International Seaways Reports Third Quarter 2024 Results

NEW YORK–(BUSINESS WIRE)–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 third quarter 2024.

HIGHLIGHTS & RECENT DEVELOPMENTS

Quarterly Results:

  • Net income for the third quarter of 2024 was $92 million, or $1.84 per diluted share.
  • Adjusted net income(1) for the third quarter of 2024 was $78 million, or $1.57 per diluted share.
  • Adjusted EBITDA(1) for the third quarter of 2024 was $130 million.

Robust Balance Sheet:

  • Total liquidity was approximately $694 million as of September 30, 2024, including total cash (1) of $153 million and $541 million undrawn revolving credit capacity.
  • Repaid $50 million on the Company’s $500 million RCF, increasing undrawn revolver capacity.
  • Net loan-to-value remained historically low at approximately 13.5% as of September 30, 2024.

Fleet Optimization Program:

  • Sold a 2008-built MR for net proceeds of approximately $24 million.

Returns to Shareholders:

  • Repurchased 501,646 shares for a total cost of approximately $25 million, representing an average purchase price of $49.81 per share.
  • Paid a combined $1.50 per share in regular and supplemental dividends in September 2024.
  • Declared a combined dividend of $1.20 per share to be paid in December 2024, representing 75% of adjusted net income(1) for the third quarter.

We continue to execute on our balanced capital allocation strategy, utilizing our strong cash generation in third quarter to deliver double-digit returns to our shareholders,” said Lois K. Zabrocky, International Seaways President and CEO. “Including the combined dividend of $1.20 per share declared for the fourth quarter, aggregate dividends in 2024 will total $5.77 per share, or 12% of the average share price. We remain committed to a balanced capital allocation approach, as we continue to look for attractive opportunities to enhance our fleet, while optimizing returns to shareholders.”

Ms. Zabrocky added, “Market fundamentals remain strong for tankers in the near term, supported by global oil demand growth, which is expected to be at or above historical growth rates. Ton-mile demand remains elevated due to geopolitical events that could take significant time to unwind. While newbuilding orders have risen to about 13% of the global tanker fleet, nearly half of the existing fleet is expected to be over 20 years old by the time the newbuildings deliver into the market. We expect that these dynamics will continue to drive strong earnings, positioning Seaways to generate significant free cash flow and continue building on our track record of investing in our fleet and returning substantial cash flow to shareholders.”

Jeff Pribor, the Company’s CFO stated, “We returned nearly $100 million to investors in dividends and share repurchases during the third quarter, representing 84% of the prior quarter’s adjusted net income that was returned to shareholders. With ample cash and liquidity of $694 million, a record low net loan-to-value and low spot cash break evens, we are well-positioned to continue creating value by executing our balanced capital allocation strategy.”

THIRD QUARTER 2024 RESULTS

Net income for the third quarter of 2024 was $92 million, or $1.84 per diluted share, compared to net income of $98 million, or $1.99 per diluted share, for the third quarter of 2023. The decrease was primarily driven by a decrease in TCE revenues(1) and an increase in vessel expenses and depreciation and amortization, reflecting the delivery of six modern MR vessels during the second quarter of 2024, partially offset by gains on the sale of one vessel in the third quarter of 2024.

Shipping revenues for the third quarter were $225 million, compared to $242 million for the third quarter of 2023. Consolidated TCE revenues(1) for the third quarter were $220 million, compared to $236 million for the third quarter of 2023.

Adjusted EBITDA(1) for the third quarter was $130 million, compared to $151 million for the third quarter of 2023.

Crude Tankers

Shipping revenues for the Crude Tankers segment were $103 million for the third quarter of 2024, compared to $114 million for the third quarter of 2023. TCE revenues(1) were $99 million for the third quarter, compared to $111 million for the third 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 $29,700, $38,000 and $25,100 per day, respectively, compared with approximately $41,000, $38,700 and $34,000 per day, respectively, during the third quarter of 2023.

Product Carriers

Shipping revenues for the Product Carriers segment were $122 million for the third quarter of 2024, compared to $127 million for the third quarter of 2023. TCE revenues(1) were $121 million for the third quarter, compared to $125 million for the third quarter of 2023. This decrease is primarily attributable to a decline in LR1 spot earnings to approximately $46,900 per day from $56,300 per day partially offset by an increase in MR spot earnings to $29,000 per day from $26,600 per day.

YEAR-TO-DATE 2024 RESULTS

Net income for the nine months ended September 30, 2024 was $381 million, or $7.66 per diluted share, compared to net income of $424 million, or $8.58 per diluted share, for the first nine months of 2023.

Shipping revenues for the nine months ended September 30, 2024 were $757 million, compared to $821 million for the first nine months of 2023. Consolidated TCE revenues(1) for the first nine months of 2024 were $743 million, compared to $808 million for the first nine months of 2023.

Adjusted EBITDA(1) for the nine months ended September 30, 2024 was $488 million, compared to $565 million for the first nine months of 2023.

Crude Tankers

Shipping revenues for the Crude Tankers segment were $355 million for the first nine months of 2024, compared to $399 million for the first nine months of 2023. TCE revenues(1) for the Crude Tankers segment were $344 million for the first nine months of 2024, compared to $389 million for the first nine months of 2023.

