OSG Reports Improved First Quarter 2022 Results

OSG

Overseas Shipholding Group, Inc., a leading provider of energy transportation services for crude oil and petroleum products in the U.S. Flag markets, reported results for the first quarter 2022.

  • Shipping revenues for the first quarter 2022 were $104.0 million, an increase of $8.5 million from the fourth quarter 2021. Compared to the first quarter 2021, shipping revenues increased 28.0% from $81.3 million.
  • Net loss for the first quarter 2022 was $509 thousand, or $(0.01) per diluted share, compared with net loss of $3.7 million, or ($0.03) per diluted share, in the fourth quarter 2021. Net loss was $15.9 million, or $(0.18) per diluted share, for the first quarter 2021.
  • Time charter equivalent (TCE) revenues(A), a non-GAAP measure, for the first quarter 2022 were $93.9 million, an increase of $13.9 million from fourth quarter 2021. TCE revenues were up 43.4% compared to first quarter 2021.
  • First quarter 2022 Adjusted EBITDA(B), a non-GAAP measure, was $25.4 million, an increase of $8.8 million from the fourth quarter 2021. Adjusted EBITDA increased 309.2% from $6.2 million in the first quarter 2021.
  • Total cash(C) was $76.9 million as of March 31, 2022.

During the quarter, we returned two vessels to service from layup. We expect the two remaining vessels in layup to return to service during the second quarter of 2022.

Sam Norton, President and CEO, offered the following comments on the quarterly results: “Operating activities during the quarter generated positive free cash flow after debt service and capital expenditures, with the quarter-to-quarter change in cash balances attributable to changes in working capital. For the fourth consecutive quarter, OSG has achieved better sequential TCE and EBITDA performance, evidence of continuing progress made towards restoring our business to a normalized and financially sustainable state. These results give us renewed confidence that the condition of our balance sheet and the opportunities inherent in an improving market environment will allow us to realize the latent potential of our long-term business strategy.”

Mr. Norton added, “Our last two vessels in layup are slated to return to service before the end of June giving us a full fleet of vessels in service for the first time in nearly two years. We continue to anticipate further improvement in all important financial metrics and a gradual build in available cash balances over the next several quarters as higher utilization at stronger time charter rates is realized by substantially all of our vessels in operation.”

First Quarter 2022 Results

Shipping revenues were $104.0 million for the first quarter of 2022, an increase of $8.5 million, or 8.9%, from the fourth quarter of 2021. TCE revenues increased $13.9 million, or 17.4%, from the fourth quarter to $93.9 million in the first quarter. The increases were primarily a result of (a) a 175-day decrease in layup days, as two vessels came out of layup in January 2022 and February 2022, respectively, (b) a 30-day decrease in scheduled drydocking and (c) five Military Sealift Command voyages, which were longer international voyages, during the first quarter of 2022 compared to one such voyage during the fourth quarter of 2021.

First quarter 2022 operating income was $7.7 million compared to the fourth quarter 2021 operating loss of $1.9 million.

Quarterly adjusted EBITDA increased to $25.4 million during the first quarter of 2022, an $8.8 million increase from the fourth quarter of 2021. The increase was driven by the increased revenues for the quarter.

In comparison to the first quarter of 2021, shipping revenues were up 28.0%. TCE revenues for the first quarter of 2022 were $93.9 million, an increase of $28.4 million, or 43.4%, compared with the first quarter of 2021. The increase primarily resulted from a 369-day decrease in layup days, as we had fewer vessels in layup during the first quarter of 2022 compared to the first quarter of 2021. During the first quarter of 2022, we had two vessels in layup for the full quarter and two additional vessels that came out of layup in January 2022 and late February 2022. During the first quarter of 2021, we had seven vessels in layup. Additionally, the increase in revenues resulted from five Military Sealift Command voyages, which were longer international voyages, during the first quarter of 2022 compared to no such voyages during the same period in 2021 and an increase in Delaware Bay lightering volumes. The increase was partially offset by one less MR tanker in our fleet, Overseas Gulf Coast, which was sold during the second quarter of 2021. We continued to see an increase in demand during the first quarter of 2022 and as a result, we expect our two remaining vessels in layup to return to service during the second quarter of 2022.

Operating income for the first quarter of 2022 was $7.7 million compared to operating loss of $15.8 million for the first quarter of 2021. Net loss for the first quarter of 2022 was $509 thousand, or $(0.01) per diluted share, compared with net loss of $15.9 million, or $(0.18) per diluted share, for the first quarter 2021.

Adjusted EBITDA was $25.4 million for the 2022 first quarter, an increase of $19.2 million compared with the first quarter of 2021, driven primarily by the increase in TCE revenues.

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