International Seaways ((INSW)) has held its Q4 earnings call. Read on for the main highlights of the call.
International Seaways’ recent earnings call conveyed a positive sentiment, highlighting robust financial performance, strategic fleet modernization, and substantial shareholder returns. The company also addressed temporary expense challenges, maintaining an optimistic outlook for future growth.
Net Income and Adjusted EBITDA
International Seaways reported a net income of $36 million, or $0.72 per diluted share, for the fourth quarter of 2024. When excluding the loss on vessel sales, the adjusted net income rose to $45 million, or $0.90 per diluted share, with an adjusted EBITDA of $95 million, showcasing the company’s strong financial footing.
Fleet Modernization and Optimization
The company made significant strides in modernizing its fleet by executing a vessel swap. This involved selling two older VLCCs and acquiring three ECO MRs built in 2015. This strategic move not only reduced the average age of the fleet but also enhanced its overall efficiency.
Strong Balance Sheet and Liquidity
International Seaways ended the fourth quarter with a robust liquidity position of $632 million, including $157 million in cash and $475 million available through a revolving credit facility. The net loan-to-value ratio was kept below 16%, reflecting a strong balance sheet.
Shareholder Returns
In 2024, the company returned over $300 million to shareholders, highlighted by a $5.77 dividend, representing a 12% yield. A further dividend of $0.70 has been announced for March 2025, with a payout ratio of approximately 77%, underscoring the company’s commitment to rewarding its investors.
Tanker Market Positioning
International Seaways is strategically positioned to benefit from favorable tanker market conditions. The company reported a spot breakeven rate of about $13,700 per day, while TCE fixtures for the first quarter of 2025 are projected at approximately $26,500 per day fleet-wide.
Higher Expenses
The fourth quarter saw higher-than-expected expenses due to the timing of stores and spares, additional repairs and maintenance, and increased G&A expenses resulting from one-off legal matters. These factors contributed to a temporary rise in operational costs.
Temporary Cash Flow Impact
The fleet modernization efforts led to temporary changes in the balance sheet, necessitating a $70 million borrowing on the revolving credit facility. This amount was subsequently repaid, indicating effective cash flow management.
Forward-Looking Guidance
Looking ahead, International Seaways anticipates sustained strong demand in the tanker market. The company plans to maintain a balanced capital allocation strategy, focusing on fleet renewal and continued shareholder returns, which should support ongoing growth and stability.
In summary, International Seaways’ earnings call reflected a positive outlook, driven by solid financial results, strategic fleet upgrades, and a commitment to shareholder value. Despite temporary expense challenges, the company remains well-positioned to capitalize on market opportunities and deliver continued growth.