Lois Ok. Zabrocky, International Seaways’ President and CEO
New York City headquartered International Seaways, Inc. (NYSE: INSW), one of many world’s largest tanker operators, reported internet revenue for the primary quarter of $33.0 million, in comparison with a internet revenue of $10.9 million within the first quarter of 2019. Net revenue for the quarter displays the affect of a $2.8 million acquire on sale of vessels, a $12.5 million write-off of deferred financing prices, and a $1.0 million loss from the extinguishment of debt. Net revenue excluding this stuff was $43.7 million.
Time constitution equal (TCE) revenues for the primary quarter have been $119.7 million, in comparison with $94.0 million within the first quarter of 2019.
Adjusted EBITDA for the primary quarter was $74.2 million, in comparison with $47.3 million in the identical interval of 2019.
“Our substantial operating leverage and earnings power were evident in our first quarter results, as we posted our highest quarterly EPS as a public company,” stated Lois Ok. Zabrocky, International Seaways’ President and CEO. “The rate environment strengthened in the second quarter with low oil prices, excess oil supply and the increasing demand for floating storage pushing rates higher. With our sizeable fleet and significant exposure to the VLCC market, we have captured this market strength, which will positively impact our earnings. In addition to strong second quarter bookings to date, we capitalized on the robust rate environment by entering into a number of very favorable time charters. Specifically, we locked-in four time charters for periods ranging from seven to 36 months with major oil producing and trading companies at very attractive rates.”
Commenting on the affect of the COVID-19 pandemic, Zabrocky stated the corporate had taken quite a few precautionary steps throughout its workplaces and fleet to guard its shore-based staff and its seafarers and contractors.
“Although we have faced many disruptions, to date our operations have not been materially affected,” she stated.
Jeff Pribor, the Company’s CFO, added, “With the successful completion of our refinancing in January, which reduced annual interest expense significantly and further strengthened our capital structure, we ended the quarter with over $150 million in total liquidity. At a time when our net loan to asset value of our conventional tanker fleet is 42%, which is one of the lowest leverage profiles in the public company shipping sector, our balance sheet strength enabled us to return capital to shareholders, paying a $0.06 dividend and repurchasing $10.0 million of shares during the quarter.”
SCRUBBERS
The firm stories that it has accomplished the scrubber installations on 5 of its fashionable VLCCs. Scrubber installations on two extra VLCCs are scheduled for completion through the second quarter of 2020. However, it says that the the scrubber installations on the ultimate three fashionable VLCCs have been rescheduled to 2021 partly due to COVID-19 impacts and to reap the benefits of present robust market situations and to align with the pure drydocking dates for the vessels.
OUTLOOK
International Seaways says it presently imagine that the second and third quarters of 2020 will possible be a stronger charge surroundings for tankers, as a consequence of extra crude provide and the ensuing want for seaborne storage of crude oil and merchandise, than 2021.
The firm says tanker charges within the second quarter so far have been “highly volatile.” Despite the OPEC+ settlement in early April 2020 to chop manufacturing considerably starting in May/June 2020, the overall oil being produced continues to be considerably larger than international demand. This extra manufacturing continues the necessity for tankers for use as floating storage, and, coupled with elevated delays offloading cargoes as shore-based storage fills up, has supported a strong tanker charge surroundings. This implies important money era within the close to time period. When provide and demand finally come again into steadiness, this might have unfavourable repercussions for tankers because the oil held in stock will supplant oil tanker transportation demand.
In an effort to reap the benefits of the dynamic oil tanker markets and scale back danger, International Seaways says, it has “opportunistically put four of our VLCCs on time charters for periods ranging from seven months to 36 months at current high rates with major oil producing and trading companies.”
