INSW - Earnings call transcript Q3 2019 | International Seaways, Inc.

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Operator

Good morning, and welcome to the International Seaways Inc.

Third Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions.

[Operator Instructions] Please note this event is being recorded.

to conference like Small, to now Counsel. General would turn over the James I ahead. go Please

James Small

Good you. earnings the XXXX. call Seaways and release for of quarter Thank third everyone conference morning, welcome to International

would we call the today like Before us I to off everyone with by following. the start of on advising begin,

changing product the for oil forward-looking crude During it regarding quarter and may company's statements operates. make of XXXX revenues petroleum the drydock objectives; the markets; rates following outlook TCE or or the statements other and of carrier world. oil periods; estimated limitation to of for topics: of economic regional financing world the anticipated call, sales trading and and other this financing around patterns; and forecast for may including the vessels bookings company vessel periods; projected regulatory activity capital political XXXX other achieve expenses its and in developments estimated investments; expenses; and company's tanker and off-hire Those alternatives; and and the strategy; address products; and demand regarding or management of charter purchases and of industry strategic which the other without expenditures G&A production fourth the transactions; hire other and fourth other of ability economic, consideration and quarter company's expectations days; scheduled in the

in developments experience factors a current perception take circumstances. management trends, into and of of forward-looking statements assumptions future management's to are by appropriate that expected based Any various and and other conditions, consider believes number such the made management factors including account on historical

for implied company's we cause filings XX-K may and results to the of report Form on beyond in or in to from other subject uncertainties Annual future or expressed on of statements. which U.S. differ risks third described cause those made its those those XXXX, differ and risks, Seaways' include that XX-Q actual could and that are its control, many Factors, International for materially have are assumptions Report from with could Form Securities actual in Exchange to statements Commission. by expectations Forward-looking quarter and make the uncertainties the quarterly which results XXXX the

out that way, to of turn Lois Zabrocky. call Executive like Ms. President the to the and With our would I Officer, Lois? over Chief

Lois Zabrocky

Thank our Good you discuss results. morning, for Thank Seaway's XXXX third James. much, everyone. you joining earnings call quarter very to

slide review highlights third to turn accomplishments. you'll we our X, quarter If our recent and

its as and shareholders our ownership in monetize to an cap our end upon we ongoing This prospects accomplishment quarter have to subsequent announcement. October, the for interest in In initiatives by day our relationship with strengthens and that venture cash. successful important implemented the of in shareholder to unlocked for the end -- value market our is and on $XXX approximately drew evidenced multiple During we commercial significant the million optimize LNG value. $XXX joint Nakilat we our million increase the

advance and a public sale opportunistic to of company. has accretive since us this strengthen sheet disciplined strategy balance allocation our stand-alone been a which approach, addition, our In becoming enabled part and our capital key

the expand position we pool enhances International Tankers footprint leading which Tankers International's helped September in further as worldwide. Second, VLCC

relationships Western the increasing office we expanding here our pleased in with member in U.S. are customers Hemisphere As and us positioning more Seaways fully nearly headquarters to TI's years of a exports. host ago, capitalize founding XX to TI on new

XXXX balance had year-to-date we've success liquidity sheet and in notable the strengthens Next, position. our our

shifted earnings cycle the strategy deleveraging. we Following our beginning capital have power significantly our strengthening investment the $XXX of with at bottom ships the million focus modern allocation and in our big of

improving our net business. as annual a an Consistent XX% position XX. of million loan-to-value and our well million compared solidifies one leverage to tanker $XXX to interest with as in June of prepaid pro This XX% with creating the of forma debt company we $X of this, profiles lowest below savings the

$XXX had we cash. in XX, September million of As

Our will discuss Jeff and to on allocation lower total including $XX at $XXX call. capital priorities our of million million our ongoing stood balance undrawn liquidity optimize capital cost our our revolver. sheet this current and our strategy later

final the to Moving bullet.