Product Carriers

Shipping revenues for the Product Carriers segment were $402 million for the first nine months of 2024, compared to $422 million for the first nine months of 2023. TCE revenues(1) for the Product Carriers segment were $399 million for the first nine months of 2024 compared to $419 million for the first nine months of 2023.

BALANCE SHEET ENHANCEMENTS

During the third quarter of 2024, the Company repaid $13 million in mandatory payments required under its existing debt facilities and sale leaseback arrangements. For the nine months ended September 30, 2024, the Company repaid $56 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 $95 million and undrawn revolver capacity of $257 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 $13 million, 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. The sustainability-linked features are aimed at reducing the Company’s 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 million and included the collateral vessel in the $500 Million RCF. The $500 Million RCF saves approximately $20 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, which was repaid during the third quarter. Following the repayments and amortizing capacity during the third quarter, aggregate undrawn revolving capacity was $541 million at September 30, 2024.

FLEET OPTIMIZATION PROGRAM

In July 2024, the Company sold a 2008-built MR for net proceeds of approximately $24 million. During 2024, the Company sold three vessels for aggregate net proceeds of $72 million. 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 connection with vessel sales, the Company recorded gains of $41 million in aggregate during 2024.

During the nine months ended September 30, 2024, the Company took delivery of six modern MR vessels for an aggregate consideration of $232 million. In connection with the acquisitions, the Company issued 623,778 common shares to the sellers, representing 15% of the aggregate consideration with the remaining funding provided by cash on hand.

During 2024, the Company entered into three 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. From October 1, 2024 through expiry, total future contracted revenues aggregate to approximately $345 million, excluding any applicable profit share.

The Company has contracts to build 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.

RETURNS TO SHAREHOLDERS

In September 2024, the Company paid 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.

On November 6, 2024, the Company’s Board of Directors declared a combined dividend of $1.20 per share of common stock, composed of a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend of $1.08 per share of common stock. Both dividends will be paid on December 27, 2024, to shareholders with a record date at the close of business on December 13, 2024.

During the third quarter of 2024, the Company repurchased and retired 501,646 shares of its common stock in open market purchases, at an average price of $49.81 for an aggregate cost of approximately $25 million. In November 2024, the Company’s Board of Directors authorized an increase to $50 million for the share repurchase program that 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 third quarter 2024 results at 9:00 a.m. Eastern Time on Thursday, November 7, 2024. To access the call, participants should dial (833) 470-1428 for domestic callers and (929) 526-1599 for international callers and entering 730934. 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 November 14, 2024, by dialing (866) 813-9403 for domestic callers and +44 204 525 0658 for international callers, and entering Access Code 826562.

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 83 vessels, including 13 VLCCs, 13 Suezmaxes, five Aframaxes/LR2s, 14 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

Nine Months Ended

September 30,

September 30,

2024

2023

2024

2023

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Shipping Revenues:

Pool revenues

$

170,007

$

194,465

$

603,970

$

701,634

Time and bareboat charter revenues

36,842

27,587

99,030

66,849

Voyage charter revenues

18,341

19,656

54,000

52,558

Total Shipping Revenues

225,190

241,708

757,000

821,041

Operating Expenses:

Voyage expenses

5,503

5,756

14,537

13,434

Vessel expenses

71,269

64,596

202,490

188,516

Charter hire expenses

7,245

11,297

20,841

30,599

Depreciation and amortization

39,304

33,363

109,974

95,356

General and administrative

13,411

12,314

37,494

35,082

Other operating expenses

985

2,715

Third-party debt modification fees

148

168

568

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

(13,499)

74

(41,402)

(10,648)

Total operating expenses

124,218

127,548

346,817

352,907

Income from vessel operations

100,972

114,160

410,183

468,134

Other income

3,211

646

8,525

8,308

Income before interest expense and income taxes

104,183

114,806

418,708

476,442

Interest expense

(12,496)

(16,817)

(37,808)

(51,678)

Income before income taxes

91,687

97,989

380,900

424,764

Income tax benefit/(provision)

1

(52)

1

(432)

Net income

$

91,688

$

97,937

$

380,901

$

424,332

Weighted Average Number of Common Shares Outstanding:

Basic

49,544,412

48,861,356

49,302,367

49,008,901

Diluted

49,881,317

49,275,022

49,677,238

49,442,825

Per Share Amounts:

Basic net income per share

$

1.85

$

2.00

$

7.72

$

8.65

Diluted net income per share

$

1.84

$

1.99

$

7.66

$

8.58

Consolidated Balance Sheets

($ in thousands)

September 30,

December 31,

2024

2023

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$

103,309

$

126,760

Short-term investments

50,000

60,000

Voyage receivables

191,093

247,165

Other receivables

15,682

14,303

Inventories

378

1,329

Prepaid expenses and other current assets

9,721

10,342

Current portion of derivative asset

2,087

5,081

Total Current Assets

372,270

464,980

Vessels and other property, less accumulated depreciation

2,045,331

1,914,426

Vessels construction in progress

24,401

11,670

Deferred drydock expenditures, net

82,628

70,880

Operating lease right-of-use assets

12,295

20,391

Pool working capital deposits

33,794

31,748

Long-term derivative asset

214

1,153

Other assets

16,913

6,571

Total Assets

$

2,587,846

$

2,521,819

LIABILITIES AND EQUITY

Current Liabilities:

Accounts payable, accrued expenses and other current liabilities

$

45,796

$

57,904

Current portion of operating lease liabilities

7,673

10,223

Current installments of long-term debt

49,823

127,447

Total Current Liabilities

103,292

195,574

Long-term operating lease liabilities

6,773

11,631

Long-term debt

600,689

595,229

Other liabilities

2,462

2,628

Total Liabilities

713,216

805,062

Equity:

Total Equity

1,874,630

1,716,757

Total Liabilities and Equity

$

2,587,846

$

2,521,819

Consolidated Statements of Cash Flows

($ in thousands)

Nine Months Ended September 30,

2024

2023

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities:

Net income

$

380,901

$

424,332

Items included in net income not affecting cash flows:

Depreciation and amortization

109,974

95,356

Amortization of debt discount and other deferred financing costs

3,093

4,491

Deferred financing costs write-off

1,952

Stock compensation

5,736

5,912

Earnings of affiliated companies

(42)

20

Other – net

(519)

(2,140)

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

Gain on disposal of vessels and other assets, net

(41,402)

(10,648)

Loss on extinguishment of debt

1,323

Payments for drydocking

(43,855)

(27,622)

Insurance claims proceeds related to vessel operations

1,004

2,858

Changes in operating assets and liabilities

38,626

67,085

Net cash provided by operating activities

453,516

562,919

Cash Flows from Investing Activities:

Expenditures for vessels, vessel improvements and vessels under construction

(216,589)

(192,218)

Proceeds from disposal of vessels and other assets

71,915

20,036

Expenditures for other property

(880)

(1,035)

Investments in short-term time deposits

(125,000)

(210,000)

Proceeds from maturities of short-term time deposits

135,000

215,000

Pool working capital deposits

(1,532)

(1,334)

Net cash used in investing activities

(137,086)

(169,551)

Cash Flows from Financing Activities:

Borrowing on revolving credit facilities

50,000

50,000

Repayments on revolving credit facilities

(50,000)

Repayments of debt

(39,851)

(323,685)

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

169,717

Payments on sale and leaseback financing and finance lease

(36,831)

(123,732)

Payments of deferred financing costs

(5,759)

(3,006)

Premium and fees on extinguishment of debt

(1,323)

Repurchase of common stock

(25,000)

(13,948)

Cash dividends paid

(225,385)

(247,001)

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

(7,055)

(5,158)

Net cash used in financing activities

(339,881)

(498,136)

Net decrease in cash and cash equivalents

(23,451)

(104,768)

Cash and cash equivalents at beginning of year

126,760

243,744

Cash and cash equivalents at end of period

$

103,309

$

138,976

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 September 30, 2024 and the comparable period of 2023. Revenue days in the quarter ended September 30, 2024 totaled 6,671 compared with 6,663 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 $954 and $874 per day for the three months ended September 30, 2024 and 2023, respectively.

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

Spot

Fixed

Total

Spot

Fixed

Total

Crude Tankers

VLCC

Average TCE Rate

$

29,711

$

31,903

$

40,961

$

35,319

Number of Revenue Days

881

276

1,157

870

297

1,167

Suezmax

Average TCE Rate

$

38,044

$

30,979

$

38,708

$

30,973

Number of Revenue Days

1,014

183

1,197

1,012

184

1,196

Aframax

Average TCE Rate

$

25,119

$

38,574

$

34,046

$

38,652

Number of Revenue Days

186

91

277

232

73

305

Total Crude Tankers Revenue Days

2,081

550

2,631

2,114

554

2,668

Product Carriers

Aframax (LR2)

Average TCE Rate

$

$

39,498

$

32,603

$

Number of Revenue Days

69

69

92

92

Panamax (LR1)

Average TCE Rate

$

46,899

$

$

56,295

$

Number of Revenue Days

594

594

685

685

MR

Average TCE Rate

$

29,006

$

21,920

$

26,563

$

21,200

Number of Revenue Days

2,685

692

3,377

2,836

382

3,218

Total Product Carriers Revenue Days

3,279

761

4,040

3,613

382

3,995

Total Revenue Days

5,360

1,311

6,671

5,727

936

6,663

Revenue days in the above table exclude 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 September 30, 2024, INSW’s fleet totaled 82 vessels, of which 62 were owned, 14 were chartered in and six contracted newbuildings.

Total at September 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

34

4

38

1,901,526

Product Carriers

41

5

46

2,536,915

Total Operating Fleet

62

14

76

8,961,616

Newbuild Fleet

LR1

6

6

441,600

Total Newbuild Fleet

6

6

441,600

Total Operating and Newbuild Fleet

68

14

82

9,403,216

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

Contacts

Investor Relations & Media:
Tom Trovato, International Seaways, Inc.

(212) 578-1602

ttrovato@intlseas.com

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