INSW - Earnings call transcript Q4 2024 | International Seaways, Inc.

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Operator

Hello, and welcome to the International Seaways, Inc. Fourth Quarter 2024 Earnings Conference Call. My name is Carla, and I will be coordinating your call today.

[Operator Instructions]

to begin. over like General James now to Counsel, would hand to you Small, I go when please James, ahead you're ready.

James Small

XXXX. the Thank and you, Quarter for welcome everyone, of Fourth to International operator. Seaways Earnings Good morning, Call

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

its bookings, G&A and and the dock and limitation, charter vessel regulatory forecast in outlooks off-hire During and days, dry expenses; trading production this and world the changes environment, products; regarding accompanying business expenses, changing activity operates, developments estimated of projected company economic the purchases, the to hire and and construction, vessel or dividends, about the oil may the achieve the future patterns, plans the capital globally. company's product issue the which expenditures, which and may consideration tanker the it and of for globe, its financing transactions financing topics: alternatives; management economic ability other and expectations call to its objectives the and with presentation, and relationships conflicts vessel and strategy the address, and of and and prospects; crude around other without industry regional demand company's petroleum for effects of revenues and TCE of company's in political, sales strategic global statements make stakeholders following and rates anticipated newbuild threatened in ongoing markets; forward-looking regulatory including

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

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

let me Now Officer. call Executive Ms. President Chief to turn the Zabrocky, Lois over and our

Lois?

Lois Zabrocky

Thank which in XXXX. year fourth morning, very the full our everyone. joining the you find quarter Seaways the quarter X or million income Good much, James. Relations you Thank On diluted can for section $X.XX $XX Net Investor of was International share. call earnings the and presentation, the of per Slide you of fourth for for website.

adjusted income adjusted share, per a was million. for our net on or Excluding $XX loss and vessel quarter million diluted the $X.XX $XX was sales, fourth EBITDA

to announce of continue vessel are can our quarter we you corner fourth slide. We today right-hand that see with a to swap, the upper proud modernize in the fleet the during as

is less VLCCs We MRs swap specific one of in in for indicative paid full ship, of cash million of risk our to X XXXX. vessel ability eco classes, any fleet efficiency oldest our ship more but class particular sold to across while X ages a built for showcases and opportunistically various preference The reduce compared our enhance a transaction. our limiting $X cash

fourth execute segment, swap tanker quarter The We the which transactions to within us few changes to optimization. plenty some sheet gives created months in of fleet flexibility our of the XXXX. have and balance various optimized earnings across first our the temporary

execution the of difference, During has first facility, to revolving MR repaid $XX final X and this swap. been credit of the cash fourth which deposits we timing Due quarter, temporary the our million the paid million for in borrowed in delivery we $XX on quarter vessel. following the

a of of the $XXX million quarter. capacity As to at still healthy reduced was quite fourth the end our result, line credit a

be expect a basis. around on We to $XXX pro million that forma

million Our liquidity total facility. of the balance of sheet cash composed $XXX million $XXX highlights are of on and strong, $XXX the the million bottom shown of revolving in left credit slide,

have We rates debt net about of loan-to-value day. of million per $XX,XXX $XXX our below and spot with XX% ratio breakeven a are

On paid on XX% we the over time. XXXX. average shared second million $X.XX share to our XXXX, proud price to right, in returned a a the lower dividends shareholders We have dividend are $XXX yield year, in for during over consecutive representing

XXX,XXX regular used in XXXX. our we proceeds March, shareholders XX%, also sharing supplementing $XX XX% been $X.XX during a to our about we've shares into to since we with dividend. payout $X.XX ratio in ratio X announced marking We sale a and in during we similar We last expect believe that million from this future. highest dividends continue cycle, quarters around payout this of the our older representing repurchase Today, for to that pay MR an of of will

arrow, next neutral to on believe approach is demand shareholders. that not represented balanced our We support that dash company our black red renewal good the impact good On the bullets subtle Slide our growth. a with and balance still the competitive future for representing bullets we've to down fleet of opportunistic maintaining topic provide a particular to sheet in up for updated while returns X, allocation drivers we set healthy for meaning the so with standard tanker tanker tankers, can green position the as demand. capital arrows and a

