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International Seaways Reports Second Quarter 2024 Results

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.

BALANCE SHEET ENHANCEMENTS

During the second quarter of 2024, the Company repaid $12 million in mandatory payments required under its existing debt facilities and sale leaseback arrangements. For the six months ended June 30, 2024, the Company repaid $44 million of mandatory debt payments.

In April 2024, the Company amended and extended the $750 Million Facility, under which the Company had a remaining term loan balance of $94.6 million and undrawn revolver capacity of $257.4 million prior to closing. The new agreement consists of a $500 million revolving credit facility (the “$500 Million RCF”) that matures in January 2030. Under the terms of the $500 Million RCF, capacity is reduced on a quarterly basis by approximately $12.8 million each quarter, based on a 20-year age-adjusted profile of the collateral vessels. The $500 Million RCF bears an interest rate based on term SOFR +185bps (the “margin”) and includes similar sustainability-linked features as included in the $750 Million Credit Facility, which could impact the margin by five basis points, that are aimed at reducing the carbon footprint, targeting expenditures toward energy efficiency improvements and maintaining a safety record above the industry average. Prior to executing the agreement, the Company prepaid the outstanding balance on the ING Credit Facility of $20.3 million and included the collateral vessel in the $500 Million RCF. The $500 Million RCF saves $19.5 million per quarter in mandatory debt repayments and reduces future interest expense through a margin reduction of over 85 basis points.

In June 2024, the Company borrowed $50 million under the $500 Million RCF. In July 2024, $30 million was repaid and the Company expects to repay an additional $20 million in August 2024. Following the repayments and amortizing capacity during the third quarter, the Company expects undrawn revolving capacity to increase to $540 million.

RETURNS TO SHAREHOLDERS

In June 2024, the Company paid a combined dividend of $1.75 per share of common stock, composed of a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend of $1.63 per share.

On August 6, 2024, the Company’s Board of Directors declared a combined dividend of $1.50 per share of common stock, composed of a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend of $1.38 per share of common stock. Both dividends will be paid on September 25, 2024, to shareholders with a record date at the close of business on September 11, 2024.

The Company currently has $50 million authorized under its share repurchase program, which expires at the end of 2025.

(1) This is a non-GAAP financial measure used throughout this press release; please refer to the section “Reconciliation to Non-GAAP Financial Information” for explanations of our non-GAAP financial measures and the reconciliations of reported GAAP to non-GAAP financial measures.

CONFERENCE CALL

The Company will host a conference call to discuss its second quarter 2024 results at 9:00 a.m. Eastern Time on Wednesday, August 7, 2024. To access the call, participants should dial (833) 470-1428 for domestic callers and (929) 526-1599 for international callers and entering 832060. 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 14, 2024, by dialing (866) 813-9403 for domestic callers and +44 204 525 0658 for international callers, and entering Access Code 931256.

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.

Forward-Looking Statements

This release contains forward-looking statements. In addition, the Company may make or approve certain statements in future filings with the U.S. Securities and Exchange Commission (the “SEC”), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to plans to issue dividends, the Company’s prospects, including statements regarding vessel acquisitions and disposals, expected synergies, trends in the tanker markets, and possibilities of strategic alliances and investments. Forward-looking statements are based on the Company’s current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in the Annual Report on Form 10-K for 2023 for the Company and in similar sections of other filings made by the Company with the SEC from time to time. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written and oral forward-looking statements attributable to the Company or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by the Company with the SEC.

Category: Earnings

Consolidated Statements of Operations

 

 

 

 

 

 

 

 

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Shipping Revenues:

 

 

 

 

 

 

 

 

Pool revenues

$

207,681

 

$

247,591

 

$

433,963

 

$

507,169

 

Time and bareboat charter revenues

 

31,139

 

 

26,112

 

 

62,188

 

 

39,262

 

Voyage charter revenues

 

18,589

 

 

18,500

 

 

35,659

 

 

32,902

 

Total Shipping Revenues

 

257,409

 

 

292,203

 

 

531,810

 

 

579,333

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Voyage expenses

 

5,561

 

 

3,868

 

 

9,034

 

 

7,678

 

Vessel expenses

 

67,840

 

 

65,151

 

 

131,221

 

 

123,920

 

Charter hire expenses

 

6,948

 

 

10,502

 

 

13,596

 

 

19,302

 

Depreciation and amortization

 

36,517

 

 

32,445

 

 

70,670

 

 

61,993

 

