International Seaways, Inc., one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products, today reported results for the third quarter of 2022.

HIGHLIGHTS & RECENT DEVELOPMENTS

• Record earnings for the second consecutive quarter: Net income for the third quarter was $113.4 million, or $2.28 per diluted share, compared to a net loss of $67.4 million, or $1.44 per diluted share, in the third quarter of 2021.
• Adjusted EBITDA(A) for the third quarter was approximately $157.1 million.
• Total liquidity was $475.5 million as of September 30, 2022, which includes cash(B) of $255.5 million and $220.0 million of undrawn revolver capacity.

Returns to Shareholders:

• Declared special dividend of $1.00 per share to be paid in December 2022 in addition to regular quarterly cash dividend of $0.12 per share
• Paid the regular quarterly cash dividend of $0.12 per share in September 2022, representing the eleventh consecutive quarter of quarterly dividends
• Repurchased 687,740 shares for approximately $20 million, representing an average price of $29.08 per share.
• Returned to shareholders a cumulative $129.3 million since the start of 2020.

Balance Sheet Enhancements:

• De-levered by repaying the total outstanding balance of $25 million on the 8.5% senior notes due June 2023.

We generated record earnings during the quarter, thanks both to a strong rate environment and the steps we have taken in the last several quarters to prepare for the market recovery,” said Lois Zabrocky, President and CEO of International Seaways. “We expanded our fleet with a diversified portfolio of crude and product tankers, which resulted in significant operating leverage to capture the strong rate environment. We’ve also enhanced our debt profile, extending our maturities and maintaining our low cash break-evens. These initiatives enabled us to continue our commitment to returning capital to shareholders. We paid our eleventh consecutive quarterly dividend, which we increased earlier in the year; we repurchased shares in accretive transactions; and we declared an additional special dividend of $1.00 per share, our second supplemental dividend in two years.”

Ms. Zabrocky added, “We remain committed to our balanced capital allocation strategy as the shipping cycle continues to evolve, and we are well-positioned to take advantage of one of the strongest markets in the last 10 years. We expect the market to remain robust as the focus on energy security drives regional imbalances of oil, creating strong demand for tankers to travel long distances for higher tanker utilization. The supply side outlook is also positive, as the global fleet is unlikely to substantially grow in the near term due to pending environmental regulations and limited newbuild capacity at shipyards already full of orders from other shipping sectors.”

Jeff Pribor, the Company’s CFO stated, “Our substantial earnings power was evident in third quarter, as we ended the quarter with $475 million in total liquidity even after allocating $45 million of cash to additional de-leveraging and share repurchases. Our balance sheet remains strong, with a net loan-to-value ratio of under 29% and ample liquidity to execute our capital allocation strategy. We declared an incremental dividend of $1.00 per share reflecting our strong cash flows during the third quarter. At this point in the cycle, Seaways is well-positioned to continue prioritizing cash returns to shareholders with our significant operating leverage and cash flow generation.”

THIRD QUARTER 2022 RESULTS

Net income for the third quarter of 2022 was $113.4 million, or $2.28 per diluted share, compared to a net loss of $67.4 million, or $1.44 per diluted share, for the third quarter of 2021. The increase in the third quarter of 2022 was principally driven by a $161.6 million increase in revenues amid strengthening market conditions, arising from historically low inventories and regional imbalances brought on by global energy security concerns, and $47.1 million in merger and integration related costs incurred in the third quarter of 2021 related to the Company’s merger with Diamond S. Such items were partially offset by a $9.1 million in gain on the disposal of vessels recorded in the prior year’s quarter.

Consolidated TCE revenues(C) for the third quarter were $234.5 million, compared to $73.0 million for the third quarter of 2021. Shipping revenues for the third quarter were $236.8 million, compared to $84.8 million for the third quarter of 2021.

Adjusted EBITDA(A) for the third quarter was $157.1 million, compared to $8.0 million for the third quarter of 2021.