the impacted point quarter, third of reached during rates inflection While the the we seasonal from weakness third IMO its regulations. as XXXX the tanker low throughout realized market majority initial the benefits quarter sulfur the

tanker into update prospects more quarter than capitalize also our the fourth. at on and Together our rates earnings quarter we geopolitical to-date higher are significant factors, higher We spot quarter. to the product end strong in and call. Jeff leverage macro of crude third into continue broader on exposure, operating led third expect bookings later the note fourth will With this a crude tanker the detailed with quarter that XXXX. to and favorable fourth to significantly the provide significantly based

in want I day in tanker $XX our to $X.XX highlight $X,XXX per rising potential million market. and in EBITDA earnings a in Finally to our increase share. this Every increase corresponds rates upside per

the turning of market. this highlighting X slide current to tanker drivers Now and

into we based we number of As fundamentals through progress and remain to the quarter, expect on the rate fourth continue factors. favorable XXXX environment strong a

first market. side, increase second demand of per day in X.X oil half supports is This the demand the over XXXX to a the million half. projected growth On barrels robust

with see to which In positive continue and ongoing begun to product refinery an tanker complete, throughput on we the have addition, we impact expect crude markets. now increases have and maintenance

in related to an as we IMO more XXXX pronounced While initial demand started XXXX demand positive year's get incremental end. closer to impact we become to see expect from surge October, we the IMO

produce expectation trading more very due distillates volumes to of continue middle changes transportation our low petroleum refiners to overall seaborne will in remain fuel and the and that oil sulfur Specifically patterns. crude increasing products

also and market. of Supply favorable remained fundamentals supportive strengthening a

over level time, out-of-service XX when years the of IMO from lowest vessel effect. of order a XXXX regulations time ahead tanker as scrubber book installations increased reduced in been its During supply going into is the has a result overall at

in grades crude of and to have lead fuel VLCCs reducing We global various to supply. seen oil Singapore up vessel the XX further store fleet

Moving October. market record to can the reacted the of with geopolitical briefly recent reaching in triggers the levels bottom at rates to two page, we the see chart VLCC how

a a boosted Specifically, on September of rise companies was number the of in tanker September XX. rates sanctions oil sharp the precipitated Saudi subsidiary and on by further facilities announcement tanker on a processing Chinese including COSCO on was attack XX with

an to events higher top rates can supply In strong that market, I strong geopolitical tightly demand creating already drivers balanced market. addition earlier drive upside on the of a and in described additional

XXXX our on update initiatives. compliance an Briefly

Wenchong Engineering of For to procurement all And well of our program, sites been our Clean equipment place Hyundai scheduled nearly in delivered and Marine, partners in VLCCs' advance teams PaxOcean scrubber us project has complete. Global arrival shipyard date. our prefabrication our working site so oversee XX of are to and the are our ably. Services, to with structures. new the grateful two for We're

equivalent on subsequently scrubber quarter. quarter is arrive In Both October, end to at of ships schedule two ship were strong fixed the in to conditions pushed from the shipyard the with back charter the fourth rates. of we as installations first first high The time market these at this month.

fuel, will January ships prepare for working burn X. our been have sulfur XX to very low more that For we months than

tank the and are our to each low-sulfur of bunkering seeking supplies fuels are program opportunities to going Our strategically cleaning pool status is each ship, largely in both the with high bunker now plans manage phase. working the carefully This tank in our complete we and of and partners on ship potential monitor place logistics to year and the implementation includes buying forward. end

Our shoreside have vessels the and a board great teams on our job. crews done

provide details turn on the Jeff. He over will now will third results. additional call I to the quarter

Jeff Pribor

good morning, and Lois Thanks, everyone.

third quickly to directly more But let quarter diluted a the to summarize results. a the move share X, reviewing that compared of per becoming $XX.X $X.XX $XX.X achieved ever company. diluted quarter We or Let's results third highest million in the of million adjusted loss our Net at or third consolidated for million was turning since $XX.X the detail. had quarter Slide per before $X.XX share public EBITDA we've with me net XXXX. in loss

blended third the the our X. increasing Tanker year. of business This TCEs $XX Tankers beginning the last first VLCC, rates increase our million the of segments capacity with primarily average Crude success in resulted reflects specifics quarter into Slide that profile segment age impact segment. of the were results compared Suezmax Aframax sectors. in I'll Crude to higher million the $XX improving getting Now discuss for of and fleet the from the the quarter the and on for the

year. last fleets impact spot quarter rising average Turning quarter million This $XX,XXX, and were to from $XX rates day $XX,XXX revenues the resulted in the primarily compared LRX blended million with LRX, the the of approximately Product $XX earned third MR and $XX,XXX to of segment. per Carrier for by respectively. increase higher daily rates to the TCEs

even in six occurred all down This four to older overall increase though programs we in MRs MR completing doing so were older as revenue revenue sold sell days our MRs.

