TankerCompass · CF Analysis

Cash flow decision tool · Operational gearing made explicit · Validated against OET 2023

TCE Revenue

$297m

— per year

EBITDA

$241m

EBITDA margin 81%

Operating Cash Flow

$180m

OCF/share $5.59

Distributable / share

$5.40

Yield at price 30: 18%

Inputs · fleet, rates, costs, financing

Fleet

# VLCC

# Suezmax

# LR2/Afra

TCE rates ($k/day)

VLCC TCE $62k

Suezmax TCE $56k

LR2/Aframax TCE $30k

Costs

Vessel opex incl. mgmt $9.1k/day

G&A annual $10m

D&A annual $40m

Maintenance capex $3m/yr

Financing

Net interest-bearing debt $700m

Effective rate 8.7%

Share count (m)

Share price (USD)

Load historical reference

Cash flow waterfall

Each bar shows a step in the cash flow calculation — from TCE revenue at the top to distributable cash flow at the bottom. Red bars are costs, green are positive.

Operational gearing

+$10k VLCC TCE →

+$0.85/share

in distributable cash

+$10k Suezmax TCE →

+$0.65/share

in distributable cash

What does this mean? This is the entire tanker thesis in two numbers. Operational gearing is constant as long as the fleet size is the same — the cost side doesn't move when rates rise. At cycle troughs this is a cost problem; at peaks it's a cash machine.

Breakeven thresholds

Cash-neutral VLCC TCE

$32k/day

OCF = maintenance capex

EBITDA breakeven

$15k/day

EBITDA = 0

Both thresholds are calculated by holding Suezmax/LR2 constant and finding the VLCC TCE that zeros out EBITDA and free cash flow respectively.

Sensitivity · VLCC TCE × Distributable cash per share

The table holds the Suezmax rate and all other parameters constant, and shows how distributable cash per share changes as VLCC TCE varies from $20k to $120k. Negative numbers in red = the company burns cash after maintenance. Use this to see how much of the historical cycle range actually produces profits vs. losses.

Validation · model vs. actual reported figures

Methodology and assumptions

▸

The CF model is a deliberately simplified rendering of a tanker operator's income statement, calibrated to reproduce OET's actual 2023 figures within ±5% when the correct inputs are chosen. The purpose is not accounting precision, but to make operational gearing immediately visible to the investor.

TCE revenue

Calculated as Σ (n_ships × TCE × 365 × utilization). Utilization is hardcoded to 98% — in line with OET's actual operating days (5,023 of 5,110 calendar days in 2023). TCE is by definition already net of voyage costs and commissions, so the model does not need a separate voyage opex input.

Vessel opex

total_ships × opex_day × 365. Includes crewing, insurance, lubes, stores, repairs and management fees — in line with OET convention. Default $9.1k/day matches OET 2023 exactly. Industry level typically sits at $7.5–10k for modern tonnage.

D&A and maintenance capex

D&A is a non-cash accounting expense added back in the OCF calculation. Maintenance capex (DD/SS costs) is the actual cash outlay to keep the fleet operational — typically $1–3m per ship at 5-year dry-dock, spread to ~$0.2–0.3m/ship/year on average. For OET with 14 ships this is ~$3m/year.

Effective interest rate

OET's effective rate in 2023 was ~8.7% (SOFR + ~3% margin plus some finance leases). 2025 level is closer to 6.5–7% thanks to lower SOFR and tighter margins. For Norwegian/European operators with ECA financing, the effective rate can be lower. The model takes effective rate directly (not base + margin) to keep inputs simple.

Distributable cash

Defined as OCF − maintenance capex. The model assumes debt service is handled via refinancing (typical for tanker operators rolling debt continuously), not as direct amortization from OCF. This matches OET's actual distribution practice, where in 2023 the company distributed $4.95/share (over 100% of net income) partly funded by rolling refi.

What the model does not capture

Three items should be kept as mental overlay: (1) Working capital swings can shift OCF by $20–40m quarter to quarter — the model shows normalized annual. (2) One-off items such as vessel disposals, insurance settlements and refi costs can shift reported figures materially. (3) Time charter coverage dampens both upside and downside from spot — OET historically had 20–40% TC coverage, the model assumes 100% spot.

The CF model pulls reference data from reference_data.js — add new companies to the data file to get more validation presets. Validated against OET 2023 within ±5%. Not investment advice.