General and administrative

 

11,985

 

 

11,522

 

 

24,083

 

 

22,768

 

Other operating expenses

 

1,454

 

 

 

 

1,730

 

 

 

Third-party debt modification fees

 

168

 

 

13

 

 

168

 

 

420

 

(Gain)/loss on disposal of vessels and other assets, net

 

(27,852

)

 

26

 

 

(27,903

)

 

(10,722

)

Total operating expenses

 

102,621

 

 

123,527

 

 

222,599

 

 

225,359

 

Income from vessel operations

 

154,788

 

 

168,676

 

 

309,211

 

 

353,974

 

Other income

 

2,360

 

 

3,381

 

 

5,314

 

 

7,662

 

Income before interest expense and income taxes

 

157,148

 

 

172,057

 

 

314,525

 

 

361,636

 

Interest expense

 

(12,425

)

 

(17,914

)

 

(25,312

)

 

(34,861

)

Income before income taxes

 

144,723

 

 

154,143

 

 

289,213

 

 

326,775

 

Income tax provision

 

-

 

 

(381

)

 

-

 

 

(380

)

Net income

$

144,723

 

$

153,762

 

$

289,213

 

$

326,395

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding:

 

 

 

 

 

 

 

 

Basic

 

49,387,193

 

 

49,029,784

 

 

49,180,019

 

 

49,083,897

 

Diluted

 

49,721,858

 

 

49,404,837

 

 

49,550,928

 

 

49,525,282

 

 

 

 

 

 

 

 

 

 

Per Share Amounts:

 

 

 

 

 

 

 

 

Basic net income per share

$

2.93

 

$

3.13

 

$

5.88

 

$

6.64

 

Diluted net income per share

$

2.91

 

$

3.11

 

$

5.83

 

$

6.59

 

Consolidated Balance Sheets

 

 

 

 

 

 

($ in thousands)

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

176,141

 

$

126,760

Short-term investments

 

 

-

 

 

60,000

Voyage receivables

 

 

223,079

 

 

247,165

Other receivables

 

 

16,785

 

 

14,303

Inventories

 

 

1,850

 

 

1,329

Prepaid expenses and other current assets

 

 

12,228

 

 

10,342

Current portion of derivative asset

 

 

4,532

 

 

5,081

Total Current Assets

 

 

434,615

 

 

464,980

 

 

 

 

 

 

 

Vessels and other property, less accumulated depreciation

 

 

2,081,508

 

 

1,914,426

Vessels construction in progress

 

 

12,137

 

 

11,670

Deferred drydock expenditures, net

 

 

79,184

 

 

70,880

Operating lease right-of-use assets

 

 

14,778

 

 

20,391

Pool working capital deposits

 

 

33,238

 

 

31,748

Long-term derivative asset

 

 

1,888

 

 

1,153

Other assets

 

 

17,322

 

 

6,571

Total Assets

 

$

2,674,670

 

$

2,521,819

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

 

$

52,118

 

$

57,904

Current portion of operating lease liabilities

 

 

10,017

 

 

10,223

Current installments of long-term debt

 

 

49,598

 

 

127,447

Total Current Liabilities

 

 

111,733

 

 

195,574

Long-term operating lease liabilities

 

 

6,958

 

 

11,631

Long-term debt

 

 

663,054

 

 

595,229

Other liabilities

 

 

5,489

 

 

2,628

Total Liabilities

 

 

787,234

 

 

805,062

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Total Equity

 

 

1,887,436

 

 

1,716,757

Total Liabilities and Equity

 

$

2,674,670

 

$

2,521,819

Consolidated Statements of Cash Flows

 

 

 

 

 

 

($ in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

 

(Unaudited)

 

 

(Unaudited)

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income

 

$

289,213

 

 

$

326,395

 

Items included in net income not affecting cash flows:

 

 

 

 

 

 

Depreciation and amortization

 

 

70,670

 

 

 

61,993

 

Amortization of debt discount and other deferred financing costs

 

 

2,059

 

 

 

3,128

 

Deferred financing costs write-off

 

 

 

 

 

721

 

Stock compensation

 

 

3,633

 

 

 

3,873

 

Earnings of affiliated companies

 

 

 

 

 

20

 

Other – net

 

 

(433

)

 

 

(1,560

)

Items included in net income related to investing and financing activities:

 

 

 

 

 

 

Gain on disposal of vessels and other assets, net

 

 

(27,903

)

 

 

(10,722

)

