International Seaways Reports Second Quarter 2021 Results

New York - 9 August 2021

International Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”), one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products, today reported results for the second quarter of 2021.

Highlights

• Subsequent to the end of the quarter, INSW completed the previously announced merger with Diamond S Shipping Inc. (NYSE: DSSI), creating the largest U.S.-listed diversified tanker company. The transaction significantly enhances INSW’s scale in both the core crude and product markets and will generate approximately $32 million in cost and revenue synergies, expected to be realized within 2022.

• Immediately prior to the closing of the merger, INSW returned capital to shareholders through a dividend of $31.5 million, or $1.12 per share.

• Net loss for the second quarter was $18.8 million, or $0.67 per diluted share, compared to net income of $64.4 million, or $2.24 per diluted share, in the second quarter of 2020. Net loss for the current quarter reflects the impact of the disposal of vessels, including impairments, and merger related charges aggregating $4.5 million. Net loss excluding these items was $14.3 million, or $0.51 per diluted share.

• Cash(A) was $133.6 million as of June 30, 2021; total liquidity was $173.6 million, including $40 million of undrawn revolver capacity, compared to $255.7 million as of December 31, 2020.

• Paid a regular quarterly cash dividend of $0.06 per share in June 2021.

• Has enacted a post-merger asset optimization program which has resulted in:

    • The sale of a 2002-built VLCC which, delivered to buyers in the third quarter, and agreed to sell four 2002/2003-built Panamaxes, as well as agreeing to sell seven MRs acquired in the merger.

    • A full fleet review where INSW is continually exploring the sale of its least efficient or otherwise non-core assets

"During the second quarter, Seaways maintained an unrelenting focus on strengthening our industry position and enhancing our ability to create long-term value for stakeholders,” said Lois K. Zabrocky, International Seaways’ President and CEO. “We are excited to have completed our transformational and highly accretive merger with Diamond S last month, solidifying Seaways’ status as an industry bellwether with enhanced scale, capabilities and significant financial strength. With a diversified 100-vessel fleet of crude and product tankers that provides considerable operating leverage, we are poised to benefit from positive long-term industry fundamentals, as well as near-term developments, notably recovering global oil demand, continued inventory destocking, and increased OPEC production."

Ms. Zabrocky continued, "Our strategic focus remains on achieving the highest operational standards, executing our disciplined and balanced approach to capital allocation and preserving our financial strength, while concentrating on achieving the considerable economies of scale that have been made possible by the merger. By combining two leading U.S.-based tanker owners with first-rate teams and high-quality fleets, we have further strengthened our commitment to operational excellence, sustainability and meeting the evolving needs of leading energy companies. As we move forward, we will also continue to prioritize returning capital to shareholders, as highlighted by our recent merger-related $31.5 million, or $1.12 per share, special dividend, our regular quarterly dividend, as well as our outstanding $50 million share repurchase authorization. Of note, we have now paid over $70 million to shareholders since 2020 in the form of stock buybacks and dividends."

Jeff Pribor, the Company’s CFO, added, "Our completed merger is highly accretive to earnings and cash flow, and we continue to expect cost synergies in excess of $23 million and revenue synergies of $9 million to be fully realizable within 2022. Importantly, our significant pro forma cash and liquidity positions, as well as our overall balance sheet strength and ongoing support from our industry leading banking group, will continue to serve us well in a challenging rate environment."



Second Quarter 2021 Results
Net loss for the second quarter of 2021 was $18.8 million, or $0.67 per diluted share, compared to net income of $64.4 million, or $2.24 per diluted share, for the second quarter of 2020. The decline in the second quarter of 2021 results primarily reflects significantly lower TCE revenues(B), which was partially offset by lower vessel expenses, depreciation and amortization, charter hire expenses and interest expense. Net loss for the first half of 2021 was $32.1 million, or $1.15 per diluted share, compared to net income of $97.4 million, or $3.35 per share, for the first half of 2020.

Consolidated TCE revenues for the second quarter were $44.7 million, compared to $135.3 million for the second quarter of 2020. Shipping revenues for the second quarter were $46.3 million, compared to $139.7 million for the second quarter of 2020. Consolidated TCE revenues for the first half of 2021 were $89.9 million, compared to $255.0 million for the first half of 2020. Shipping revenues for the first half of 2021 were $93.1 million compared to $265.1 million for the first half of 2020.

Adjusted EBITDA(C) for the second quarter was $9.8 million, compared to $96.3 million for the second quarter of 2020. Adjusted EBITDA was $20.5 million for the first half of 2021, compared to $170.5 million for the first half of 2020.

