Euronav NV
Q4 2015 Earnings Call Transcript

Published: 29 Jan 2016

[Operator:]

Good morning and welcome to the Euronav Q4 2015 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Paddy Rodgers. Please go ahead, sir.

[Paddy Rodgers:]

Thank you. Good morning and afternoon to everybody, and thanks for joining Euronav's Q4 2015 earnings call. Before I start, I would like to say a few words. The information discussed on this call is based on information as of today, January 28, 2016 and may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements reflect current views with respect to future events and financial performance, and may include statements concerning plans, objectives, goals, strategies, future events, performance, underlying assumptions and other statements which are not statements of historical facts. All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by reference to the risks, uncertainties and other factors discussed in the Company's filings with the SEC, which are available free of charge on the SEC's Web site at www.SEC.gov and on our own Company's Web site, at www.euronav.com. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement and Company undertakes no obligation to publicly update or revise any forward-looking statements. Actual results may differ materially from those forward-looking statements. Please take a moment to read our Safe Harbor statement on Page 2 of the slide presentation. I will now pass over to Euronav's CFO, Hugo De Stoop, to run through the first part of the presentation.

[Hugo De Stoop:]

Thank you, Paddy, and good morning or afternoon, wherever you are and thanks for joining our fourth quarter 2015 earnings call. Turning to the agenda slide, I would like to take you through the highlights of our fourth quarter earnings, followed by a full review of our key financial figures, before handing over back to Paddy to take you through the latest market developments and themes as we see them at Euronav. We will then turn over to the operator for Q&A session. Moving on to Slide 4, the fourth quarter saw the return of high volatility of freight rates. Such volatility occurs when the balance between demand and supply is very tight and we see that as a very positive structure for tanker owners. Freight rates in the VLCC segment were very strong during October and December, with some temporary cooling off during November, but with very high rates sometimes in and around $100,000 per day. The average spot rates came at $61,500 per day for VLCC and close to $42,000 per day for Suezmax in the fourth quarter. Clearly, this is the strongest quarter during what has been a strong year for the large tanker business. No real surprises, Q4 is traditionally the strongest quarter and 2015 has proved this once again. In the fourth quarter, we also sold one of the four oldest Suezmax Euronav owns. That was the Cap Laurent. The sale generated a profit of $11.3 million, which was booked in the fourth quarter. This is part of our strategy to manage our portfolio of ships, where we look to sell all the tonnage when the price is right. We continued to manage our portfolio in the first quarter of this year in 2016 and sold one of our two oldest. The outlook for the first quarter 2016 has continued to be positive and we have booked so far 46% of the available VLCC spot days at rates of more than $75,000 per day and nearly 47% of the available Suezmax spot days at an average of more than $41,000 per day. This is a very strong average so far and whilst we are extremely happy about the start of the quarter, it is important to remember that the very positive headline rates like $100,000 a day or more that are sometimes reported in the press or by the shipping broking community relate to specific voyages and not averages. I would now like to move on to the income statement on Slide 6. As usual, all figures have been prepared under IFRS and adopted by the EU and have not yet been reviewed by our auditors. Currently, we have four Suezmax, one VLCC and two FSO that are in joint venture structure with partners at equal share. These will be accounted for using the equity method for joint arrangements. Our EBITDA during the fourth quarter came in at $160.6 million, including the capital gain on the Cap Laurent sale. This represents the best performance by the group in quarterly terms during 2015, but also since the famous year that was 2008. Other points worth highlighting are the following. The tax expense line saw a negative non-cash movement of $4.5 million. The way it works is that we activate some deferred tax assets that we have obtained following investments made in the past. The amount activated at the end of 2014 was not enough, given the good year we had in 2015, so we activated some more in previous quarters of this year. In this quarter, the last quarter of the year, we have used what was left for 2015. This is mainly an accounting technique that we have to record like that, but it has no cash impact. As of 2016, those movements should be much lower, as the vast majority of our ships will be under the tonnage tax regime. On dividends, Euronav remains committed to our distribution policy of returning 80% of net income. This dividend will be announced by the Board of Directors, together with our fully audited results in March, and will be presented for approval at the shareholders meeting and paid soon after that, in May. Lastly, a word on G&A -- the expenses were higher than in other quarters of 2015. This is mostly due to the end-of-the-year bonus payment to our staff and our significant contribution to the bonus of the TI pool staff -- significant contribution because we have a majority of the vessels of that pool. Taking into account the payment of those bonuses after an exceptional year and looking at the management cost per vessel, the tankers international pool remains the cheapest pool to operate a VLCC in. Let's move on to Slide 7 and look at the balance sheet. Our leverage position on book values at 31 December was 37%. The pro forma balance sheet including the three new buildings to be delivered to us in the coming months would make the leverage increased to 41%, and the payment of the dividend in May should also increase the leverage to around 45%. In other words, Euronav is conservatively leveraged and has no need in its current structure for any additional financing, either through debt or equity. Capital gains on the sale of tonnage will be used mostly for fleet renewal at Euronav, so not available for distribution as dividends or cash returns. The capital gains are used to de-lever the Company until an investment to renew the tonnage is made, and therefore these sales allow for some modest deleveraging in the meantime. The way we do this is by paying down our revolving facilities, which remains fully committed and available to us. Let's now turn to the fleet operating business at Euronav that's on Slide 8. The split between the tanker spot days and days in the time charter contracts, including DFSO, for the fourth quarter was maintained at the same level as in the third quarter, i.e., 20% fixed and 80% spot, as Slide 8 shows. On a full-year basis we expect to have a similar split between our fixed and spot base. On the drydock activity, Q4 was very busy, as we flagged in the last call in October. So we took three Suezmax, of which one owned in joint venture and three VLCC in drydock during this quarter. In total this year, Euronav took five Suezmax, of which one is owned in joint venture, and six VLCC, also of which one is owned in joint venture, to drydock. This year, in 2016 we expect to drydock eight Suezmax, of which two are owned in joint venture, and for VLCC. The split for quarter will be a function of expiration of current certificates, market conditions and position of our ships. That concludes the financial section of the presentation. And I will now hand over to our CEO, Paddy, to give you an update on the tanker market and current market themes, Paddy, over to you.