historical for barrels per grow million barrels still bullets world which pull outlier tanker is will particularly at going reading economy about dusts million X in growth on be from term X.X day incremental States. anticipated the to of supportive one demand The is demand many growth period, growth settling for still in is XXXX. been is the United a XXX the its Without headline there individually, spread with these per largely highlights. and for Oil growth will Crude about some exported. Americas, much the million always have has year, demand as is no the I from from demand X% specifically of across grabbers, as of post-XXXX the election Oil XXXX global rate China which of been to near years. is coming large growth production

not are They going situations have and the But geopolitical may with parts, markets moving modify the The market. away. on tanker that effect will adjust. could many an

on shadowing take and Israel-Hamas their position we believe the Russia-Ukraine last expect very even intended. United we horizon, for that most Iran, States wary The with stronger We And Red the Sea. movements similar. a conflict unwinding Russian pun could of tanker if is the in to the safety is resolution moving tense see still longer are to there and that, crudes is the ships a West.

tanker chunks. We markets them include XXX to the has XXX-plus has XXXX barrels can around fleet. refilling This, second a legitimate in mean States over SPR only term, impacted of indicated help control historically half been because SPR may on Trump enforcement of year. historic which time on small priority grew the President United tanker the crude, X, history. The based is case, we embrace any which the will and we In charts in has million their in these the and barrels, in grown believe commercial sanctions medium. This inventories in imports refill short levels. medium about rates Slide million can't would in below OECD that the the and sour

ships But to size that lower factored market that on chart, Slide the X over into added vessels But On hot. water particularly grow weighted many the historical of this chart is in indicator left as in as the in low seen and book the on popped a We of ships as the of time the rate X, corresponding the not the in are of longer chart shown left the order many quite order year. average are expected order over XXXX, the next tanker still age when horizon the in the the context. is time. we've deliver to fleet middle years an orders on the relative times, on these

chart the as years, we towards the The order. the to of on XX% reflects headed right where XX-plus is from compared age exists identify XX% on fleet of that fleet the commercial fleet removed that the

about vessels as be that As X,XXX-plus ships still that see, schedule are strong during already XXX you of tanker supportive are significant continues there are industry that to is XX supply another turning replacement. delivery there tanker the are This can XX the limited tanker need and years earnings. old, will for

cycle should on believe these Seaways into to We a the well conditions. market few over translate continued capitalize positioned and this up remains years, next

balance strong renew to adapt our shareholders. with capital and will We sheet to a conditions approach to execute to balanced while continue our industry fleet returning allocation

will CFO, provide turning Jeff to it over now the review. who financial I'm our Pribor,

Jeff?

Jeffrey Pribor

the income sales a $XX good Thanks, swap Lois, discussed on that morning, for $X.XX includes per result fourth net vessel and Slide Lois quarter earlier. everyone. was timing million loss of On share. the as vessel a This diluted of or X,

this, $X.XX $XX share. Excluding our income per diluted or was net million

On EBITDA earnings provided from the was appendix, $XX reconciliation In the a adjusted the we million. quarter for upper to earnings. reported right adjusted chart, fourth XXXX of

was than While a in our from last within our quarter, our higher expectations largely on guidance revenue fourth market little were expenses conditions based the quarter.

year stores the in at the and Vessel of end one-off the G&A fourth higher and the higher to additional and was repairs expenses primarily were due matters. legal quarter for maintenance. of spares timing

of expenses, with in in an of million revenue XXXX. lightering with EBITDA EBITDA about million contribution G&A, fourth vessel $XX in quarter. lightering charter as $X Combining nearly in nearly to $X business $X and contributed $X million as over prosper business hire quarter in million million in continues $X well this million annual the Our the in the

of in We $XXX undrawn quarter in to on now Slide million X. bridge liquidity million cash began Turning composed revolving million, capacity. with $XXX of the our $XXX total cash,