Payments for drydocking

 

 

(24,425

)

 

 

(18,992

)

Insurance claims proceeds related to vessel operations

 

 

888

 

 

 

2,698

 

Changes in operating assets and liabilities

 

 

10,679

 

 

 

46,902

 

Net cash provided by operating activities

 

 

324,381

 

 

 

414,456

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Expenditures for vessels, vessel improvements and vessels under construction

 

 

(202,875

)

 

 

(188,068

)

Proceeds from disposal of vessels and other property, net

 

 

48,043

 

 

 

20,070

 

Expenditures for other property

 

 

(801

)

 

 

(586

)

Investments in short-term time deposits

 

 

(75,000

)

 

 

(175,000

)

Proceeds from maturities of short-term time deposits

 

 

135,000

 

 

 

135,000

 

Pool working capital deposits

 

 

(782

)

 

 

 

Net cash used in investing activities

 

 

(96,415

)

 

 

(208,584

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Borrowing on revolving credit facilities

 

 

50,000

 

 

 

 

Repayments of debt

 

 

(39,851

)

 

 

(192,856

)

Proceeds from sale and leaseback financing, net of issuance and deferred financing costs

 

 

 

 

 

169,717

 

Payments and advance payment on sale and leaseback financing and finance lease

 

 

(24,325

)

 

 

(112,786

)

Payments of deferred financing costs

 

 

(5,759

)

 

 

(1,146

)

Repurchase of common stock

 

 

 

 

 

(13,948

)

Cash dividends paid

 

 

(151,595

)

 

 

(177,565

)

Cash paid to tax authority upon vesting or exercise of stock-based compensation

 

 

(7,055

)

 

 

(5,009

)

Net cash used in financing activities

 

 

(178,585

)

 

 

(333,593

)

Net increase/(decrease) in cash and cash equivalents

 

 

49,381

 

 

 

(127,721

)

Cash and cash equivalents at beginning of year

 

 

126,760

 

 

 

243,744

 

Cash and cash equivalents cash at end of period

 

$

176,141

 

 

$

116,023

 

Spot and Fixed TCE Rates Achieved and Revenue Days

The following tables provides a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months ended June 30, 2024 and the comparable period of 2023. Revenue days in the quarter ended June 30, 2024 totaled 6,234 compared with 6,742 in the prior year quarter. A summary fleet list by vessel class can be found later in this press release. The information in these tables excludes commercial pool fees/commissions averaging approximately $858 and $859 per day for the three months ended June 30, 2024 and 2023, respectively.

 

 

 

Three Months Ended June 30, 2024

 

 

Three Months Ended June 30, 2023

 

 

 

Spot

 

 

Fixed

 

 

Total

 

 

Spot

 

 

Fixed

 

 

Total

Crude Tankers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VLCC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

46,350

 

$

37,339

 

 

 

 

$

52,307

 

$

43,056

 

 

 

Number of Revenue Days

 

 

828

 

 

273

 

 

1,101

 

 

781

 

 

294

 

 

1,075

Suezmax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

45,045

 

$

31,044

 

 

 

 

$

61,267

 

$

30,990

 

 

 

Number of Revenue Days

 

 

1,001

 

 

182

 

 

1,183

 

 

988

 

 

181

 

 

1,169

Aframax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

31,450

 

$

38,500

 

 

 

 

$

53,482

 

$

-

 

 

 

Number of Revenue Days

 

 

190

 

 

91

 

 

281

 

 

364

 

 

-

 

 

364

Total Crude Tankers Revenue Days

 

 

2,019

 

 

546

 

 

2,565

 

 

2,133

 

 

475

 

 

2,608

Product Carriers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aframax (LR2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

55,485

 

$

-

 

 

 

 

$

25,594

 

$

17,829

 

 

 

Number of Revenue Days

 

 

58

 

 

-

 

 

58

 

 

41

 

 

50

 

 

91

Panamax (LR1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

53,066

 

$

-

 

 

 

 

$

63,606

 

$

-

 

 

 

Number of Revenue Days

 

 

506

 

 

-

 

 

506

 

 

780

 

 

-

 

 

780

MR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

35,007

 

$

21,553

 

 

 

 

$

28,331

 

$

20,819

 

 

 

Number of Revenue Days

 

 

2,597

 

 

508

 

 

3,105

 

 

2,954

 

 

309

 

 

3,263

Total Product Carriers Revenue Days

 

 

3,161

 

 

508

 

 

3,669

 

 

3,775

 

 

359

 

 

4,134

Total Revenue Days

 

 

5,180

 

 

1,054

 

 

6,234

 

 

5,908

 

 

834

 

 

6,742

Revenue days in the above table excludes days related to full service lighterings. In addition, during 2024 and 2023, certain of the Company’s vessels were employed on transitional voyages, which are excluded from the table above.