[Paddy Rodgers:]

Thank you, Hugo. The order book as we emerged is a key issue for investors in recent weeks and rightly so. As we covered in our press release earlier today, analysis of the order book needs to be thorough to provide a correct view of 2016 and 2017. Order book growth has actually slowed sequentially quarter on quarter since Q2, following a spate of orders for VLCCs in particular, which we discussed at the last call. We believe these were brought forward in order to avoid new tier 3 legislation due in January 2016. Detailed analysis of the order book suggests the current VLCC order book as a percentage of fleet is just over 18%, which is not extreme by historical standards, with 21% for Suezmaxes, where fleet growth is more of an issue for 2017. Euronav are not complacent on this critical issue but would point out three thoughts. Firstly, the delivery schedule of VLCCs is heavily skewed towards the latter half of 2016. Secondly, based on the above forecast, demand and supply are broadly in equilibrium, indicating that freight rates of tankers should remain tight and therefore volatile at elevated levels. Thirdly, whilst the scrapping is expected to be extremely modest -- drop is expect five VLCCs to be scrapped during 2016 -- the average 20-year life of our crude tanker implies a natural level of attrition between 3% and 5% per annum in the global fleet. In conclusion, Euronav believes that the total order book to ratio of the fleet of 15% to 20% is therefore manageable. Moving on to the next slide and time charter rates -- this slide shows indicative rates for one- , three- and five-year time charters for both VLCC and Suezmax. Both segments have seen a strong rising one-year time charter rates, but rates for three to five years are flat-lining, albeit at acceptable levels of around $40,000 for VLCCs and the low $30,000s for Suezmax. Our interpretation of these charts is positive. Compared with one year ago, the market is more active and for longer periods, albeit still less than three years, typically. Investors should see the charts in Slide 11 as a sort of future market indication for the freight rate. Euronav earlier in the year has been keen to lock in some of the rates available for our older tonnage, as we are more interested in term rather than rate, as the TC market generally tends to discount the spot market. But once we see that rate, as long as that price is right, then we are prepared to take a decision to fix the ship. Our strategy remains unchanged. When we put more of our fleet on to time charter, this is not Euronav calling the market. It is just simply as a larger ship owner actively managing our portfolio. If it looks like sensible business, we do it. Now we move on to vessel values. Euronav has been consistent now in expressing our views that we expect and continue to believe there will be downward pressure on asset values, particularly for younger ships and for new buildings. The profound changes in the financing of the shipping sector and distress in other shipping segments apart from the tanker sector, where a majority of tanker owners have financial interests, make this pressure inevitable. As the chart makes clear, this pressure can be seen in the newer vessels and in the value of scrap as the steel price continues to fall. However, on the water vessels with older vintages have an advantage of visible cash flows. This is reflected in higher values being achieved for older tonnage, a move that Euronav has taken advantage of in both Q4 and the current quarter with the disposal of the Suezmax, the Cap Laurent, and the VLCC Fammen. This active management of our portfolio is something in which Euronav has already engaged to reduce our average fleet's age, rejuvenating our portfolio and providing options for management for use of proceeds of sale. Now on to current market themes in Slide 13, China recent commentary has centered on China and the expected growth and the impacts on oil and transport markets. There appears to be a gap between the perception and the reality developing, and there are four points that we would like to make about China. First is the base effect of numbers. Investors understandably are focused on growth rates and particularly by reference to percentage changes. However, this can be detrimental to the bigger picture. Crude imports never experienced the big boom or bust of other commodities such as iron ore. Indeed, oil demand growth has been less than nominal GDP growth in the past decade in China. But a word on the absolute numbers China imports at around 8 million barrels per day, so even if there's only a 5% growth on this base, it is still 400,000 barrels per day or a requirement on an annualized basis of between 12 and 16 more VLCCs. Secondly, Euronav serves the operational economy in the main, not the infrastructure build. In 2015 actual import growth was 550,000 barrels per day with total imports up 9% year-over-year to 7.85 million barrels per day. Car sales in China were up 16% year-on-year and gasoline demand should remain healthy. Thirdly, market commentators bemoan the lack of structural reforms that China is undertaking. However, the reform of the seaport refineries initiated in June 2015 is exactly the sort of initiative that China should be taking. This directly benefits crude tankers, as it opens up new channels of supply. This is not just new demand, but in fact it's substituting demand and was previously close to two tankers and supply domestically. Currently, the [teapots] have licenses to import 1.3 million barrels per day, and lease licenses have to be kept running to some extent, or else they would be forfeited. The annualized effect has yet to reach its anniversary, but this gives the tanker sector some comfort of diversified demand even within China. Lastly, we expect SBR to increase capacity later this year again, providing an additional further source of demand from the Chinese market. Add to this the continued determination of the Chinese to diversify their sources of crude imports, and the China story as part of our investment case continues to look robust. Iran the return of Iran to oil markets has generated headlines but little impact upon our market so far. Iran has been trading, regardless of sanctions, since 2012, with the Far Eastern markets using around 17 of its 40 VLCC fleet. With eight older VLCCs permanently on storage, we see around 15 VLCCs capable of coming back into the global fleet, which is the exact amount required to service the 500,000 barrels per day the Iranians anticipate raising and increasing in their export production. So in conclusion, Iranian ships look like they will meet the requirements of shipping for Iranian oil. The insurance and dollar finance issues are complex and will take time to be resolved, in our view. So the entry of Iranian vessels and cargos into the market is likely to be delayed for some time to come. Lower oil price impact -- a quick refresh, of course. Low oil prices are good for tankers. I repeat this only because most commentary has ignored that this is a repeat of what happened last year, when we delivered the good results of 2015, following the oil price fall at the end of 2014. Remember, one of our key costs is bunkers, which are a direct derivative from crude, so this will improve our margins, should the lower prices hold. Whilst the effects of lower prices in boosting demand, it's always difficult to identify, history would suggest that demand is boosted by lower oil prices. There is no straight correlation, but above $100, it seems that the oil price's demand destructed and with an oil price below $50 in 2015, we clearly saw the demand for oil growing at a higher rate than predicted. This was particularly pronounced in developed countries such as Europe and the USA, which had strong demand growth last year and the USA enjoyed the most miles driven for eight years. Also the current geopolitical map would suggest production will remain elevated, given the market share ambitions of several key producing nations and the resilience of U.S. shale. Volatility, volatility is good, even in freight rates because it reflects a positive backdrop for the demand-supply balance. It means that the market is tight. It means that when there is a significant oversupply, then of course the market will fall, but by the same token as soon as there is a shortage, it goes back up again. The recent short-term adjustment in freight rates in early January was only to be expected as a result of this and it's similar to the short, sharp rate sell-off we saw in August, which quickly recovered. I will now move on to the outlook summary on Slide 15. In terms of the outlook for Euronav, all but two of our vessels are on the water currently, with 80% spot exposure. Per dollar invested, Euronav gives the highest exposure to the tanker spot market space. We continue to be active in managing our fleet and have completed two disposals, reducing the average fleet age and recording net book profits. The market remains constructive from our point of view. Demand for shipping is robust and freight rates reflect this. Euronav has just recorded a very respectable financial year of four consecutive quarters of almost equal contribution totaling approximately $350 million net income over 2015. Euronav continues to have a disciplined approach to capital. Our dividend policy is clear and helps to drive a discipline by having a lean balance sheet. We have augmented this approach recently with some share buybacks. Moving into the wider market outlook, we remain positive, as shown on Slide 16. We have mentioned several times already that we expect lower oil price to boost demand at some stage, but the activity of the majors in trying to capture capacity in the longer term time charters also reflects good underlying freight market and a certain significant concern on behalf of those oil majors towards the risk of increasing rates. Order book is manageable in our view, with the order book growth reduced since Q2 and in historic terms that it's at 18% on our analysis for VLCC. A new order of financing is also critically important. We expect to see continued pressure on asset prices and as we have said throughout 2015, this is something we believe will yield opportunities for the sector in general and for Euronav in particular. That concludes the formal part of the presentation. Thank you for listening and I will pass you back to the operator.

