International Seaways CEO Lois Zabrocky said the company continues to deliver value to its shareholders (source: International Seaways)
Tanker owner International Seaways continues to report large profits, notching earnings of US$144Min Q1 2024
The New York-listed shipowner turned in another big quarter in the first three months of 2024, topping analyst expectations for net income. Total liquidity was approximately US$626M as of 31 March 2024.
Fleet optimisation and earnings
International Seaways took delivery of three eco-MR tankers, out of the six vessels under contract to purchase, in Q2 2024. The remaining vessels are expected to arrive at the end of this quarter. The company also sold a 2009-built MR for net proceeds of US$23M.
Growing oil demand and a historically low tanker orderbook have helped fuel better earnings for International Seaways’ fleet of older MR tankers, which it said is making about US$38,000 per day on average in the last quarter.
International Seaways has declared options to build two additional dual-fuel ready LR1s at South Korea’s K Shipbuilding. Delivery for these two vessels is scheduled for Q3 2026, bringing its orderbook to six LR1 vessels under contract and ready for delivery beginning H2 2025 for an aggregate US$347M.
Contracted revenues have risen US$86M to over US$400M following three time charter agreements signed in April 2024 with an average duration of close to three years.
Returns to shareholders
Shareholder returns continue to remain high. The company said it paid a combined US$1.32 per share in regular and supplemental dividends in March 2024 and declared a combined dividend of US$1.75 per share payable in June.
“Following a record year for Seaways, our first quarter earnings increased over the prior quarter and marked the eighth consecutive quarter of strong earnings,” said president and chief executive Lois K Zabrocky.
“We continue to share in this upcycle with our shareholders by declaring a combined dividend of US$1.75 per share, which is 60% of our adjusted net income in the first quarter of 2024. Amid a period of continued market strength, we are also pleased to have taken advantage of compelling opportunities to renew our fleet and strengthen our balance sheet under the new credit facility.”
Shipping revenues for Q1 2024 were US$274M, down from US$287M for the same period last year.
Shipping revenues for the crude tankers segment were US$127M for Q1 2024, compared with US$132M for Q1 2023. TCE revenues also declined to US$124M from US$129M in the same period in 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 US$44,700, US$44,700 and US$40,900 per day, respectively, compared with approximately US$46,400, US$58,200 and US$50,800 per day, respectively in Q1 2023.
And last month, International Seaways extended its US$750M credit agreement from 2022, which had a remaining term loan balance of US$95M. The new agreement consists of a US$500M revolving credit facility that matures in January 2030.
International Seaways chief financial officer Jeff Pribor said this will provide the company with “financial flexibility through the extension of our maturity profile and the reduction of debt service costs, that lowers our spot break even rate to about US$13,500 per day. With ample cash and liquidity and a record low net loan-to-value, we are positioned to continue creating further value for the company and shareholders.”
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