to $XX benefit working and payables debt dock from about of capital due $XX $XX bridge, chart dry the the revenue, cash fourth accruals. the along in had million million $XX million offset right first less million on adjusted left in expenditures, of for capital quarter, deferred the of to service timing another EBITDA and we Following by or

million the We of spent the fourth quarter. today's cash connection swap share This to the MRs We of credit repaid $XX million We swap. free borrowed that of with our our on million bars of due in $XX to on in flow on capital remaining quarter, for debt bridge for in and first to cash to of payments the of one the $XX delivery share. made the $XX XX% price. the our early shareholders, over we repaid an the we installment in timing equating cash represents LRX million of deposits quarter. dividends temporary achieved of difference, in Due The of per paid million reflect in million the the yield flow $XX therefore and quarter newbuildings about definition XXXX. timing for lines $X.XX fourth the annualized $XX our also allocation vessel

and liquidity cash these in $XXX Altogether, led $XXX with components short-term million revolving in ending investments of capacity. and to million $XXX undrawn million

Slide moving Now XX. to

We left-hand detailed financial side have remained million. page. of balance the strong strong the position on the sheet liquidity a by at and $XXX Cash

$XXX We at below have the And the gross net $X.X are at is year, our debt cost, on about of invested at end the in million a million currently XX%. value with books $X.X vessels of not loan-to-value which million. of

equating average rates, basis points or XXX December fixed at SOFR. weighted was XXX basis rate XX% all-in about above an debt hedged XX Our points to at interest under today's over of or

Following closer hedge be to XX%. our quarter rate to first of we fixed expect our the in amount repayment XXXX,

facilitate create to continue returns the financial to flexibility enhance We necessary to to growth balance shareholders. the sheet and

in have about swap year-end, repayment following of the which the our undrawn $XXX forma We close million million revolvers to rose at of pro debt $XXX transaction.

the portfolio next isn't decade. in the maturity until nearest Our

lower double-digit continue to share we our upside shareholders. costs, We returns in with to breakeven and the

XXXX, breakeven TCE revenue and TCE our slide we pictures different. with TCE last call first with I'll quarter Currently, during our rate. the Slide expected you cover, TCE a on spot our book-to-date about and I'll $XX,XXX blended guidance of cash have remind be day XX% fleet-wide quarter On aligned spot the that our of per for next Starting forward-looking base. actual may earnings average that of XX reflects first

less the the On $XX,XXX rate composed slide, forward per a per day breakeven about revenues. is side day, about charter time day breakeven of per our spot fleet-wide of of $X,XXX right-hand $XX,XXX nearly in

our during on track cash spot record build flow Based spot continue booked and the our like TCE free significant Seaways cash looks breakevens, date to to generate our and to of quarter on shareholders. can it returning

expenses our some bottom for the left-hand for the provide quarter On chart, first guidance XXXX. estimates and in we updated

but off-hire I appendix to won't quarterly you each included line in read use item for plan in expected the to purposes. We modeling our also encourage line, by CapEx. them

remarks. concludes my That

to to So now Lois call her turn for I'd closing Lois? like the back comments.

Lois Zabrocky

XX, so Slide entirety, briefly. you investment highlights, Seaways' encourage read much, On in we will have you you Jeff. summarize Thank and I which provided its to we with

Over cash and of improving the returning track built a the shareholders, growing and record last X years, maintaining balance has International our to healthy sheet company. Seaways

Our shareholder return. annual compounded represents return total around XX%

over For is X to about return million $XXX years. the which second XX% over returned the shareholders, consecutive year, we combined last

and investments old so what that to spot we our renew in average We fleet XX continue as about the sweet tanker our years for see returns. is age

to cast pools. class operating a our net in to keep for aim and We in We've opportunities fortified to wider for sheet any of in scale a classes each growth larger our balance invested down supplement asset range cycle. by

over have our support $XXX in credit capacity million growth. We undrawn to

Our XX net are vessels debt of that is we fleet's the under current unencumbered. have value, XX% and

Lastly, day breakeven create company per XX $XX,XXX value to to that continue owning our we cycle, point to expect collectively put and work months. cash in the for to ships next this the At shareholders. generating will our the for earn we we to spot in

open we'd Thank you And very questions. that much. lines like said, for with operator, to the