in fleet compared million reflected the to top million Overall, daily the the third consolidated was across last chart carrier third of in primarily XXXX to this by and increase earned for the were $XX driven quarter the quarter quarter year. average Again as compared product XXXX. crude rates third $XX higher left, revenues TCE in

the top right of year. million page, by was same for for compared last increase primarily adjusted period on Looking $XX daily driven rates. the to the at chart the the million $X the EBITDA quarter higher Again

basis Consolidated quarter quarter TCE from page the the sequential adjusted of up half increasing $X by both look the on bottom the for quarter-to-quarter. at second revenues i.e. were million. a results On and we third EBITDA

review X. [Technical and in for broken then a earnings We to over and is fleet our Spot provide turning which are that modern Now out VLCCs part rates of QX the VLCCs update. Slide Difficulty]. QX

earning [Technical at points spot rates the for I modern Difficulty] cycle calls As lower VLCCs tanker regarding Difficulty]. particularly high [Technical in VLCCs, previous

more both As those the the overall recent VLCC of will during the modern the closely gap and significantly of market from narrow strengthening. rates reflect VLCCs evidence this see and we market group this recovers

about for thus Now on QX far, the higher just turning third to spoke to market quarter based are which earlier. significantly relative that stronger fundamentals Lois bookings the

$XX,XXX $XX,XXX spot a average Panamax available number a our are of per available is for days TI this for day segment or We day. of an the VLCC those with at averaged days note average at by spot basis at spot impressive QX rates were Aframax that would LRX that our Suezmax per day. adjusted of available day. -- LRX VLCCs, XX% of XX reported partners. older XX% $XXXXX approximately pool consistent average an spot pool booked available a on of an of points with of and $XX,XXX days XX% modern our years $XX,XXX days at a XX% And day. of per very days XX%

days would side MR in $XX,XXX. booked approximately of average fourth here the of that been out quarter the point recent we spot bookings at more range. XX% On have $XX,XXX But an I the

up. expect that we'd number So to go

for rate cash XX JV, months XXXX. to all ended principal breakeven to if The operating note, interest the X. the consideration could as set this taking months turn rates owned which expense are the into cost Seaways' breakeven our the costs on distributions rates XXXX G&A well International cover earn Slide FSO Of rate debt TCE was September September all-in costs, we $XX,XXX means, XX, daily as schedule $XX,XXX. illustrated overall Now These vessels must overall XX, drydocking, company service are to breakevens expense. XX drops from and the amortization for our ended within slide. the for

for I'd the time guidance purposes. modeling like reaffirm and year also to this update At for cost

provided. expect related be we daily all costs levels insurance similar previously fees the expenses regular management for various other classes at which First, and OpEx, our running includes and to

So no change there.

CapEx costs appendix Continuing can refer by and Slide quarter, with you XX cost For days an drydock, to for in your modeling. for the details off-hire on update. projected please guidance

about to on debt. amortization $X $X.X million repayment finance quarter of our QX and be lower which of interest than This non-cash million, the recent includes cost is reflecting deferred million. expense costs We expect $XX.X fourth

debt the million quarter. fourth $XX.X our Additionally, scheduled costs in principal were repayments in

million $X.X so G&A fourth quarter. million for be including non-cash million for in charges For quarter cash expect $X.X the G&A approximately the we it to $X.X in all-in,

investment September interest into in share venture about equity expect earnings of the of losses with cash JV interest company's the and XX the a the sale income the joint by of our the of reflected of already million the $X.X $X.X other non-cash in We held unrealized reclass on million, of associated $XX approximately that gain comprehensive is rate value impact LNG representing the from before carrying the loss. LNG swaps also a million accumulated

and the about fourth for Finally quarter. amortization depreciation million $XX we expect in

Now if go XX our to Slide for we cash bridge. could

We the includes and right. income during JVs $X quarter to left But This amount quarter non-cash. third we from began the the million $XXX of which $XX Moving generated is million EBITDA. from cash with million. equity in total of liquidity adjusted

So to therefore a we it cash deducted figure. reach

cash back were distributions $X million from JVs, from FSO the adds the that which So the JV.

