|
New York - 7 August 2024
International Seaways, Inc. (NYSE: INSW) (the "Company," "Seaways," 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 2024.
HIGHLIGHTS & RECENT DEVELOPMENTS
Strong Quarterly Earnings:
• Net income for the second quarter of 2024 was $144.7 million, or $2.91 per diluted share.
• Adjusted net income (1) for the second quarter of 2024 was $118.0 million, or $2.37 per diluted share.
• Adjusted EBITDA (1) for the second quarter of 2024 was $167.0 million.
Fleet Optimization Program:
• Took delivery of six eco MRs, built between 2014 and 2015, in the second quarter of 2024.
• Sold three MRs with an average age of 15.8 years, for net proceeds of $72 million after fees and commissions. Two vessels were delivered to the buyers during the second quarter of 2024 and the third ship was delivered in mid-July 2024.
• As a result, the Seaways MR fleet average age was reduced by one year.
Balance Sheet Enhancements:
• Executed an amendment on senior secured debt facilities, increasing our revolving credit capacity by nearly $150 million and reducing mandatory repayments by nearly $20 million per quarter, leading to a reduction of spot cash break even costs by $3,000 per day.
• Total liquidity was approximately $682 million as of June 30, 2024, including total cash (1) of $176 million and $506 million undrawn revolving credit capacity.
• Net loan-to-value remained historically low at approximately 14% as of June 30, 2024.
Returns to Shareholders:
• Paid a combined $1.75 per share in regular and supplemental dividends in June 2024.
• Declared a combined dividend of $1.50 per share to be paid in September 2024, representing 64% of adjusted net income (1) for the second quarter.
• Following the dividend payment in September 2024, combined dividend payments over the last twelve months will aggregate to $5.82 per share, representing a dividend yield of over 12%.
"We maintained strong momentum in the second quarter, drawing on Seaway's substantial cash flows to continue to execute the Company's balanced capital allocation strategy for the benefit of shareholders," said Lois K. Zabrocky, International Seaways President and CEO. "We continued to renew our MR fleet, one of the strongest earning classes, with the acquisition of six modern vessels and sales of older tonnage. At the same time, we increased our liquidity to position the Company for future growth while returning a 12% yield to shareholders."
Ms. Zabrocky added, "We believe markets will continue to show strength based on sustained attractive supply and demand fundamentals, highlighted by positive oil demand trends, higher ton-mile demand, and limited shipyard capacity for new orders, which will inhibit any significant volume of tanker deliveries for the foreseeable future. We expect to take further advantage of these dynamics moving forward, as we focus on building our track record of opportunistic investment in the fleet and compelling shareholder returns."
Jeff Pribor, the Company's CFO stated, "Over the last twelve months, Seaways has generated free cash flow (1) of nearly $475 million, underscoring our significant operating leverage and boding well for future value creation. In addition, we enhanced our free cash flow (1) during the second quarter with the execution of the new revolving credit facility that reduced our mandatory debt repayments by about $20 million per quarter and lowered spot breakeven rates. Additionally, the new revolving credit capacity allows us to maintain a level of enhanced financial flexibility to pursue additional growth opportunities. With a historically strong balance sheet, highlighted by liquidity of $682 million, and supported by long-term market tailwinds, we believe we are ideally positioned to optimize shareholder returns."
SECOND QUARTER 2024 RESULTS
Net income for the second quarter of 2024 was $144.7 million, or $2.91 per diluted share, compared to net income of $153.8 million, or $3.11 per diluted share, for the second quarter of 2023. The decrease in results in the second quarter of 2024 was primarily driven by a decrease in TCE revenues (1) and an increase in depreciation partially offset by gains on the sale of two vessels in the second quarter of 2024.
Shipping revenues for the second quarter were $257.4 million, compared to $292.2 million for the second quarter of 2023. Consolidated TCE revenues (1) for the second quarter were $251.8 million, compared to $288.3 million for the second quarter of 2023.
Adjusted EBITDA (1) for the second quarter was $167.0 million, compared to $205.1 million for the second quarter of 2023.
Crude Tankers
Shipping revenues for the Crude Tankers segment were $125.4 million for the second quarter of 2024, compared to $152.2 million for the second quarter of 2023. TCE revenues (1) were $120.9 million for the second quarter, compared to $148.9 million for the second quarter of 2023. This decrease was attributable to a decrease in spot rates as the average spot earnings of the VLCC, Suezmax and Aframax sectors were approximately $46,400, $45,000 and $31,500 per day, respectively, compared with approximately $52,300, $61,300 and $53,500 per day, respectively, during the second quarter of 2023.
Product Carriers
Shipping revenues for the Product Carriers segment were $132.0 million for the second quarter of 2024, compared to $140.0 million for the second quarter of 2023. TCE revenues (1) were $131.0 million for the second quarter, compared to $139.4 million for the second quarter of 2023. This decrease is attributable to a reduction in revenue days due to the decrease in the chartered-in fleet, vessel sales and an increase in offhire from drydocking and repairs.
FIRST HALF 2024 RESULTS
Net income for the first half of 2024 was $289.2 million, or $5.83 per diluted share, compared to net income of $326.4 million, or $6.59 per diluted share, for the first half of 2023.
Shipping revenues for the first half of 2024 were $531.8 million, compared to $579.3 million for the first half of 2023. Consolidated TCE revenues (1) for the first half of 2024 were $522.8 million, compared to $571.7 million for the first half of 2023.
Adjusted EBITDA (1) for the first half of 2024 was $358.4 million, compared to $414.0 million for the first half of 2023.
Crude Tankers
Shipping revenues for the Crude Tankers segment were $252.2 million for the first half of 2024, compared to $284.6 million for the first half of 2023. TCE revenues (1) for the Crude Tankers segment were $244.8 million for the first half of 2024, compared to $278.2 million for the first half of 2023.
Product Carriers
Shipping revenues for the Product Carriers segment were $279.6 million for the first half of 2024, compared to $294.8 million for the first half of 2023. TCE revenues (1) for the Product Carriers segment were $278.0 million for the first half of 2024 compared to $293.5 million for the first half of 2023.
FLEET OPTIMIZATION PROGRAM
During the second quarter, the Company took delivery of six modern MR vessels for an aggregate consideration of $232 million. In connection with the acquisition of the six vessels, the Company issued an aggregate 623,778 common shares to the sellers, representing 15% of the aggregate consideration. The remaining 85% of aggregate consideration was funded with cash on hand.
The Company has sold three vessels as of July 31, 2024. In the second quarter of 2024, a 2009-built MR and a 2008-built MR were sold for aggregate net proceeds of $48 million. In July 2024, the Company sold another 2008-built MR for net proceeds of approximately $25 million. In each of the vessel sales, the Company recorded a gain on sale, of which $28 million was recognized during the second quarter.
During the second quarter, the Company entered into three new time charter agreements on two 2009-built MRs and a 2014-built LR2. The charters have durations of around three years and were delivered to the charterers during the third quarter. As a result of the agreements, future contracted revenues increased by $86 million.
The Company entered into contracts and declared options to build a total of six scrubber-fitted, dual-fuel (LNG) ready, LR1 vessels in Korea with K Shipbuilding Co, Ltd at a price in aggregate of approximately $359 million. The vessels are expected to be delivered beginning in the second half of 2025 through the third quarter of 2026. These vessels are expected to deliver into our niche Panamax International Pool, which has consistently outperformed the market.
Full report
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 82 vessels, including 13 VLCCs, 13 Suezmaxes, five Aframaxes/LR2s, 13 LR1s (including six newbuildings), and 38 MR tankers. 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