[Operator:]

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Noah Parquette of JPMorgan Securities. Please go ahead.

[Noah Parquette:]

I just have a couple industry questions. Firstly, I know it's very early, but have you seen any changes in trading as a result of the crude export ban being repealed yet?

[Paddy Rodgers:]

The crude export ban, you mean from the USA?

[Noah Parquette:]

Yes.

[Paddy Rodgers:]

Well, we have seen a couple of shipments and there has not been a flood of them, but we've seen, I think there has been one to Europe which was Chevron sold a cargo to [Vizo], which then took it up to their Swiss refinery and a couple went into China on smaller ships.

[Noah Parquette:]

Have you seen any new imports in the sense of the East Coast taking in crude instead?

[Paddy Rodgers:]

No, I would say that we haven't seen the East Coast taking in light oil from West Africa, but what we have seen is that as the discounts are probably going to get eliminated and by discounts, I don't mean the lower trading of WTI, I mean the specific shipment discounts on selling oil into the Gulf refiners. Those are disappearing as the opportunity to sell abroad is there or to sell foreign is there for the U.S. producers. We're starting to see a little bit more discharge of heavy crudes from the Middle-East Gulf into the Gulf Coast refiners. So, the long haul crudes, well there is a consequence of that export ban might not be in the shipment of oil but the elimination of a discount. When the discount gets eliminated, the Gulf Coast refiners can stop cracking LTO, which is actually not suitable to satisfying the complexity of their refiners, and buy-in cheaper discounted crudes from the Middle Eastern grades and crack those instead.

[Noah Parquette:]

Okay. Yes, I think that's the kind of issue we are trying to get our hands around. Okay. And just to follow up on your comments about the port congestion and the vessel inefficiencies, can you talk a little bit about what is there exactly driving that? Is that a function of the port infrastructure not being able to handle the demand? Or is it a mismatch between oil production and consumption? Can you give me a little bit of a sense of what's driving that efficiency?

[Paddy Rodgers:]

I think the answer is yes. I think if you imagine that there are three phases that we are probably talking about, one is loading at terminals where oil is produced, where obviously there's no cut in production, so lots of oil being produced and people wanting to ship it out. You see a lot of cargoes being loaded without the final destination, being steamed at 13 knots rather than possible at 14 or 15 on the VLCC or Suezmax, and then on arrival at discharge ports finding that there's a knowledge problem, that they actually don't have tank space to take the oil when it arrives. And we would say that that's only a function of throughput on the current infrastructure. So it's an indication that people are trying to manage logistically the amounts of oil that's available.

[Operator:]

And our next question comes from Jon Chappell of Evercore ISI. Please go ahead.

[Jon Chappell:]

Just two questions for you, Paddy and Hugo. Just bear with me, the first one is probably going to be long. When you look at Slides 11 and 12 there's obviously a massive disconnect between the time charter rates and the asset values that you haven't really seen before. Paddy, you've done a lot to explain that away and that all makes sense. But when we think about the uses of cash, and you talked about liquidity being stronger now in the long-term time charter markets, how do you weigh the remaining 20% of cash you are generating that's not part of the dividend and capital gains that are still in the older ships to buying up the second-have assets and putting them away on long-term time charters versus buying back your stock, which is obviously been trading at a complete disconnect from fundamentals and more on the macro concerns and is now at a huge discount to NAV?

[Paddy Rodgers:]

I think it's a good question and it's one that there is no simple answer to. I think that, as Hugo explained very concisely in his part of the presentation, obviously it's important for us to be recycling capital and using the credit lines as a method of taking capital out of ships that we are selling, along with a 20% reserve, and making sure that we are acquiring, as we did with the metro staff fleet, all cash acquisition done at the end of last term. I think as far as the TC positions are concerned, we're seeing the liquidity pushing -- compared to a year ago, it is definitely pushed out from a year ago. The liquidity seems to be at six months to a year. Now we think it's a year and a half to two years. What we are not seeing yet is real liquidity on five years. And I think that that's the point that would connect the TC rates to the asset value. So, I think that we are in a mixed position at the moment and watching and listening very carefully. We have got a very strong and firm policy on dividend, which really is part of the corpus of the process of going through the IPO and seeing a lot of investors. We thought this was a very sensible policy, one which kept our balance sheet lean, as well focused. And we help the shareholders are satisfied with the fact that the share has a yield. So I think that's very important. The recent selloff in the share price has been disappointing. But we see it rather more as the capital markets cash outflow rather than a victimization of Euronav. We have obviously issued a trading update and supported it with a small buyback program which was really just to put a marker down and underline the missed value in the general selloff of Euronav with everybody else. And I think that helped a little bit, just to bring people's attention back to the point. But as always, Jon, it's balance. We are making decisions. We're looking at projects and we're trying to evaluate the best course of action.