$X from proceeds The million. sales vessel were

In addition XXXX drydocking we The was and term $XX which expected totaled principal our interest $X down of prepayment $XX and cash loan million. million pay on another CapEx. million, debt excluding

$XX quarter under $XXX we flow our that The net million liquidity of $XXX total million. with cash ended result the yielding various cash was revolver approximately and million of

about balance XX. like to turn please sheet. to talk our next could you if Slide Now I'd

in million earlier on quarter based we Term our of X%. further $X.X prepayments rates third current million compared rate of reduction which fourth in interest as of to a July million XXXX specifically as quarter. decrease facility prepayment a the expense quarterly on interest a future discussed in in $XX basis in payments, Loan a per result XXXX an and well interest excess of amortization on annual has in $X $X.X and a in $X.X the current million cash These As from million million, quarter, October prepayment to $XXX B made will

balance to lower believe Having cost sheet. our optimize interest the future. completed we capital opportunity of and an prepayments in And our still our significantly further these lowered expense, there's

to As strategy, further and capital positioned our Lois well market. we allocation implement mentioned, accretive a strengthening remain disciplined in

of the of $X.X specifics, million million. balance billion to had of In prepayment terms $XXX of before compared October sheet is September as we of debt, which assets long-term XXth, $XXX again

of as XXth have credit mentioned, million XXXX. that September remains we facility as addition, $XX In revolving the undrawn

our the can at XX%. our and at $XXX you million As under, stands stood on prepayment, see by pro LNG while forma for XX% debt loan-to-value column, right-hand the sales debt-to-capital total net

the amount which prepayment, On the later. in face outline forma XXXX million debt to of effect all the bottom of our of we slide, importantly or pro giving matures facilities, $XXX

earned fleet illustrate again we the our a INSW by to head left, as our earnings vessels, we And Lastly, show, turning in rates the XX, market. recovery. slide strong spot power we which a the view as far tanker market or we or into XXXX trough market

the of in rising a environment XXXX to rate order present to three And the these impact we relative demonstrate levels, right. specific scenarios, to

mid-cycle is, XX-year by average First rates. which we mean,

represented on peak, recent XXXX average XXXX. a the And is, is, rates. openings rate in as experienced Second right by the last of sort

generate again of would adjusted annualized cycle the see And per $X.XX EBITDA. would over rates level we XXXX, EPS. that experienced, of $XXX EBITDA can You of super If $XXX that ever represent on we mid-cycle currently with would of and rates levels average million $XX.XX are generate EPS. we to share base course were million turn $XXX EBITDA million

and upside to market strategy I'd past enhanced has both highlight a in in crude our maintain and leverage. potential continue capitalize where success product growth that we significantly our the fleet modernization to significant our implementing like tankers, operating recovery,

reminder, As in flow spot increase million additional would result vessel cash in per a share, class every per in in rates annum. earnings additional about or $X,XXX $X.XX $XX

comments. closing turn like Lois, now to call to for the back I'd

Lois Zabrocky

much, very on you summary Thank to Jeff. page Please slide XX. turn

as and we for strengthened significant have initiatives shareholders. for we the that third During value and quarter, XXXX, our of unlocked all executed prospects

our balance and we the disciplined strategy, to capital By LNG us $XXX Joint monetizing for of million, for implement sheet, allocation shareholders. accretive further significantly benefit our Venture enabling strengthened our

the the we our bottom of sale on Following, $X annual the and interest grow power, to used debt, to proceeds Venture market earnings of million fleet capitalizing Joint attractive our of saving values, the in have portion LNG asset a $XXX from at success expense. the million prepay

cost continue, of in as to lowering position we further our remain We a optimize sheet, our balance capital. strong

In approach. our implementing hallmark stand-alone And a to becoming approach allocation of committed years addition, to and strategy, disciplined this a since public our three remain further we been company capital has accretive ago.

side, the our Hemisphere, us of International the On commercial headquarters customers, in which International particularly opening important the US Gulf increasing Western office, Seaways brings to given exports. closer in the is Tankers

have the position, our to with strengthened We In we of year-to-date, are in have lowest continue leverage the financial XXXX, in pleased quarter further one the industry. and the to $XXX million profiles ended liquidity.

pro the compared environment is XX%, forma to net to the value recent following And XX% undergoing improved tanker below our upturn. prepayments, repayments -- fourth we through June at XX. a to market significant debt the Progressing quarter, loan

fourth to strong more quarter the the level and being supply market with X, into robust since XXXX into closer IMO becoming order vessel the pronounced, continue get lowest this decreasing and oil book to continued the we XXXX growth, at expect as XXXX, the of We XXXX, impact demand January deadline.

U.S. continue industry. IMO we to expect addition changer tanker XXXX, the increase In that Gulf will be game to for a exports, in

International is position the Importantly, to is in favorable strong strong -- tanker on capitalize conditions. a a And Seaways prospects. market,

sizable $X,XXX Based in and bottom-line substantial, operating annual increase rates, in exposure, EBITDA earnings $XX with our leverage is our every per on our corresponding share. million $X.XX spot in to to our

up open call questions. we the to Before,

Jeff Pribor

just just page printed again. Jeff may -- to Go this so to it Yeah, is a booked to the in X. $XX,XXX clear. turn the VLCC be is is rates back have I The page would to correct. quarter I misspoken modern fourth like about QX day,

Lois Zabrocky

call we And Jeff. very for you the Thank open up now much, questions, Operator?

