Cmb.Tech NV's Q2 2025: Contradictions Emerge in Dividend Policy, Ammonia Propulsion Timelines, and Golden Ocean Merger Impact

The above is the analysis of the conflicting points in this earnings call

Guidance:

• Outlook: positive on tankers and dry bulk; cautious on containers and chemicals; offshore wind demand remains healthy.
• Q3-to-date TCE: VLCC ~$32k/day; Suezmax ~$40k/day; Golden Ocean Newcastlemax ~$23.5k/day.
• Expect potential reversal of OPEC+ voluntary cuts by October; increased oil supply would support tanker rates.
• Anticipate rising iron ore exports from Brazil, Australia, and Guinea (Simandou), supportive for Capesize/Newcastlemax demand.
• Fleet days projected to rise from ~54,000 in 2025 to ~60,000 next year as newbuilds deliver.
• Dividend policy: intent to pay dividends quarterly on a discretionary basis; declared $0.05 for Q2, payable in early October.

Business Commentary:

* Merger and Fleet Expansion: - Cmb.Tech NV completed a merger with Golden Ocean to form the largest diversified maritime group, acquiring 206 Modern Eco vessels with another 44 on order. - The merger provided enhanced market exposure, with a combined fleet value of nearly $11 billion and a contract backlog approaching $3 billion.

• Financial Performance and Dividend:
• The company reported a loss of $7.5 million in Q2 2025, mainly due to Golden Ocean exposure and integration costs.

• Despite this, the Board decided to issue a $0.05 per share dividend, reflecting confidence in future cash flows.

• Market Outlook and Strategy:

• Alexander Saverys highlighted positive sentiment for tankers and dry bulk markets, with a focus on spot exposure in these segments.

• The company aims to leverage ammonia and hydrogen-powered ships, with a significant portion of its fleet capable of utilizing these fuels by 2030.

• Operational Efficiency and Cost Management:

• Cmb.Tech maintained strong operational efficiency, with a fleet average age under 6 years and a significant order book for newbuildings.

• The company is consolidating its platforms to optimize operational and administrative costs post-merger.

• Regulatory and Environmental Impact:

• The company is closely monitoring the potential U.S. resistance to stricter greenhouse gas regulations through the IMO, which could impact long-term chartering opportunities.
• Cmb.Tech remains optimistic about the regulatory environment and continues to invest in environmentally sustainable shipping solutions.

Sentiment Analysis:

• Management reported a Q2 net loss of ~$7.6M but highlighted a completed Golden Ocean merger, a new $2B financing facility with $750M undrawn revolvers, and a $0.05 interim dividend. Outlook is positive for tankers and dry bulk, cautious for containers and chemicals, and constructive on offshore wind. Q3-to-date TCEs were provided, signaling stable-to-supportive near-term trading conditions.

Q&A:

• Question from Evan Coscard (Clarksons Securities): How should we interpret the $0.05 dividend—one-off to appease Golden Ocean holders or a recurring payout?
  Response: Dividend will be paid quarterly on a discretionary basis; $0.05 is not a fixed run-rate and will be balanced against investment needs.

• Question from Evan Coscard (Clarksons Securities): Post-merger strategic focus—any changes to segments, asset sales, or ordering?
  Response: Business as usual across five divisions with emphasis on integration; will pursue opportunistic sales and newbuilds when pricing and cycle justify.

• Question from Kristof Samoy (KBC Securities): Status and terms of refinancing, target LTVs/covenants, and SG&A run-rate post-merger?
  Response: Refinancing largely complete; $1.6B of $1.86B CapEx financed; covenants shifted to value-adjusted equity; SG&A will trend lower as platforms integrate.

• Question from Kristof Samoy (KBC Securities): Impact of potential U.S. pushback on IMO 2028 GHG rules and effects on long-term charters, especially in dry bulk?
  Response: Outcome uncertain, but management still expects rules may pass; customer interest in ammonia/hydrogen projects remains intact.

• Question from Kimo Molez (Unknown): Stance on middle-aged Panamaxes/Capes and older tankers—should we expect significant disposals?
  Response: Aim to run a modern fleet; older ships could be sold opportunistically with no fixed timeline or quantity targets.

• Question from Kimo Molez (Unknown): Will the Fortescue ammonia-powered Newcastlemax burn ammonia from delivery; is bunkering ready?
  Response: Goal is to run on ammonia at delivery, contingent on molecule availability and bunkering logistics; too early to confirm.

• Question from Axel Styrman (Kepler Cheuvreux): Will African iron ore growth replace other sources, and from where?
  Response: Replacement depends on iron ore prices; base case is a net positive for ton-miles with volumes coexisting if pricing is supportive.

• Question from Axel Styrman (Kepler Cheuvreux): Considering the stock’s NAV discount, will you do share buybacks?
  Response: Buybacks are an option, but near-term focus is on integration and demonstrating operational leverage before capital returns beyond dividends.

• Question from Daniela De Lorenzo (ShippingWatch): How do you factor the shadow fleet into scrapping and supply/demand?
  Response: Shadow fleet is undesirable but persistent; not assumed to exit quickly, though operational attrition should rise over time.