Operator

Ben Our Stifel. from first with comes Instructions] [Operator question Nolan

Benjamin Nolan

I appreciate it.

couple. So I've got a

I think maybe the this an And the because some certainly particularly a pretty to crude you the of in is first off pointing tankers. The But taking some maybe locking some at The moment. of capacity sort and charter that your you spot for table is true that's I risk just up elevated generally, where relates the strategy moment. think just is the market. charter given X in think obviously, market if the a of at relative out to to I'm -- about spot inflection built your spot dislocation, little between there and gap curious vessels

Lois Zabrocky

So to question. for I Ben, answer your that question Sorry, wait didn't remaining --

answer we'll that? one. one. -- How me your is and that then second take And yes, then Let

Benjamin Nolan

Okay.

good. Sounds

Lois Zabrocky

charters have time on our present, arriving, our have in water, time XX have right have of I on XX% books X Derek there. that of jump will be We right? then vessels our in the So just that out XX then and we are and we nearly our at now would tonnage newbuildings charter

Derek Solon

like Sure, the the to partners, Lois. always something would Thanks. Further do we're we evaluating. to right It's your question, right we always the continue term and look at right rate. time charters that with

Benjamin Nolan

there's is more move market the the that less to that about makes answer. you at suppose, nothing in the compelled But Okay. or direction, I moment

-- Sorry, Okay ahead. go

the question. you rates that's were first next just we're booked. decent I thus for far there add in it would what far But -- going thus my out any already to you next in your quarter, question, have ask was to to quarter, it, if pretty MR -- more the -- my But the going Well, have guys is you MR to fine.

a curious is Just color, you focus? pretty the maybe there should remainder moment? about this going geographic quarter? at can little are if think just, like Is things specific -- it the a hey, give well how the Is we there of

Derek Solon

Yes, you. we're the with If again. one. far. pleased so I QX Derek can that Thank it's take Ben, bookings

look group. when well think I peer we're we doing at our

kind do we and come we're good Asia We're whereas to the to bit by the come down the seeing starting couple little a of rates, the Gulf Atlantic U.S. to start up dislocation we've think as the But Basin with our of a have carried exposure. good seeing of we're deal over see we little I fleet where of East employment, last quarters. have we're MR well. pool luckily -- -- to an in markets starting size a of been our MR exposure bit see and

So of upside. we should that be capture covered some Eastern to

Operator

Nokta Our Omar Jefferies. next comes with from question

Omar Nokta

update. Good

balance you is you've Debt of ask the over sheet. lot wanted XX%. terms past Clearly, as couple Just now, strengthening to done of few the a in below questions. say, a years,

You of liquidity, been whether have consistent, dividends. returns, buyback renewals capital fleet plenty

and dividend of to XQ And XX% payout going Just kind in the that what is expecting be from say, we this XX% earnings. doing XX% in terms the know think XXXX. at beginning How to about XX% back should forward? XX%, it's forward? of upwards. going That's we it's in general, were ratio moving I you moment, -- going just previously. moving But the of should up the been

XX% up if as in think what kind terms of of can a again? coming the where we do kind kind of what kind 'XX, you normal Any move they question. swinging? you're for color and materially the go earnings in like of payout expect kind that of earnings payout we then and of strengthen to that about to more down closer down? how then payout should on especially of Sorry ratio, And threshold And back rates give looks thinking were

Lois Zabrocky

Excellent because should you been on have we that what that. thunder to highlight to percentage -- to tee And income Omar, forward. shareholders. for know, as his here we adjusted expect returning has have you And Jeff steadily of going have we we increased have net want do up the