Session Question-and-Answer

Operator

Instructions] from session. question first with comes ahead. go Please begin the [Operator We The will Randy Jefferies. Giveans now question-and-answer

Randy Giveans

you, all? how Lois, David, Jeff, are you How are

Lois Zabrocky

you? Good. How are

Jeff Pribor

Randy, Good excellent.

Randy Giveans

your VLCCs to of current kind starting honing but your was fixture rates, fixture of me, most in Suezmaxes recent peers, well kind your these. from slightly questions you're quarter So levels? peers, below on a with quick above What few day

above rest booked I'm these quarter? going a rest assuming, to trying quarter-to-date are to the a $XX,XXX of or also then many how in rate of for fourth for the get the the of just day the off-hire And quarter? the run quarter be

Lois Zabrocky

the your part take there. first of I'll Randy. question

as presently. So per see on being they those around spot app the day, every could you fixed rates are fixtures market day prevailing the $XX,XXX somewhere TI the where published

we there. peers. The International. don't that we second posted with on par our fixed strong our in believe we question, results below part of partners Tankers pool are we And think we are your And

And then, your days in there at the around when for our in were we're off-hire quarter, to the is days the appendix, VLCCs. looking third fourth part that days And scrubber installations. of the at question, for QX projected out-of-service XXX our

Randy Giveans

I'm five vessels Yeah. days? XX that, vessels trying sensitize days, XX to three

Lois Zabrocky

And, That which offline going a, her dry-dock schedule have okay. those includes be And mean, and five undergoing the is, into what might data we far And as I is is we canopy can in period. I for yard QX QX. Randy slide is, that for as just that scrubbers you, vessels do in five better. routinely are -- think

Jeff Pribor

you of But QX. bit one the vessels, may it's, a it's what which five provide said little into completion basically

kind XX is five gets XX QX. you times So or of it's XXX plus to the in

So, there. you're right

Randy Giveans

fair. Okay, yeah, obviously, divestiture, that's the your the $XXX venture for above our estimates. LNG at was joint And looking then, million

paying kind use a of of positive regard. high surprise So that was Good loan that down. that cash, price term the in obviously

some tankers really could obviously, still core that to venture, kind about, business FSO further joint your you What of older not kind with divest. of divestitures

possibility repurchases? would that, of cash? the kind with be of share of also the incremental Or So loan around the term but possible that you around those kind strategy use would do not what Or it proceeds, repayments? only further that,

Lois Zabrocky

part part. second Jeff. I'll take first to Again, Randy, throw the the And

Randy Giveans

Okay.

Lois Zabrocky

and million FSO, gotten are the from XXXX. between will Notably, in basically joint differences to LNG. have there that So the we $XX through venture on Seaways about FSO International some the

We XX% expect to our interest around $XX from XXXX. receive in million cash

XXXX which We and are ideal field they on the into operating. that through for they two FSOs on are years five-year goes charter are the those

on secure of expect monetize look we'll second and the your and the our to additional charter really second when And move on we the charterer that capital part vessel progress we as then engage able is everyone and we question our that with to forward FSO. on allocation. part updated in as to So our keep of are it conversations customer regarding around

Jeff Pribor

what's did the what do the by I would because many think happen we road. Randy, through early with playbook this to was Yeah. playbook advance see worth I those it. don't this, speculate happen we're having have of you But fleet $XXX in it's cash, things the I place this mean, shown with pants, worth for at too right? LNG. to we FSO of experiencing today. vessels -- The could million $XXX found our that down what right extra look renewal done upturn When And deploy note to are significantly we you now. And million would the

cash capital but We find in one have be as most priorities for will the shareholders we then deleveraging first done, to another. returning allocation likely or form

really that's next the So step.

Randy Giveans

That's Okay. for for so now. Thanks over turn I’ll Well, the much fair. time. it

Lois Zabrocky

you, Thank Randy.