[Jon Chappell:]

And then just a second question, which you referenced earlier as far as the dividend policy you are committed to that, which I think is great. It's just the thought of, one, either going to a quarterly dividend policy and I realize it's not maybe the norm in Europe or maybe just declaring them a little bit earlier. And the reason I bring this up is you had a phenomenal second half of the year. It doesn't take a calculator to figure out what the dividend is going to be, 80% of $1.10 in normalized earnings is $0.88. But to not even declare that until late March, to not even get it until May on something that at that point is six months old it seems that maybe that could be part of the problem with the equity as well because when I look at whether it's fact said or Bloomberg or whatever, you are screening it at a 7% yield. But that $0.80 at your current stock price would be an 8%-plus yield on just a half-year dividend. So just a thought maybe more than a question, but tightening the time you little bit to actually have the earnings translate to the dividend in a little bit shorter timeframe.

[Hugo De:]

This is Hugo speaking. The fact of the matter is that we are incorporating Belgium, and so we have to follow Belgian rules. Believe me, if we could distribute dividend on a quarterly basis, we would. But on the other side, I think that's the reason why we have made our dividend policy so crystal clear that anyone can guess and can be very accurate on that guess of what the dividend will be. So I'm not so sure I share your thought that this is part of the problem. When I compare Euronav to our peers, I don't think that what happened to our stock is so much worse than others. Quite the contrary, I think that the behavior of our stock price has been marginally better than the others. So it is a pity, but it is a fact. And there is no way out of that one, unfortunately.

[Operator:]

And our next question comes from Chris Wetherbee of Citi. Please go ahead.

[Chris Wetherbee:]

I wanted to touch base just on the outlook for spot versus contract deployment. I want to make sure I understood the comment earlier on the Slide that the pie charts that show your employment as it stands today. Do you expect 2016 to be roughly in line with where you finish 2015 in terms of what's spot, what's contract? Or was it that the full year ended up roughly in line with where you were in the fourth quarter? I want to get a sense maybe how to think about that if the market plays out the way you are expecting in 2016.

[Hugo De Stoop:]

And it's true that it needs clarification. As, it's very difficult for us to forecast what our portfolio between spot and TC is going to be at the end of the current year or future year, so in fact, we were referring to 2015. And throughout the year it has evolved. We started the year at 85% spot. We ended the year at 80%. What is more important for you and the investors to understand is that I will repeat that. We are interested in locking in TC as long as the term is good. We know that the rate is good, but if you offer us one year or 18 months at $45,000 or $50,000, well, we believe that the next 12 to 18 and probably 24 months are going to be better than that. So we want to see 2.5, 3 years and more before we are interested in locking in. And then the percentage can vary. We could go to 30% or 40% of those type of contracts, especially if they are, like the majority of the current portfolio, with a profit split element on top of that.

[Chris Wetherbee:]

And just switching gears to the buyback for a second, obviously you gave us the update earlier this week, what you have purchased since the last market update. When you think about waiting for, potentially, asset prices is to fall, which is something that you guys have talked about, how aggressive can you be or would you expect to be with buybacks in the interim? Should we assume that there's a level of cash flow that's just going to automatically be pushed this way? How do you think about prioritizing those opportunities as you are waiting for asset prices to decline somewhat?

[Paddy Rodgers:]

Well, I think, Christian, that our view on it is very simple. It's only that we will look at it from time-to-time, and it's part of a full matrix of different ways that we evaluate how the Company is going to grow and how the Company is going to return value to shareholders. So I don't think there's a dividend policy that's in place, and from time to time we will be opportunistic.

[Chris Wetherbee:]

Okay, so no set continuation here? Obviously, the distribution is, from a dividend perspective, is the way you want to reward shareholders, primarily? That makes sense to me.

[Paddy Rodgers:]

Yes, and that's very much loud and clear, the way the market spoke to us over the last 14 months.

[Operator:]

And our next question comes from Amit Mehrotra of Deutsche Bank. Please go ahead.

[Amit Mehrotra:]

Just had a question around your comments around floating storage and potential for floating storage. I understand the economics are not positive at present. But I want to try to understand how floating storage works or how the economics work in a market that's already very strong on an underlying basis. I'd assume that it could be more profitable under very strong circumstances to actually trade the vessel than to keep it in storage. So can you offer some thoughts on that in terms of how wide the contango must get, in your view, to offset the opportunity costs associated with already a strong market?

[Paddy Rodgers:]

Well, I think we can all have slightly different views on how this kind of thing works. I think that what we would say, that there's an element of forced storage because all of a sudden we are seeing that our voyages are taking longer, that the charterer is not too bothered about arriving quickly so much is arriving certainly. And he certainly doesn't want us waiting at his cost on arrival. So there's a kind of natural implied storage in the speed that we are being asked to go to the discharge port. And we think that has been a feature of the whole year. Now, that's not what everybody talked about at the start of 2015, when the talk was all about contango. And the talk about contango in 2015 meant that a lot of ships were taken off charter and very few actually ended up loading a cargo that was to be stored. The reason was that by the time to ships had been booked and by that time, they might have been in position to load cargo, the oil price had recovered by $10 or $15 and the contango has been squeezed out. And for us, that didn't really matter because that price rise came on the back of very real demand and very good refining margins in both Europe, the Gulf Coast and the Far East, so for us it didn't really matter. This time around, there's lots of talk about people wanting to potentially cut production and talks -- Russia has indicated, they might be there to talk about it, but I'm afraid the genie is out of the bottle I think for 2016, which is that you have Russia overproducing, you have Saudi overproducing, you have Iran coming back to the market and you have Shale probably already cutting back, but with the ability to step up production again on short notice less than six months to get back into the game. And it doesn't look like those are a group of producers who can reach an agreement about exactly what's going to happen during the course of the year. So, production cut looks like its stalemated, just from the nature of the participants. If you take that as the base position, that production is not really going to get effectively cut. There might be some window dressing, there might be some marginal noises, but the reality is there's going to be no fundamental cut. Then you get two options for the market, either the result of that overproduction is an extremely low price for oil which drives demand further or alternatively people are going to find that they have to sell some cargos of oil at any price to get it off the field and away from the production point because if they're not cutting production, they can't hold the oil because they don't have the capacity. And in order to move it off the premises like that to ensure that it's not blocking up the system, they will have to drop the price low enough to create a contango against the forward price to make it worth somebody's while to store that oil. And that's how the contango will open up. And when that happens, then we go back to the 2008 to 2010 scenario, when as you well know between 10% and 15% of the tanker fleet ended up on floating storage.