Crude Tankers

TCE revenues for the Crude Tankers segment were $75.2 million for the third quarter, compared to $34.8 million for the third quarter of 2021. This increase was primarily attributable to an increase in spot rates as the average spot earnings of the VLCC, Suezmax and Aframax sectors were approximately $24,400, $34,200 and $38,300 per day, respectively, compared with approximately $10,700, $10,700 and $9,800 per day, respectively, during the third quarter of 2021. Shipping revenues for the Crude Tankers segment were $77.1 million for the third quarter of 2022, compared to $41.8 million for the third quarter of 2021.

Product Carriers

TCE revenues for the Product Carriers segment were $159.4 million for the third quarter, compared to $38.2 million for the third quarter of 2021. This significant increase is attributable substantially higher spot rates with average spot earnings for the LR1 and MR sectors of approximately $41,000 and $36,000 per day, respectively, in the third quarter of 2022 compared with approximately $12,500 and $10,000 per day, respectively, in the third quarter of 2021. Additionally, an increase of about 731 spot revenue days as a result of fleet optimization and a reduction in off-hire days contributed to higher revenues. Shipping revenues for the Product Carriers segment were $159.8 million for the third quarter, compared to $43.1 million for the third quarter of 2021.

THIRD QUARTER YEAR-TO-DATE 2022 RESULTS

Net income for the first nine months of 2022 was $169.5 million, or $3.40 per diluted share, compared to a net loss of $99.5 million, or $2.90 per diluted share, for the first nine months of 2021.

Consolidated TCE revenues for the first nine months of 2022 were $518.1 million, compared to $162.9 million for the first nine months of 2021. Shipping revenues for the first nine months of 2022 were $526.5 million, compared to $177.9 million for the first nine months of 2021.

Adjusted EBITDA for the first nine months of 2022 was $294.8 million, compared to $28.5 million for the first nine months of 2021.

Crude Tankers

TCE revenues for the Crude Tankers segment were $171.1 million for the first nine months of 2022, compared to $101.8 million for the first nine months of 2021. Shipping revenues for the Crude Tankers segment were $178.8 million for the first nine months of 2022, compared to $111.8 million for the first nine months of 2021.

Product Carriers

TCE revenues for the Product Carriers segment were $346.9 million for the first nine months of 2022, compared to $61.0 million for the first nine months of 2021. Shipping revenues for the Product Carriers segment were $347.7 million for the first nine months of 2022, compared to $66.1 million for the first nine months of 2021.

REDEMPTION OF 8.5% SENIOR NOTES

On August 5, 2022, the Company redeemed the $25 million aggregate principal outstanding of the 8.5% senior notes due June 2023.

FLEET OPTIMIZATION PROGRAM

During the third quarter, progress payments on the dual-fuel, LNG powered, VLCC newbuilding were approximately $28 million. The remaining cost of the newbuilding project is fully financed under a sale leaseback arrangement and upon delivery in early 2023, the three vessels will commence long-term time charters with an oil major for seven years.

The Company completed the installation of a scrubber on a 2012-built Suezmax during her second special survey and applied advanced hull coatings on the three Suezmax vessels during drydockings in the third quarter of 2022.

In November 2022, the Company entered into a memorandum of agreement for the sale of a 2008-built MR, which is expected to be delivered to the buyers in the fourth quarter of 2022. Net proceeds of the sale are expected to be approximately $14 million after debt repayment and before other fees and expenses.

RETURNING CASH TO SHAREHOLDERS

During the third quarter, the Company paid its regular, quarterly dividend $0.12 per share, or $5.9 million in aggregate. In August 2022, the Company repurchased 687,740 shares of its common stock in open market purchases, at an average price of $29.08 per share, for a total cost of approximately $20.0 million. The Company’s current share repurchase program has approximately $40.0 million remaining and extends through the end of 2023.

The Company’s Board of Directors declared a regular quarterly dividend of $0.12 per share of common stock and a special dividend of $1.00 per share of common stock on November 7, 2022. Both dividends will be paid on December 22, 2022 to shareholders with a record date at the close of business on December 8, 2022.

Source: International Seaways, Inc.