During the 2024 and 2023 periods, each of the Company’s LR1s participated in the Panamax International Pool and transported crude oil cargoes exclusively.

Fleet Information

As of June 30, 2024, INSW’s fleet totaled 83 vessels, of which 63 were owned, 14 were chartered in and six contracted newbuildings.

 

 

 

 

 

 

 

 

Total at June 30, 2024

Vessel Fleet and Type

 

Vessels Owned

 

 

Vessels Chartered-in1

 

 

Total Vessels

 

 

Total Dwt

Operating Fleet

 

 

 

 

 

 

 

 

 

 

 

VLCC

 

4

 

 

9

 

 

13

 

 

3,910,572

Suezmax

 

13

 

 

-

 

 

13

 

 

2,061,754

Aframax

 

4

 

 

-

 

 

4

 

 

452,375

Crude Tankers

 

21

 

 

9

 

 

30

 

 

6,424,701

 

 

 

 

 

 

 

 

 

 

 

 

LR2

 

1

 

 

-

 

 

1

 

 

112,691

LR1

 

6

 

 

1

 

 

7

 

 

522,698

MR

 

35

 

 

4

 

 

39

 

 

1,951,525

Product Carriers

 

42

 

 

5

 

 

47

 

 

2,586,914

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Fleet

 

63

 

 

14

 

 

77

 

 

9,011,615

 

 

 

 

 

 

 

 

 

 

 

 

Newbuild Fleet

 

 

 

 

 

 

 

 

 

 

 

LR1

 

6

 

 

-

 

 

6

 

 

441,600

 

 

 

 

 

 

 

 

 

 

 

 

Total Newbuild Fleet

 

6

 

 

-

 

 

6

 

 

441,600

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating and Newbuild Fleet

 

69

 

 

14

 

 

83

 

 

9,453,215

 

(1) Includes bareboat charters, but excludes vessels chartered in where the duration of the charter was one year or less at inception.

Reconciliation to Non-GAAP Financial Information

The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures may provide certain investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.

(A) Adjusted Net Income

Adjusted net income consists of net income adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. This measure does not represent or substitute net income or any other financial item that is determined in accordance with GAAP. While adjusted net income is frequently used as a measure of operating results and performance, it may not be necessarily comparable with other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net income, as reflected in the consolidated statement of operations, to adjusted net income:

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

($ in thousands)

 

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

 

Net income

 

$

144,723

 

 

$

153,762

 

$

289,213

 

 

$

326,395

 

Third-party debt modification fees

 

 

168

 

 

 

13

 

 

168

 

 

 

420

 

Write-off of deferred financing costs

 

 

-

 

 

 

555

 

 

-

 

 

 

721

 

(Gain)/loss on disposal of vessels and other assets, net of impairments

 

 

(27,852

)

 

 

26

 

 

(27,903

)

 

 

(10,722

)

Provision for settlement of multi-employer pension plan obligations

 

 

975

 

 

 

-

 

 

975

 

 

 

-

 

Adjusted Net Income

 

$

118,014

 

 

$

154,356

 

$

262,453

 

 

$

316,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (diluted)

 

 

49,721,858

 

 

 

49,404,837

 

 

49,550,928

 

 

 

49,525,282

 

Adjusted net income per diluted share

 

$

2.37

 

 

$

3.12

 

$

5.30

 

 

$

6.40

 

(B) EBITDA and Adjusted EBITDA

EBITDA represents net income before interest expense, income taxes, and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be a substitute for, net income or cash flows from operations as determined in accordance with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net income as reflected in the condensed consolidated statements of operations, to EBITDA and Adjusted EBITDA:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

($ in thousands)

 

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

 

Net income

 

$

144,723

 

 

$

153,762

 

$

289,213

 

 

$

326,395

 

Income tax provision

 

 

-

 

 

 

381

 

 

-

 

 

 

380

 

Interest expense

 

 

12,425

 

 

 

17,914

 

 

25,312

 

 

 

34,861

 

Depreciation and amortization

 

 

36,517

 

 

 

32,445

 

 

