International Seaways, Inc., one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products, reported results for the third quarter 2023.
HIGHLIGHTS & RECENT DEVELOPMENTS
- Net income for the third quarter was $98 million, or $1.99 per diluted share, compared to net income of $113 million, or $2.28 per diluted share, in the third quarter of 2022.
- Cumulative net income over the last twelve months was $643 million.
- Adjusted EBITDA(A) for the third quarter was $151 million.
- Total liquidity was approximately $581 million as of September 30, 2023, including cash and short-term investments(B) of $214 million and $367 million of undrawn revolver capacity.
- As of November 1, 2023, the Company had $417 million in undrawn revolving credit capacity, approximately $771 million in gross debt outstanding and 30 unencumbered vessels.
Balance Sheet Enhancements:
- Executed a new revolving credit facility agreement (the “$160 Million Revolving Credit Facility”) which resulted in, among other things, the:
- Increase in total revolving capacity of $160 million, of which $50 million was drawn as of September 30, 2023.
- Prepayment of $104 million of the principal outstanding of the $750 Million Credit Facility.
- Reduction of cash break-even costs by nearly $1,000 per day to approximately $14,750 per day through lower debt service costs.
- Net loan to value is lowest in Company history at 19%.
- In October 2023, the Company prepaid an additional $21 million of the $750 Million Credit Facility and repaid the full $50 million drawn on the new $160 Million Revolving Credit Facility.
Returns to Shareholders:
- Paid a combined $1.42 per share in regular and supplemental dividends in September 2023.
- Declared a combined dividend of $1.25 per share composed of a supplemental dividend of $1.13 per share and $0.12 per share of a regular quarterly cash dividend to be paid in December 2023.
- Cumulative cash returns of over $320 million paid over the last twelve months through dividends and share repurchases.
Fleet Optimization Program:
- Sold a 2008-built MR for net proceeds of $13 million after debt repayment in October 2023
- Declared options for two scrubber-fitted, dual-fuel (LNG) ready, LR1 newbuildings for delivery in the first quarter of 2026. In aggregate, the Company has four LR1s on order with a total contract price of $231 million with deliveries beginning in the second half of 2025.
- Increased contracted revenues to $344 million by entering into a new time charter agreement.
“We continued to generate significant cash and earnings from our diversified portfolio of crude and product tankers during the third quarter,” said Lois K. Zabrocky, International Seaways’ President and CEO. “Seaways remains committed to returning cash to shareholders by declaring a combined dividend of $1.25 per share for the fourth quarter. Including this declaration, aggregate dividends during 2023 will be $6.29 per share increasing our cumulative returns to shareholders to over $320 million. Moving forward, we remain dedicated to a balanced capital allocation approach, which enables us to pay substantial dividends, execute opportunistic share buybacks, and reinvest in our fleet to maximize long-term shareholder value.”
Ms. Zabrocky added, “We expect the tanker markets’ attractive supply and demand dynamics to continue to drive strong tanker earnings for the foreseeable future. Supply side growth remains limited due to evolving regulations and limited newbuild capacity in the near term at shipyards while the world fleet continues to age. Positive tanker demand fundamentals are supported by increasing oil demand and higher tanker utilization from the shifting global energy trade, with geopolitical tensions driving further focus on energy security.”
Jeff Pribor, the Company’s CFO stated, “Maintaining a strong and diverse capital structure remains a top priority for Seaways. During the third quarter, we continued to enhance our balance sheet, executing a new revolving credit facility agreement that increased our total revolving capacity, which together with further de-leveraging, reduced our cash breakeven costs nearly $1,000 per day. We are pleased with our success to-date, lowering our breakeven levels to amongst the lowest in the industry at $14,750 per day in a diversified tanker company. This further improves our ability to generate free cash, and, combined with our ample liquidity of $581 million and net loan-to-value ratio of 19%, ensures Seaways is ideally positioned to optimize returns to shareholders.”