[Amit Mehrotra:]

Got it, that's really helpful, thanks. And then one more question if I may on Paddy your comments about supply-demand remaining in balance for the next three years, I think that's kind of new, at least in terms of what you said in the press release and your public comments and just want to try to understand, why you feel comfortable sort of going out that long? I assume, it's obviously because of the positive demand factors and that's certainly the case, but you know sort of what the supply is going to be over the next year and a half. You can quantify it on a voyage-adjusted basis. Can you sort of talk about or quantify the demand relative to that incremental supply to make you sort of comfortable to make that type of multiyear call?

[Paddy Rodgers:]

Yes. Well, I think that the -- and the reason why we -- the reason why I do feel the need to maybe go the extra mile on trying to get people to look up a little bit and have a little bit more confidence is that I've seen some very good presentations recently from analysts and at the end of it, they have been almost apologetic that essentially they have come out as bulls for the tanker market. And I think there is this kind of anxiety around about calling a market up. Now, maybe that's a bit of a hangover from many people calling the dry cargo market up in 2014, I don't know, but there is a kind of hesitancy which surprises me. If you look at what the agencies are predicting, so I mean the IEA predicting 1.2 million barrels a day of growth is a really bullish statement for them at the start of the year. This time last year, they predicted 900,000 barrels for '15, they got 1.6 million, maybe 1.7 million and for them to be out at 1.2 now indicates that we should perhaps see even more. Peera were predicting 1.9 million for this year and this is before a 30% fall in the price of oil, so there's a very strong dynamic there which shouldn't be ignored. And the trouble is, because it's easy to count ships that's what people tend to count rather than to count what they think might be the way that the trade works out. Of course, there's a capital market crisis and this is what we've called the third wave of deleveraging. You had the housing market crisis. You had the European bank, in particular financial crisis. And then of course, you have this commodity devaluation, so the world is full of bad news and everybody seems to want to see the cup half-empty, but our feeling is that underlying all of that, there is quite positive feeling that quite a lot of stuff getting done and that the economy, the operating economy is coming along and that if we get low commodity prices still with low interest cost prices and cheap labor, then surely it's a good time for people to do business. So, there's just a feeling that things might be a little bit more positive than most of the market commentators are giving and clearly, it's not a very positive time if you have long Chinese stocks or if you got a very big investment in a commodity producer. So our feeling is there just needs to be a little bit of -- people have to take a little bit more water with their wine and take a slightly longer view. And I think that if you take that slightly longer view, if you give us the demand numbers that are being predicted, then I think we can manage the order book and if we can manage the order book, then who knows what 2018 will bring, but there's certainly no reason to be calling it down simply because the year before is up.

[Operator:]

And our next question comes from Gregory Lewis of Credit Suisse. Please go ahead.

[Gregory Lewis:]

Paddy, I guess my first question is for you. It seemed like in the second half of 2015, there was lot of vessels coming to market in the second hand market for sale. And it didn't seem like we've seen a lot of transactions really take place. As we sit here now and I guess in late January, are those vessels still out there for sale? And have bid/asks come down? Or should we potentially see a pickup in second-hand transactions over the next couple quarters?

[Paddy Rodgers:]

So I think it's a good question and I think the fact that the market has been a little bit quiet -- it's just that the vessels are out there on board, and again, we feel there is still quite a lot of sellers out there and the critical issue really is the ability to raise capital. So there are a lot of things that hang together. I know that people try to back into this and say it means that nobody believes in the future because they are not prepared to buy. But the reality is that it's not quite like that. We can see that the kind of structured time charter with the long enough link to give the buyer some credit support for an acquisition is not really there. If you had a lot of time charters at five to seven years' length, then that would give credit support to somebody to raise capital to buy a ship. But that kind of credit support is not there. So, where are you going to get your money from? And I think that the issue is that the banks that land are pretty well deployed. Many of them are in some quite difficult portfolios at the moment, so they are not too eager to lend to new accounts. And of course, the tsunami of defaults that are coming on offshore is putting a big shadow over the banks' lending programs for 2016. So we're just deleveraging. And if that's going to carry on through the offshore and shipping, then of course that's going to put pressure on prices. And sellers will find it difficult to find a buyer. So it looks to me like there's a bit of a spread and, as a result of that, a lack of liquidity.

[Gregory Lewis:]

Okay, great. And then, Hugo, as we come through the Q4 numbers it looked like you pay down a substantial amount of debt in the quarter. Was that just a timing issue or what was -- the cash was just available? What was the sort of thoughts around of retiring or paying down that debt?

[Hugo De Stoop:]

Yes, Greg, that's a very good question. As I explained during the earlier part of the call, the way we manage cash at Euronav is that we park it in our revolving facilities. And two out of three of our main credit facilities have a large revolving element, which means that is completely committed and available to us. But indeed, we parked it there so that we have less debt outstanding and therefore less interest to be paid on a yearly basis. We always try to keep a cash position, a cash-cash net position of around $80 million to $100 million.

[Operator:]

And our next question comes from Ben Nolan of Stifel. Please go ahead.

[Stephen Fitzworth:]

This is Stephen Fitzworth on for Ben Nolan, just a quick question about your FSO vessels. Have you made any progress in renewing those contracts?

[Paddy Rodgers:]

At the moment, we have not made any progress in renewing them. It's a constant, ongoing discussion.

[Stephen Fitzworth:]

Okay. Are you seeing a lot of demand out there? Do you think they will be extended?

[Paddy Rodgers:]

I think that our views haven't really changed on it. We have always in very confident that the vessels have an unparalleled performance in having zero downtime since they went online and that they provide a tailor-made and perfect solution to the problems of that field. That field remains viable and that field is the primary source of exports of oil for Qatar. So we don't see any of the building blocks of our confidence shaken by anything that's gone on in the oil price, nor yet in anything that is going on locally. So our feeling is that it's full steam ahead. But this is obviously quite a difficult time for anybody who is on the commodity side on production to make long-term decisions. So we presume that that's probably holding up their thinking.

[Operator:]

Our next question comes from Mike Webber of Wells Fargo. Please go ahead.

[Mike Webber:]

A couple questions, a lot of ground has already been covered but I did quickly want to go back to, Paddy, actually one of your answers to Jon's question. You kind of touched on this but I think it's probably worth highlighting that around the dividend policy obviously, the market has blown out yields across the space. And seeing pressure put on dividends and the reluctance from other corporates to continue paying them, just given the fact that there's limited credit from equity investors for those larger payouts. So just maybe if you could quickly give your take on how the market's reaction or the market's credit it gives for that yield, how does that impact your policy on a go-forward basis, if at all?