70,670

 

 

 

61,993

 

EBITDA

 

 

193,665

 

 

 

204,502

 

 

385,195

 

 

 

423,629

 

Third-party debt modification fees

 

 

168

 

 

 

13

 

 

168

 

 

 

420

 

Write-off of deferred financing costs

 

 

-

 

 

 

555

 

 

-

 

 

 

721

 

(Gain)/loss on disposal of vessels and other assets, net

 

 

(27,852

)

 

 

26

 

 

(27,903

)

 

 

(10,722

)

Provision for settlement of multi-employer pension plan obligations

 

 

975

 

 

 

-

 

 

975

 

 

 

 

Adjusted EBITDA

 

$

166,956

 

 

$

205,096

 

$

358,435

 

 

$

414,048

 

(C) Cash

 

 

June 30,

 

 

December 31,

($ in thousands)

 

2024

 

 

2023

Cash and cash equivalents

$

176,141

 

$

126,760

Short-term investments

 

-

 

 

60,000

Total Cash

$

176,141

 

$

186,760

(D) Free Cash Flow

Free cash flow represents cash flows from operating activities, less mandatory repayments of debt (including those under sale and leaseback agreements) less capital expenditures excluding payments made to acquire a vessel or vessels, which the Company believes is useful to investors in understanding the net cash generated from its core business activities after certain mandatory obligations.

($ in thousands)

2023

 

2024

For the three months ended:

June 30

 

September 30

December 31

 

March 31

 

June 30

Net cash provided by operating activities (1)

$

193,634

 

 

$

148,463

 

 

$

125,483

 

 

$

156,442

 

 

$

167,939

 

Repayments of debt (1)

 

(55,407

)

 

 

(132,152

)

 

 

(108,365

)

 

 

(19,538

)

 

 

-

 

Payments on sale and leaseback (1)

 

(78,167

)

 

 

(10,946

)

 

 

(12,233

)

 

 

(12,146

)

 

 

(12,179

)

Less: optional prepayments (2)

 

92,482

 

 

 

104,312

(3)

 

88,382

 

 

 

-

 

 

 

-

 

Expenditures for vessels (1)

 

(121,366

)

 

 

(4,150

)

 

 

(12,941

)

 

 

(26,420

)

 

 

(176,455

)

Expenditures for other property (1)

 

(62

)

 

 

(449

)

 

 

(436

)

 

 

(701

)

 

 

(100

)

Less: payments for acquiring vessels (2)

 

115,162

 

 

 

-

 

 

 

11,548

 

 

 

23,200

 

 

 

174,896

 

Free cash flow

$

146,276

 

 

$

105,078

 

 

$

91,438

 

 

$

120,837

 

 

$

154,101

 

(1)

Reflects current period balance on the face of the Consolidated Statement of Cash Flows, less the prior quarter’s balance on the face of the Consolidated Statement of Cash Flows. The captions have been adjusted for summary purposes; the complete list of captions are as follows, in order as in the table above: Net cash provided by operating activities, Repayments of debt, Payments and advance payment on sale and leaseback financing and finance lease, Expenditures for vessels, vessel improvements and vessels under construction, and Expenditures for other property. For the period ended September 30, 2023, Repayments of Debt include the line item Premium and fees on extinguishment of debt.

(2)

Payments for vessels under construction represent the contractual payments on three dual-fuel VLCCs that delivered in the first half of 2023 and contractual payments for the LR1 newbuildings in Q4 2023. In the three months ended 2024, the Company announced the acquisition of 6 eco MRs for a total contract price of $232 million, of which 10% was paid in deposit in the same quarter. The vessels delivered during the second quarter of 2024.

(3)

In connection with the execution of the revolving credit facility (“$160 Million Facility”) in the third quarter of 2023, the Company drew $50 million as of September 30, 2023. During October 2023, the Company repaid the outstanding amounts on the facility.

(E) Time Charter Equivalent (TCE) Revenues

Consistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

($ in thousands)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Time charter equivalent revenues

 

$

251,848

 

$

288,335

 

$

522,776

 

$

571,655

 

Add: Voyage expenses

 

 

5,561

 

 

3,868

 

 

9,034

 

 

7,678

 

Shipping revenues

 

$

257,409

 

$

292,203

 

$

531,810

 

$

579,333

 

 

Contacts

Investor Relations & Media Contact:

Tom Trovato, International Seaways, Inc.

(212) 578-1602

ttrovato@intlseas.com

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