Operator

The is Lewis ahead. Please Greg next BTIG. from question go with

Greg Lewis

year good morning. mean bit about of bottlenecking and production I just couple little the hearing potentially that really around Yes. that wanted look this ahead talk about? increasing we of the as next thinking that of infrastructure comments how -- next U.S. about out keep business, your what logistics, potential could and Gulf out over lightering to a of terms the the and should we in ahead Thank we of or you be Lois, impacting build-out years

Lois Zabrocky

you, Greg. Thank

two X.X well a question into the the stunning, the on million last pieces month. exports of were day So maybe barrels per rolling that divide U.S. say, over I'll think and Gulf a as I

we they week exports last million a continue those were oddly day, to to barrels Now X.X but increase. expect

expect of of up which seeing Japan what we on Aframaxes being are XXX,XXX really are per cargoes is, and Europe. our fleet middle XXX,XXX those only least day the not of but between Korea to also to the barrels XXXX, we're midsized -- at Far And on Eastern benefit to exports. of Suezmaxes, VLCCs, that and to exported benefiting and vessels that half first locations them -- next the within And there go the

we predominantly when in Gulf, and cover at And the West lightering it It do U.S. operations. Coast, U.S. on lightering, is also we look Bahamas. we have but Panama

So are well the continue In expected around lightering as a seeing reversed lightering the XXXX. until to we interim, VLCCs do in are just the be as not deepening with to from heavy coming the of Corpus Saudi. really of channels fully realized you the in load

Greg Lewis

Great. ago one Okay. for one the obviously, big vessel headline in then months were month, just me, Chinese September. two And more news sanctions, a

we has these about what Like I'm Just give some as of helpful. still you -- think impact that's U.S. understand, be vessels I those those by color been vessels vessels having are that on discriminated to the have would of Are any market being guess, against? can the around trading? sanctioned trying kind

Lois Zabrocky

fully the does reduced place The The was on ships closely. with now is just in marketplace in it to tanker a sanctioned as still transparent as the is not of fixing. sanctions tightly picture a plus these But long the sign COSCO supply over the they're spikes for Absolutely. and industry very we rates. how a these not in are lead really tanker the market is are are charterers as fundamentals. careful way And everything COSCO or it that balanced entities, what is watching is

murkier just to an just owners. going highlighted the part additional it forward. vessels see market that loaded that also increasingly that and think have on even you're makes into brought marketplace, that which of is, in the second been And And clauses that Venezuela is for better the going I have

Greg Lewis

Okay. that. really And a follow-up like just quick to

think are well, they're the doing Or vessels vessels shouldn't U.S. this have I by being anything? there out U.S. I doing But partners. to the and anyway. things and they're right they underutilized? not been these Now there they doing -- sanctioned, just these out were Is just guess way about they're mean, they're

Lois Zabrocky

doubt that this anyone More of that sub-optimized. they're It idle. be would fully sitting in marketplace there's just I the first,

Greg Lewis

for Okay. everybody. Perfect. very time Thank you much the

Jeff Pribor

Greg. Thanks,

Lois Zabrocky

Thanks, Greg.

Operator

next comes Please with The Clarksons Platou go Nokta ahead. Omar question Securities. from

Omar Nokta

you Thank guys. right. All Okay.

TI; bit maybe more Seaways, is thinking Just maybe operational kind my about your a And or in Euronav not. commercial it. question just you're scrubbers. is partnering of investing Obviously,

impact Do the pool Is that thinking effect part up? it you have guys separate? how any working does Just pool? about, on share costs are Is and or the completely this capital fuel set of and any whatnot? earnings

Lois Zabrocky

So operational already will scrubber right pools But plus face, have XX-year the in from a then and other a non-scrubber pool two scrubber and ships. of will the perspective. we sit from Tankers vessels accounting main the these customers have available in an pool where department alongside see and we and International, we and accounting have marketing a then between be no back will And differentiation happens charter. All division for the the non-scrubber a breakout. scrubber pool

Omar Nokta

thrown for is each separately? get And Or Okay. then that does fuel company in? responsible

Lois Zabrocky

Tankers No. performs all the for procurement. International commercial functions fuel vessels including

Omar Nokta

off earnings play bought on a Does Okay. if some just costs pools of bunker play worth And Does that pool? drag does that it's does money? the that create role into interest just the or I due of fuel dead of power that earnings? earnings the having -- know, sitting to how sort not don't that's in so Singapore, how does your that -- ULCC with the

Lois Zabrocky

and be that will at remains Tankers own. by fuels Tankers not, any levels. and International levels provided buy Absolutely balance priced the by International market And sheet used Euronav's their fuels at ULCC are would market

Omar Nokta

a the B talked a here some Okay. bit in maybe you've refinancing Jeff, Loan a Term the that for broader I follow-up in addressed other the I just and you – as questions. of clarity. have it comments and All well about some as and near-term But the right. Thanks know debt.