[Paddy Rodgers:]

Yes. But I think, Mike -- I hear what you are saying because I know that your area of focus very much on MLPs was about a yield-driven play. But we've explained a little bit our policy's based around trying to have a lean balance sheet and assuring that the shareholder gets rewarded in two ways for holding Euronav stock -- one, that we work very hard at liquidity to ensure that they always have the ability to build and also to exit positions when they want to. And all the time that they are holding, they know that management is going to be disciplined, not make any bad decisions but return cash value to them. So it's part of the management process and the discipline. I think that if we looked at the selloff in our share price, we would see that much more related to a kind of correlation between the VIX index and people's fear for volatility stocks at this time. And I think that you could create all kinds of scenarios for returning value to shareholders. But ultimately, if the fund managers don't sell that stock, it's an effector which we consider to fall into certain criteria to be sold at this time, then these things happen. And I think we have to be pragmatic about that.

[Mike Webber:]

Fair enough, fair enough. Just a couple of questions on the space, and really, more along the lines of some core demand figures, but you mentioned some of the macro pressures. And there's almost this kind of dismissive attitude towards macro in general, almost that it's somehow a noise and not fundamental in nature. But you've made the case that right now your stock is more heavily levered to Brent than it is today rates. And we would probably make the case that you are really not specifically levered to Brent but maybe the underlying demand weakness that might have caused the last few innings of the weakness we've seen in crude prices, specifically some of the headlined Chinese risks. So I guess my question, and you probably know where I am going with this but just when you think about demands in and around China, and if you were to break it down from core demand, just based on consumption and then kind of manufactured demand that might be FBR fills or refining quotas, can you talk to both of those growth rates and both of those demand sources and how you think about those in terms of tenor and then health?

[Paddy Rodgers:]

Yes. I think the broad and I don't know how much consensus there is around it. But the broad analysis of the number so far in 2015 seems to be about 2.5% growth in demand last year, 8% or just under 9% growth in imports to China. I think people also seem to coalesce around a figure that's approximately 1 million barrels a day of export of their products in China. So we think there's also another figure in there, which is exactly how efficient and what the prospects are for domestic production from Chinese oilfields, which is falling rather than rising. And there are no new discoveries. So that makes up the view of how much import you are going to need. I think as a shipper, obviously, we are very much more focused on the import side because that is so heavily levered to shipping but that's of interest to us. I think as far as the storage goes, and it's really important because it's China starts importing really strongly from 2003 onwards. And it has grown consistently year-on-year. They are required to have or they should have coverage of their logistic time from buy to delivery right into use. So that's probably a logistic chain of about 60 days for Chinese imports. And they also have that covered on their stock piles. So those stock piles are not opportunistic; it's not a question of the Chinese saying let's get lucky, buy cheap oil and then we will use it when oil becomes more expensive. As a matter of national security, which is clearly important to the Chinese, then they need to make sure that they have diversity of supply and that within country they have enough length of storage to ensure that they could withstand a shock like the ones that the Americans and Europeans faced in 1973 and 1978.

[Mike Webber:]

Fair enough. I see a similar question around probably the other major disconnect, and you already touched on this, around asset values and day rates. I'm just curious; we have actually seen asset values slide a little bit, I guess, this year. I'm curious how much of that you think is from if it's at all from discounting from shipyards around new builds, how much of that is to actually attract interest, just given a limit or some other spaces versus just pure deflation? And I guess you could probably proxy this via their margins. But how much of that would you assign as being pure deflationary pressure on steel versus them getting a bit more creative and competitive, trying to attract a bit?

[Paddy Rodgers:]

Yes. No, I think that there's no question that there's a bit of room that has opened up on the potential for shipyards to come in with lower pricing just because they have lower energy costs, lower steel costs. And they are still on dollar sales against local currency, labor. So all around, they should have a bit more flexibility in the yard. And I think you are right that there is no question that if we say that a lot of the pricing of the last four or five years has been based around the impact of quantitative easing, then of course when it ended prices would come down in dollar nominal terms.

[Mike Webber:]

One more and I'll turn it over. And I don't think you guys have had an earnings call since you've had some pretty significant Board turnover. And I just wanted to throw out a high level question just around what, if any, changes should we expect in terms of long-term direction and strategy for Euronav in the current regime, relative to the one we just had?

[Paddy Rodgers:]

Mike, I think that it's a question of steady as she goes. I think that as we've explained to a lot of different audiences, even if it hasn't been an earnings call one, the architects of where we are were Marc and Peter. So the Saverys and Devarnos families saying to us in 2013, please, we are ship owners; please make us shipping investors, and so they are very much part of the direction that we are going in. And it's steady as she goes.

[Operator:]

And our next question comes from Spiro Dounis of UBS Securities. Please go ahead.

[Spiro Dounis:]

Just wanted to split hairs a bit, I realize a lot has been covered, but just to kind of get back to what Mike was asking on the dividend. I can only imagine when you initiated the 80% payout model, you envisioned or you didn't envision capital markets being quite like this and so I'm just going to ask it simply. I mean, is there any thought or any daylight between you and the dividend in that maybe you would temporarily suspend it not to not give shareholders anything, but to actually buyback stock more aggressively? This way you're still returning value in some form.

[Paddy Rodgers:]

Well, I just think -- I don't want to repeat myself too much, but I think that during the course of 2014 and 2015, we saw an enormous number of investors and I think that Euronav must be one of the companies that's closest to its share registry in the amount of time that we've made available to speak to shareholders. We shaped the dividend policy as Hugo explained earlier on about trying to give you the ability to guide themselves on what they thought the value of distribution would be from earnings, which we try to keep crystal clear and very-very simple to understand. So the idea was to create a huge clarity around Euronav, which would both give the third leg of support. I talked earlier about liquidity being a big leg of support for a shareholder, obviously some form of distribution or return to shareholder is important. And the third one was that it meant that they could have a high degree of confidence that management would look after their interests in ensuring that was a distribution to them. I don't think that anything has changed. I think that what we've seen is a period of high volatility and a bad start to 2016 on share values across the board. I think there's no time. This would be the wrong time to take a short-term message to a long-term view.