Jeffrey Pribor

payout able again, more XX%. to as a XX% And to you quarter, loan to the it's noticed, level ratio value, as were cash we You XX% net recapped gradually last or it so of little Having were which leverage, sufficiently gross, this well. quarter. payout delever. of we XX%-ish last low, move We ratio capital to up from a the free XXXX allocating end flow is raised the until year reached

is like or consistency And -- around per shareholders we part rates shareholders the clearly hear depending of question, second up to the capital The up, will how of of But still think if it's from I we can $X.XX helpful minimum to will or clarity payout often the were message. number this shareholders I payout XX% mean ratio, think income most share. payout most shareholders what and to develops. on works. to think or should XX% return clear I your potential I go I think expect go a and round ratio down And that year that's up the or say from shareholders go hear net have program. moderate

think we of in say of payout position a minimum a I that put that's to it's and to So message. have XX%, ourselves fair ratio a the

Omar Nokta

Okay. And That's certainly that. helpful. just circles as was hearing in second while, hopper. been the innovative, about that's least clear. really maybe that the I been And and VLCC MR we've a appreciate something that for question, in shipping at swap

deemphasizing Just should part the older be, further to deemphasizing really we VLCCs look plan favor And terms Is profile you part been? about here, we that's And in do part what as guess, one. transaction, to then that general, how think it about one as it two, fleet the in transactions tankers? the products? try is Or it think you would sort of of about think your then ratio? of in of what from I increase has

Lois Zabrocky

years. were with latter just come fleet up what capture what very drive want of have opining. around selling and upside. was that pretty broad of of in it And a you're Omar, here. XXX because down sectors, the able horizon I longer our that your to and overall in ships we're right be these we then that are we and going each would you buying were age age -- flawlessly team we from that And the forward. you XXX, creative think Essentially, to fleet really XX And network, bringing pretty a to the deal is of Yes, the yourself the execute --

we be us I shed think of summation. happens an all, crude the when for some do kind it that to would deemphasizing to opportunity you -- not And inefficient then at simply older ships. are

Omar Nokta

part bolster? terms kind -- depend in is Or further, just time? expansion about fleet opportunity the quickly vessels of will fine-tuning of -- And it there adding just it that at is you is of any on to or the the it want or what Okay. set thinking is

Lois Zabrocky

little upon and that And of a is the at you the we've where set certainly for focus over when It look now, depend time. big to So should bit be the opportunity right? to which crude had us attrition as that will will add suits. side, time, a

Operator

next question Deutsche Chris Bank. comes Our Robertson with from

Christopher Robertson

Jeff, this might be a question you. for

broadly up. just breakeven, what speaking, the to makes turning at looking Just that

look forward, there's a As on delevering. bit a further you of maybe deemphasis and here

maybe get floor kind there. there's with as do and breakeven savings other theoretically But that of it, regards you see more where at could look OpEx not components you the So to you to to?

Derek Solon

that's Chris, question. good -- a

and growing on as good us can. on per sure hold too we from I as the on a the does in think done working OpEx. that in be right down G&A, bring it expect that G&A. ourselves time, make up past going basis you'd ship don't that's that -- little a we're we always driving have at as per a were on costs keeping lower we much. to think number. we day then it's line well find And cost We if if working to I always we're

-- off. we're can look little priced think the that of further, -- a there's forward little In bit I interest will without necessarily future terms think deleveraging roll a to have I as that's debt we cost, the that interest, higher just you in of bit debt

think the the amortizing toward next year. opposed look this We end have to ability as more of revolvers and we year as debt to about more out into

incremental. of kind it's So

account we time good incremental more charters. taking when like if find has But that can. breakevens breakeven to I a to about from feel you even good have $XX,XXX I'm our MRs when at about into $XX,XXX think we'll account think before always I to a rate that's now, look under time right that. to down right? feel taking VLCCs into everything not we ways So charters We and lower fleet --

Christopher Robertson

like hear Great. on Okay. to I That's what that. Yes.

historically know this is LRX that have segment speaking. the to outperformed a guys segment. you I Turning

wondering was you you current what I So the segment are? there? do market have competitive a moment, just there kind a for advantage that could talk if still And about particular of dynamics

Lois Zabrocky

I'll and I'll then leave that at Derek. turn Lois, to

you to competition. see can you continue that sector quarter, think continues our we up be Panamax fourth outturn the a I stack strong Derek? when And in the against market competition LRX to the niche,