LNG You've sale. prepaid of proceeds the loan the term with the already

that and growth focused once shareholder do a about growth from not you that are you perspective/more And things Seaways also rewards. now how necessarily has I'm to debt with obviously there. refinancing do As because respect been asking think repayments on

some the selling You've assets. more older of focused been on

You've talked JVs. about selling the

stands how the looking big today As going off the you company based think and Seaways is think ahead do about, where picture? we is capital where be deployed to

Jeff Pribor

it of question. that I'm I expand. bit Omar. little so a Thanks, a there's hit with of Randy's aspects of But to Yeah. happy number

clear the Loan all, among of to I as things our divestiture venture ability say does sheet, of that our other clear refinancing Term joint two balance an you point cash of do at come does been other mean B. That First the in. could least. LNG well things which we and we've has to optimization It think quite rightly the out path

overall than And that XXXX of allocation to capital. make in that doing First cost we equally really importantly, have. give But us would lowers have presently our capital more to flexibility. all, it of flexibility important decisions that's

jump to do CapEx assume I'm shifts going on that. eight said of we focused million of you here? operation do? years two $XX growth, spend ahead what's we all, as As I We on that's from of $XXX the in say, appreciation to million before, that's So in been First right? years plus playbook of have said top What done. did of

we the use fleet. often we bigger. So our high-graded newer It's phrase and

So any we've we already right? feel just don't that done other do box. checked need growth to We've we to say, it

think clear will prune we also to which especially us, there. on our and say meets disciplined leverage couldn't be we acquisitions But returning shareholders. hurdles to thing this to the cash acquisition I likely lens. capital allocation is go the I through in return we've cash continued and emphasis selling our additional be selectively If very like an which and So and that's as hurdles before, into Again, from to was as would non-core market future. with said at is be not a older look but heard include to possibility, this we that assets, up tactically that, deleveraging happy here call, there that a there's – assets the you've on

cash cash to returning NAV, would you where see less not If our a of as repurchase price shareholders any If to is a but event expect depend of share is that's you below share into share price of and well dividend form in shareholders. something is. we that to to repurchase. time. think share as And going that see into not method will course I look looking returning are to we But this

not are it's we've alternatives it's want upturning like capital covers one in are hope I that fortunately now. we ever it's allocation and to something else, thing. just picking to So – These an going that have right we good really got alternatives utilize say all the to also market

Omar Nokta

mean you leverage stand didn't as – value significant. – six overlook basis. sub on a value today we that quite I because the And estimate your Jeff. VLCCs Thanks, Because XX% to guys was is obviously fleet

fleet and So potentially, clearly, there's you you've about older of a those on MRs as lot expansion selling the flexibility. of the scaling Maybe ships. some been down think

is maybe just more is Is invest much more the that focused. to increasingly relative the sort become – of that a by side to plan You've crude product? crude on design? that Is

Lois Zabrocky

tanks, the the not would our crude, up put recovery, come we assets. the investment Suezmaxes first. $XXX definitely felt to and to series those felt the in fundamentals The abandoning lightening MRs the we their ballast million highest has around the six highest as Well, avoided water our return years. upgrades MRs products. of XX put which and products sale on been we advance We of We And work see XXXX coating think and they the we strong. market this the came we're right? earliest we'd the specifically the on do think with up capital along and get on we VLCCs of right return So, will largely that and are where on the them just DCFs

Jeff Pribor

that And first, expected products That played we to up comfortable crude with Yeah. XXXX just but was A you that lot has to people have diversification. first. great. IMO And turned out. again, picked when underscore run look story out of how it are the

day be very having are products crude while to strong. continues Now their

LRX witnessed in Panamax particular in results segment. we As that that by saw

as – others and So well.

having are a with products. really and that fleet crude we both covers comfortable So

Omar Nokta

And Got just you'd in portfolio. you. on you market the take don't as comes were you for OSG of to maybe one that had it. is are looking color. it are thoughts comfortable very just today? Thanks it with fairly you active size Thank grow the large the What advantage just your more, with if look predecessor medium-term? is from that something and a outlook to know I Lois – fleet this when now in-charter you here mind. Or

Lois Zabrocky

you've in the take on actually, where market. exposure products us That's seen

it also on and Panamax two optionality they all three in they on we MRs pool charted have with are LRXs their in those recently vessels. have We of And options in period. in-charters international dirty our on albeit trading

So And we for our that enhance on to look in-charters. value for continue do to look we opportunistically, overall returns.