[Spiro Dounis:]

Fair enough. And then just last one from me. I realize you guys probably aren't talking to the shipyards that much, since you're not really placing new build orders, but just trying to figure out from that side of things maybe how or what is the effect of capacity to build VLCCs in any given year and have it come down? And I ask that just in the context of the fact that some yards aren't capable of giving refund guarantees anymore. They're obviously having financial difficulties. The populace in some of these countries are getting tired of subsidizing the losses and so just wondering from that perspective, can we continue to build VLCCs at this level or would it slowdown?

[Paddy Rodgers:]

I think it's a very -- that's a very interesting space to watch, isn't it? I don't think that -- as there's a little bit of everything in that question. My own feeling is that the yard itself is essentially a hole in the ground. So, boilerplate capacity, you are never going to get shipping analysts coming around and saying that there is less capacity to build ships as long as those holes are in the ground and they have a 900 ton crane above them, but that's not the shipping market. The shipping market is as you correctly identified, the ability of the yard to get support from the government in order to finance the business and the willingness then of the buyers to find the finances or to put in their own capital in order to acquire the ships. And we really think it's the financial side that's the governor rather than the nameplate shipyard capacity. And our feeling is that obviously, it's becoming more and more difficult. And it's not an unlimited number of names that want to take the risk of buying a ship. And it's not an unlimited number of names that actually have the end use for it.

[Operator:]

And our next question comes from Wouter Vanderhaegen of KBC Securities. Please go ahead.

[Wouter Vanderhaegen:]

A couple of questions from my side, I base myself upon what Clarkson's is reporting in terms of fixtures. I see no VLCC fixture on time charter contracts on the longer duration; let's say over two years, since the middle of December. Do you consider what is currently indicated of levels being at $44,000 on three years, $39,000 on five years as realistic numbers and where you would be able to fix some vessels on? And second question is you recently took delivery of the Alice. Can you comment on the first voyage? And I saw some comments in which she was reported as being fixed on a six month contract. Can you comment on that? And then the final question is for Hugo is, can you give us your share in the net debt of joint ventures being the joint venture vessels and the FSOs? Thank you.

[Paddy Rodgers:]

Wouter, I can't hear your voice. I'll take the first two questions and then Hugo can fill you in on the last one. So the first one was, yes, so the time charter market, the charterer has to have an internal -- and I say I mean a company corporate internal decision that they want to take time charter. And then they will go out and they will seek somebody to provide it at a pricing that they thought was the one that they wanted matched for their corporation. We as the owner cannot go up to a charterer's front door, knock on the front door and say, okay, I'll do five years for $20,000 a day, will you take me? Because even if the trader thought that that was quite an interesting position, probably he wouldn't be able to clear it on a reverse inquiry like that. So the market is very much -- it's a bit like the S&P market, in fact for the ships. It's really got to be driven by willing participants. So what Clarkson is doing with that index is not giving you a number that you can use; it's generally giving an indication of what was last done. And with that, of course, there's no liquidity indicator. So you don't know if there's an active market. So it's a funny old thing. But I would say that I don't see a lot I think there are two things running there as well. One might be your outlook on the shipping market. But also for a lot of these oil majors at the moment is the willingness to make any commitment of capital that might catch the attention of senior management because I can absolutely assure you there is no interest in any of the oil majors for spending forward cash flows or creating any kind of impression that they are overspending the company's money. Right now they are very, very defensive on cash flow. And then on the Alice, we didn't make a big deal about the Alice because it wasn't really a big deal. It's simply that one of our customers quite close to us had the opportunity to do a trade on diesel oil before the ship loaded any crude. And they asked us if we would do a short-term TC out to the shipyard. Suits us because it means we get our position on their account and it suits them because they can load a product rather than loading dirty. And obviously, once you've loaded dirty they couldn't load the product. So it's just a win-win short-term but it was nothing really to write home about.

[Hugo De Stoop:]

And Wouter, just to answer your question, it's 125.8 million our share only and you split that 52/48 or so and 74 for the vessels, i.e., for Suezmax and one VLCC.

[Wouter Vanderhaegen:]

Okay, thank you.

[Hugo De Stoop:]

But remember, in the statement that we publish with the press release its equity method.

[Operator:]

And our next question comes from Fotis Giannakoulis of Morgan Stanley. Please go ahead.

[Fotis Giannakoulis:]

Most of my questions have been answered. The only thing that I want to ask is about your investment policy. You left open the potential of buying back your shares, but what I want to ask is that there are many other companies that trade also at a steep NAV discount and sometimes steeper because of the smaller size, if there are any thoughts of potentially investing in any of your competitors or even making a competitive offer. And if you see that there is a ground for some consolidation in the current market, given the very low valuations of the stocks.

[Paddy Rodgers:]

Thank you very much for the question. It's a good one. I'm afraid that we are sufficiently arrogant to think that with the quality of people at Euronav we would never invest in somebody else's shares as a pure investment in shipping. I think that if we have a premium in Euronav it's because we've learned it and deserve it. So we will not be buying shares in other companies. But of course, if we saw and we do, I promise you, have our calculators out at all times, looking at what a combined entity might look like if we were able to buy somebody at the price shown on the Exchange and at least so that we keep in mind to see whether we think there's a combination there that would fulfill our requirements or our intentions for consolidation and the use of our share as a merger currency. So we are doing those maths and watching it all the time. And we will make sure you are the first to hear about it if we decide to go ahead with anything.

[Operator:]

And our next comes from Charles Rupinski of Seaport Global. Please go ahead.

[Charles Rupinski:]

You've been very thorough on the industry, so I just have just a little bit of color maybe to ask about. Do you have any view on West African cargoes to China versus the AG in the medium term, in terms of we've heard talk of it switching one way or the other. Clearly, West Africa has a greater ton-mile effect. And I'm just wondering whether it be the discount, Saudi discount being an issue, how you see that playing out over the next few months or few weeks. And the second question is, is something we should be factoring in deferred dry docking for the world fleet in terms of we've had very good rates and maybe there has been some deferred maintenance from some of your competitors or from private companies, that that might be a positive effect on supply-demand?

