of $100 million on the sale of 2 Suezmaxes, and in the fourth quarter, we will add a gain of $130 million on the sale of the Donoussa, which is a VLCC, and one more Suezmax. The sales of our tankers, we believe are very well timed. We are at historic high prices for VLCCs and Suezmaxes.

On this slide, you can basically see the 10-year average for a five-year-old VLCC and a five-year-old Suezmax, compared to today's values, and also compared to the last 10 years minimum and maximum. As you can see on VLCCs and Suezmaxes, we are well above the 10-year average. We are also well above the maximum of over the last 10 years that we have seen. We therefore believe it's a good time to sell some of our assets, particularly our older assets. Then we have put a comparison where other segments stand, like Panamax and Capesizes. As you can see that today's values, even though they're at the top end of what we have seen over the last 10 years, they are still in line of that bracket. Same goes for VLGCs. Of course, on the container vessels, the situation is different and also on LNGs.

We wanted to show you what we believe in 2027 our operational cash flow could be, based on certain rate assumptions. So we have put the rate assumptions at the bottom right of the slide, with a 10% and 20% uplift. Rate assumptions for 2027 have been based on FFAs and assumptions for next year. You can see the numbers there. What you then see is after having repaid or paid all our CapEx investments, we still are forecasting a cash flow of $700 million to $1 billion. I would say that's a very powerful figure to see that even after all our CapExes have been repaid, our operational cash flow will be between $700 million and $1 billion. Of course, if the market changes, the numbers will change, but it gives you an indication of the cash flow generating potential of all our different divisions.

The most important, of course, are Newcastlemaxes and Capesizes, are VLCCs and Suezmaxes. I mentioned the CapEx. We still have $890 million of new buildings to be delivered, of new building installments to be made. Of that number, the vast majority has already been financed. We have an unfunded CapEx of $119 million, which is basically spread out this year, $43 million, and then other amounts in 2027, 2028, and 2029, which are relatively small. At the end of this year, our outstanding CapEx commitment will be between $375 million and $390 million. So we've come to the end of our large two-and-a-half year new building investment plan. I want to give you an update on the market and talk about Bocimar, Euronav, Delphis, Bochem, and Windcat.

I always start with an overview of the different markets we operate in and what we feel is the sentiment and the state of the market. Starting with dry bulk. Clearly, we are positive on dry bulk. We see that demand on the major commodities we are moving is growing. That goes for iron ore, bauxite, grain, and coal. The order book to fleet has increased a little bit on Capesizes, actually decreased a little bit on Panamaxes. We are around the 15% mark, which we still think is something that the market can take for the next couple of years. The age of the fleet, 41% of our Capes are older than 15 years. More than one-third of the Panamaxes are older than 15 years. The balance between supply and demand on dry bulk, we believe is positive. Moving to tankers. You can see that we have colored from positive to cautious and basically kept a positive and cautious approach.

No doubt the market is very positive today. We are seeing all-time high rates on secondhand numbers on the freight numbers on the spot market. So the market is very strong. Reason we are becoming a little bit more cautious is that on the demand side, we don't know what the effect will be of a potential solution in the Strait of Hormuz. Obviously, we don't know the timing, but that solution could lead to softer markets. What worries us a bit more is the order book to fleet. We are now seeing an order book to fleet on VLCCs and Suezmaxes of over 30%. This is not impacting the market right now.

The order book for 2026 is still very reasonable, but as from next year and the year after, we will see a tsunami of VLCC and Suezmaxes coming to the market. Moving to containers and chemical tankers. We have had a cautious approach to both markets. The container market has surprised to the upside. The unwinding of the Red Sea rerouting has been postponed with the renewed tensions around the Bab el-Mandeb and the Houthi attacks. But when you look at the order book, we would still be quite cautious for containers going forward. But right now, the market on containers is still quite good. On the chemical tankers, the order book is something we are watching closely. The market has actually performed relatively well. But going forward, we take a slight cautious approach.

As you know, both in Delphis and Bochem, our container and chemical tanker division, we have close to no spot exposure, so we are very well covered and shielded from any market fluctuations. Our last division, Windcat, offshore energy. We are seeing good rates. We believe if you look at the demand for the offshore wind energy projects, but also offshore oil and gas projects, combined with the order book with the fleet that is coming, there is a substantial fleet of CSOVs coming to the market next year and in 2028. But combined with the demand that we see in oil and gas and wind, we believe that the balance is positive. I want to zoom in on certain specific dynamics in our sub-sectors, starting with dry bulk. First, our dashboard, what we have done in the second quarter.

Our fleet today is 40 Newcastlemaxes on the water, 37 Capes, and 30 Kamsarmaxes and Panamaxes. The performance in the second quarter was very good. We earned $46,000 on our Newcs, close to $40,000 on our Capes, and $20,000 on our Panamaxes. The rates for the third quarter are in line with the rates of the first quarter. So far of second quarter, so far, what we have booked in Q3 is slightly below Q2 because we have positioned quite some vessels into interesting front-haul positions, and we would normally see a bump on our rates towards the end of Q3 and into Q4. A lot of the indicators on dry bulk are green. Some indicators like iron ore inventories and steel inventories are slightly negative. But overall, we see that the demand side of things is looking very positive.

Looking at order book to fleet before we zoom in on the demand, one can see that the order book has grown. We are now in a Capesize order book to fleet of 17%. Panamax has actually gone down slightly. We are at 14%, spread out nicely over the next couple of years. So far, we don't believe that the order book to fleet is an issue. The average age of the fleet is actually very positive. The fleet is aging. Very little scrapping going on. So that has the potential to help the market in the next couple of years. The volumes, we are seeing iron ore, coal, actually supporting the market. So on our Capesizes, it's iron ore, bauxite, and a little bit of coal. On the Panamax, it's coal, grain, and some of the other commodities.

When you look at what has been transported, we see that there is growth. Bauxite seasonally dips in the second quarter, but we have seen a very interesting pickup recently. So a strong second quarter volumes on all dry bulk commodities. When we look at the iron ore specifically, it's a China-Australia-Brazil story. An interesting story that we are seeing is the Fe content. Overall, Chinese iron ore imports and Chinese iron ore imports are reducing in Fe content a little bit, and we are seeing lower production, domestic production in China on the iron ore. Both these elements, if you compare 2026 with what we are expecting for 2027, could add another 2.5% of extra iron ore imports into China.