Omar Nokta

Yeah, Okay. the in There it's release. that's all was vessel another disclosed. today

Thank my good, questions. Lois. Jeff. answering you, for Well, Thanks Okay.

Lois Zabrocky

you. Thank

Jeff Pribor

Thanks, Omar.

Operator

with The Stifel. Instructions] go question Tucker Please next [Operator Long ahead. from comes

Ben Nolan

was sell letting about a He's better LNG wanted the in you got. – those the I've of bit of what follow the Certainly is the not. actually, your Randy to minute. a on got – a saw I price had I was And Tucker. would books. for terms price a think things little was in of a one Ben got FSOs talking But Hey, for the earlier. maybe bit market that sit that actually me you than maybe to on we you out little you sale surprise in that this

the $XXX left Is they a value little with that fair think And very million your unique of you Is Or million? is was worth sort of to there those math much what under it the it those do -- FSOs. view my really what worth? in are any that might you're Is about value a idea $XXX bit assets. they're on way have what by book the be? market for around that

Lois Zabrocky

the of off-hire the on on ultimately the be of could we the between the zero had of idea LNG what course vessel one that achieve potentially basically really and of great are the LNG And the is and I that what charter would differences to is say up XX field FSO they FSO would since had because XXXX. So, the years. life

of you're when far And episodes think the the thinking don't of I mark you're value Ben. the off

range you value Our we is our and roughly in where somewhere mentioned which book right XXth, do as that mind. our million of ascribe -- $XXX around $XXX million. that on in September between is disclose we that But value those

Ben Nolan

Okay, that's allocation with helpful. questions and other some And capital then you and ship -- or well sort about potential down of whatever on paying debt. again growth the of following

you One of guys certainly to possibility that. up the seen new is that and really building unique the hasn't things not We've is come ships. of

something asset has else price higher that consider That the the here new tanker the would building market of appreciate something lately. in with know maybe disparity? values discussed, tankers a I the that bit product of given you or placing don't various sort prices. secondhand paired been for all Is The orders given factors again not little been that have

Lois Zabrocky

been we've disciplined. Well, very

as vessels. not we in have much any selective Seaways company we those independent been new buildings. We've modern buying know ordered proposition you International As found our on and a purchases very value resales better

big there see However, be to in certain a that's And component that we'll cannot say billing something our not closely. do propulsions is at alternative companies look starting to particular, following new future. some in that you be and oil this

Ben Nolan

Well, it down terms have it's Okay. low-hanging paying fruit and All things your the see that of first was of that some in leave been and is of it statement actually. what lastly right. we'll for the on on But the impact one develops. thought can debt that I'll with just And me refinancing. income I that of all, certainly

remind you debt of leverage was -- look is as called or the loan of of a refinanced? and kind look just and lot could And that the sense fact -- that if it any happen? you at at any early as the how much Jeff maybe of me term that now less that than timeframe But is you how back could be that might available some to of

Jeff Pribor

I'm of Ben. it callable Loan to premium in January. publicly sure has as now fill it Tucker. you Yes. glad it Term part for a B call could Yes, known is on is well Yes the and goes

that year-end about think suggestive of really a a $XXX So, would I that's the primary timeframe. the at outstanding of instrument be that is And million. change has sort

that's So, significant.

-- and debt is LIBOR BlackRock the two, sign-assured June year. are X.X% The callable at not baby so-called that's plus note our the right? going next anywhere, and So, in debt long-term bond note

callable So, before they're really not that.

does B vessel So, loan term And I bilateral one have make-whole on the BlackRock time. a that's think Raffles callable component. any the there's the loan primarily a

the in So, it's of obviously are sort ability mix Those do terms in sheet or optimization. are got that balance that. we're the they've are studying ones the to of

Ben Nolan

the And it again, detail. thanks Appreciate the for for be knew for would it. Thanks space. the in Tucker making I --

Jeff Pribor

Thank you.

Jeff Pribor

right. all Okay, Thanks.

Operator

our for remarks. to CEO Lois question-and-answer like conference session. for back This closing the to I concludes over Zabrocky turn would -- the

Lois Zabrocky

to of call. taking Thank you holiday Thank season. much. We the advantage into appreciate International Seaways increased you building much. joining forward really everyone very the look Seaways very And we rates

Operator

The has Thank now today's attending for presentation. conference concluded. you

disconnect. now may You

International Seaways (INSW) 10 Nov 192019 Q3 Earnings call transcript