Derek Solon

still Lois. from a Thanks, China. the to continues A said, strong question a in I Ecuador with good the just said, niche of probably for And raising sort you like rates think deal. of the Ecuador. the start barrels because as Yes, be of down us. market, the it you niche. from little a the Lois to Chris, bit bit you're of the come is to a have also good more of end the of year We're overall But a sending to have do their seeing lot rates little but out decrease year

back answers the shifts. come of expect When sort shifts that more bigger dynamic Chris. pick I even to we to be in up question, that will West hope of that Americas, your that So to the again. Coast market

Operator

next Burke Riley. Our Instructions] from [Operator question Liam B. with comes

Liam Burke

production. effect Lois, terms sanctions, on of the most And takes redistribution there's puts in there has discussion the of of out and lots been of VLCCs.

Suezmaxes? you for are outlook the looking how Specifically, the at

Lois Zabrocky

XX% or XX% place news to by coming piece we Vs. I years the I read the to, with with a that Suezmax you these into ships pretty the had and piece strength list. of would correlation lot day that like correlation something last along XXX political as X XXX systematically every the over components of see the very had tight on the a OPEC of think prior with VLCCs say, has And with So

to components little improve, the see Suezmaxes you're start groundswell more for to Vs come that going along here a see bit and of build get ride. hopefully As and to continue the you those can a

Liam Burke

your of situation, the payout the the cash Jeff, returning a is you Great. opportunistic to method liquidity buybacks primary Are flexibility. ratio on have mix? your -- tremendous of shareholders? amount with Or in

Jeffrey Pribor

simple to the is method right. both. anticipate have the primary cash. and we returning to that is be cute Liam, answer expect not at I ratio you're returning we payout mean the been that continue

third repurchases of we you are year, asked, did mix the share the the However, repurchasing ship We million share in program. a sold share for sense quarter. repurchase the million same that we as $XX amount $XX have in right in roughly after last

again. we to so is at flexibility have say that the do primary I'd focus So dividends, the share the repurchase we ratio, to But look ability have well. on payout plan the as but

Operator

from Our Sherif with BTIG. next question comes Elmaghrabi

Sherif Elmaghrabi

a guess, charter So I on, couple sentiment.

that specification XX over given isn't we newbuild do XX% aren't fleet is vessels see their years of But tanker highlighted You the that the same charters nearly to think relaxing at old. rate, requirements deliveries if older those could going available? much replace you there as modern tonnage

Lois Zabrocky

charters strength efficiency. availability of do depending what flex the their on the tonnage is retain upon the trade their vessels, I you overall are, ability markets of right? see would to the well-maintained what that bit very say margin could from think, I a So and and

to see highly doing high you exception of inefficient certainly and not the few yet there the XX and ships On being right? a that water and there's vessels, under a of really the other a tend those it's on that So those old, older XXX are list the controlled years do rare level that are hand, maintenance. marginalized that by -- OPEC are

incremental I the from think be it to will wholesale. charterers. It's So going never be

Sherif Elmaghrabi

pushing the mover in charters time? Red and to opinion Red resume. I wants this different something transit And appreciate are everyone at has Sea, for a the when be on nobody that Sea on Transit, But then could first is this

Lois Zabrocky

and a just opinion Ops, going Nugent, of our it to I'm Bill little turn there. to an bit over Head to of give happy

William Nugent

bit the is the Lois. you, about I a our the market can whole we don't in policies. looking say, more think, What I of a is stability measures or -- that for and Thank security talk sustained specific The region de-escalation.

to thinking. and So charterers and grateful not any go their pressure or aware for inquiries from I'm through like question, of your support to answer

Operator

And that was question. our final

to over you, back So final Lois, I for remarks. hand will any

Lois Zabrocky

us just the rather market and very would And are you thank much. So and you news to really live interesting an everyone we tanker we joining like in next be the quarter. watching for times frequently, and overall construction to Thank right? to very hope from hear robust. I today, see we

Operator

concludes and everyone, Have for you, for this call. a day. So Thank joining great today's participating.

disconnect. now may You

International Seaways (INSW) 27 Feb 252024 Q4 Earnings call transcript