[Paddy Rodgers:]

I'm going to take your last point first because I think it's a very good one that industry commentators might overlook, which is that there's also you have no scrapping for a couple of years and that there's a certain pent-up there's a pent-up overhang there of ships that are either going to be quite a lot of work done on them or to go to scrap. So I think that that's in the system and could well be the thing that provides, if we were ever to suffer God forbid any rate weakness for a prolonged period of time that would build in a sort of natural buffer because there will be a number of ships that would be inclined to go to the scrap yard or come out of service if the rates fell at all. And the longer this goes on, the more important that becomes. So it's a very important point and one to be kept in mind. I think that, on the first point, China's lift just on the stats basis first of all, we see ourselves plenty of cargo out of the Caribbean and West Africa into China. And it's one of the main routes that we are interested in. But I think some statistical basis last year the loser by a couple of percentage over 2014 was Middle East Gulf. Russia was a slight gainer. So I think it's something like 46% or 48% of cargos into China came from the Middle East, 13% came from Russia and 25% came from the Atlantic basin. And then the rest of the world is the balance. So we don't feel that there's a great war going on there. When Iran comes back or as Iran comes back, we don't see China as being the natural buyer, just because they already buy plenty of Iranian oil. It's probably in the second tier of their buyers. There are other people that sell to them. But what we have seen from the first few intimations of cargos to move have been cargos to go from [inaudible] into Europe. So it looks much more like it will be a euro based French and Italian led or Greek led buying of Iranian oil to start with. That's, broadly speaking, where we see it at the moment.

[Operator:]

And our next question comes from Quirijn Mulder of ING. Please go ahead.

[Quirijn Mulder:]

Two questions from my side, very short ones because most questions have been answered already. The first one is about the Suezmax. What is the number of Suezmax you have fixed for 2016 and as a percentage of the total? And the second question is about what is your view on the, I'm sorry. I forgot it. Sorry. Go ahead.

[Paddy Rodgers:]

I'm just normally -- we have that in the press release. Hugo, do you have a number there or not?

[Hugo De Stoop:]

We have at the moment eight Suezmax fixed out of fleet of 22, but as, out of 22 for our joint venture, so accounting for 50%. We would like to maintain that ratio. And potentially maybe we find contracts that are of term that we like, i.e., more than 2.5, 3 years.

[Quirijn Mulder:]

And my second question is, then, on the option for the Metrostar, let me say the last four vessels. Probably I missed, but did you discuss that already? Or is that something which you are still looking at?

[Paddy Rodgers:]

We really wouldn't want you to use the term missed. We didn't forget them. We actively elected not to buy them. And the ships are still out there, and of course the key for us is time. So, we will see as we go along. Just to be clear, and I know that we made the statement a number of times, but I don't think it's inappropriate to make it again when negotiating that transaction we saw that the eight vessels fell into two separate groups, one which was much closer to earnings and which we considered almost to be effectively on the water so that when we raised capital against the commitment to buy them, we felt that there was going to be a return that was accretive to the Company, day one. I think on the second four, our view was that those were a good 18 months, on average, after the first four, and that that lack of time meant that, of course, we would not take the risk of taking a commitment to buy four ships without funding ourselves at the time we took the commitment. So, you would go 18 months with capital unrewarded on that basis, and that would be dilutive, we felt, to the shareholder. If we had felt that the lack of earnings for 18 months could have been compensated by a significant capital gain in the 18 months, then that would have given an implied yield to the decision. So, let's just take some proxy numbers. If we had looked at it and said, we wanted a 10% return, it was 18 months to delivery, therefore we should be reasonably confident that the ship would be worth 15% more at the time that it hit the water that when we committed ourselves in raising the capital to acquire the ship. And we didn't think that was the trend in the new building prices, so our view was to let it go, actively let it go. And then, of course, we are always open minded to acquire ships, depending on where we think we are relative to the value but, of course, relative to the operations and earnings.

[Operator:]

And our next question comes from George Berman of IFS Raymond James. Please go ahead.

[George Berman:]

Let me say first congratulations to a very good quarter and a very good year. I've got a quick question on the current state of the spot market prices. Obviously, they have come down from about $100,000 in the first week of January to currently about $50,000 on the VLCC side. I understand that there have been some changes made in the certification of ships going forward into 2016. Was there a move to pull forward some of these surveys of some of the larger, stronger companies into 2015, causing maybe a shortage of VLCCs in the strong December months? Or is that wrong information?

[Paddy Rodgers:]

I don't know what the sources, so I wouldn't want to just say that it's wrong information. But I would be absolutely astounded if anybody was scheduling a drydock for a winter month in a year like 2015. Most people going into 2015 have been pretty confident that the winter month would be very-very strong, so I doubt that anybody has taken a ship out of service deliberately during that period, but the surge in December was much more based around Chinese cargos coming into the market. So December was a very strong month for Chinese import demand and that played quite a significant role. And of course, it meant that things got slightly eased down in January, but again, I think that this is -- one of the things that we like to emphasize about this market is that there are three words that are critical to us. One is volatility and volatility may worry some people. We embrace it and it indicates that the market is very active and therefore in good balance. Seasonality, where normally we would have expected a much stronger winter demand from Northern Europe and America than we have done, but in fact, we largely until last week or so had a very mild winter. And of course the market as you all well know is cyclical, so think about those three things and they always have some bearing on what is happening on the day rates.

[George Berman:]

Then maybe one additional question, the announced and implemented share buyback program, obviously very welcomed by existing shareholders, can you comment on if you are actively pursuing additions to that buyback? Obviously, you've got a lot of cash on hand and buying shares back well below net asset value would obviously help the Company overall.

[Paddy Rodgers:]

Well, I just think that there are only so many times that we can answer that question and as it's the fourth time of asking, I decline to answer it, quite frankly.

[Hugo De Stoop:]

Maybe I will take over, Paddy. Maybe when I say people will understand it. We are committed to a dividend policy, so part of the cash that we have on hand is already actually committed to be paid in dividend later, i.e., even though it's in our bank account, we know that we are going to spend it. Above and beyond that, we did a little bit of share buyback, but we believe that stability in a policy is far more important than being hysterical about market reaction. Today we are not even one year into new year and we have seen share price declining only since the beginning of the year, i.e., in the last three weeks or four weeks. So let's wait and see for much-much-much longer period to see if there is any correlation between the dividend policy that we have and the share price, but I think its way-way-way-way-way too early to change our dividend policy. We aim at stability.

[Operator:]

And this concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

[Paddy Rodgers:]

Well, thank you all very much for coming on today. And appreciate your support. Thank you.

[Hugo De Stoop:]

Thank you.

[Operator:]

The conference is now concluded. Thank you attending today's presentation and you may now disconnect.