Crude Tankers
TCE revenues for the Crude Tankers segment were $31.1 million for the second quarter compared to $105.9 million for the second quarter of 2020. $54.8 million of this decrease primarily resulted from the impact of lower average rates in the VLCC, Suezmax, Aframax and Panamax sectors, with average spot earnings declining to approximately $13,700, $18,500, $8,600 and $16,500 per day, respectively. Also contributing to the decrease in TCE revenues was the impact of a 238-day reduction in VLCC revenue days, aggregating $16.5 million; a $2.0 million days-related decline in the Aframax fleet as a result of the sale of an older Aframax in 2020; and a $1.2 million decrease in revenue in the Lightering business in the second quarter. Shipping revenues for the Crude Tankers segment were $32.5 million for second quarter of 2021 compared to $110.4 million for the second quarter of 2020. TCE revenues for the Crude Tankers segment were $67.0 million for the first half of 2021, compared to $194.7 million for the first half of 2020. Shipping revenues for the Crude Tankers segment were $70.1 million for the first half of 2021, compared to $204.1 million for the first half of 2020.

Product Carriers
TCE revenues for the Product Carriers segment were $13.6 million for the second quarter, compared to $29.4 million for the second quarter of 2020. The decrease is primarily attributable to lower period-over-period average daily blended rates earned by the LR2, LR1 and MR fleets, which accounted for a decrease in TCE revenues of approximately $14.4 million. Average spot rates fell during the second quarter of 2021 to approximately $15,300 and $10,600, respectively, for the LR1 and MR fleets. In addition, fewer revenue days in the MR fleet during the second quarter due to the redelivery of a time chartered-in MR to its owner in July 2020 contributed an aggregate decrease in TCE revenues of approximately $1.3 million. Shipping revenues for the Product Carriers segment were $13.8 million for the second quarter of 2021, compared to $29.3 million for the second quarter of 2020. TCE revenues for the Product Carriers segment were $22.8 million for the first half of 2021, compared to $60.3 million for the first half of 2020. Shipping revenues for the Product Carriers segment were $23.0 million for the first half of 2021, compared to $61.0 million for the first half of 2020.

Completed Merger with Diamond S Shipping
Subsequent to the end of the second quarter, the Company completed its previously announced merger with Diamond S Shipping Inc. (“Diamond S”). The Company expects to achieve cost synergies in excess of $23 million and revenue synergies of $9 million, which are expected to be fully realizable within 2022. International Seaways is now the second largest U.S.-listed tanker company by vessel count with approximately 100 vessels and the third largest by deadweight tons (“dwt”), aggregating approximately 11.0 million dwt.

In accordance with the terms of the Merger Agreement, which was approved by INSW and Diamond S shareholders at their respective special meetings held on July 13, 2021, pre-merger INSW shareholders own approximately 55.75% of the equity of the combined company and former Diamond S stockholders own approximately 44.25%. On July 15, 2021, pre-merger INSW shareholders of record as of July 14, 2021, received a special dividend of $1.12 per share.



Vessel Sales
During the second quarter of 2021, the Company agreed to sell a 2002-built VLCC, a 2002-built Panamax and a 2003-built Panamax. The 2002-built VLCC delivered to its buyer in the third quarter of 2021. Additionally, the Company agreed to sell two additional 2002-built Panamaxes in July 2021, which are expected to deliver in the third and fourth quarter of 2021.

In addition, the Company agreed to sell seven MRs acquired in the Merger. Four of the MRs have delivered to the buyers and the balance are expected to be delivered during the third quarter of 2021.

The twelve vessels sold are expected to provide aggregate net proceeds of approximately $75 million after the repayment of debt.

Payment of Regular Cash Dividend
The Company’s Board of Directors declared a regular quarterly dividend of $0.06 per share of common stock on July 28, 2021. The dividend will be paid on September 23, 2021 to shareholders of record at the close of business on September 9, 2021.

Conference Call
The Company will host a conference call to discuss its second quarter 2021 results at 10:00 a.m. Eastern Time (“ET”) on Monday, August 9, 2021. To access the call, participants should dial (855) 940-9471 for domestic callers and (412) 317-5211 for international callers. Please dial in ten minutes prior to the start of the call. A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at https://www.intlseas.com.

An audio replay of the conference call will be available until August 16, 2021 by dialing (877) 344-7529 for domestic callers and (412) 317-0088 for international callers, and entering Conference ID 10159011.

About International Seaways, Inc.
International Seaways, Inc. (NYSE: INSW) is one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products in International Flag markets. International Seaways owns and operates a fleet of 97 vessels, including 13 VLCCs (including three newbuildings), 15 Suezmaxes, five Aframaxes/LR2s, 12 Panamaxes/LR1s, 44 MR tankers and six Handy tankers. Through joint ventures, it has ownership interests in two floating storage and offloading service vessels. International Seaways has an experienced team committed to the very best operating practices and the highest levels of customer service and operational efficiency. International Seaways is headquartered in New York City, NY. Additional information is available at https://www.intlseas.com.

International Seaways, Inc. press release