International Seaways (INSW) 7 Nov 242024 Q3 Earnings call transcript

Hello, everyone, and welcome to the International Seaways, Inc.

Third Quarter 2024 Earnings Conference Call. My name is Carla, and I will be coordinating the call today. [Operator Instructions] I will now hand you over to your host, James Small, General Counsel at International Seaways to begin. James, please go ahead.

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

call following: Before it start the the everyone the company off begin, accompanying by of we I forward-looking industry advising with would presentation, management or us statements and the this operates. call During like make to today in the regarding on which in

financing account that factors consider of trends, other current historical are into management based and including perception and other newbuild trading of plans bookings, dry-dock developments, regulatory and without and the and for hire vessels, address, and the capital on vessel, believes may made and of ongoing strategic other the globally. Any of anticipated limitation, ability forecasts of oil alternatives; the and crude in the changes relationship scheduled effects the product charter achieve take globe, consideration expectations various TCE statements by appropriate expenditures; statements topics: conflicts G&A and and such and factors, for projected purchases days; expenses, its conditions, company's assumptions petroleum the transactions company's other and Those company's Outlooks and to vessels the expenses; its of experience world the estimated markets and tanker objectives; including a in activity rates oil number business circumstances. management's regional patterns; and of following and stakeholders, issue financing products; of with and management political, future production strategy economic regarding sales dividends, of to future economic demand construction to company's and forward-looking and threatened developments around off-hire prospects, revenues the and and expected

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

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

much, everyone. $X.XX the presentation Relations joining found you Slide James. you call X on Thank income for $XX was morning, for and XXXX. Starting million third or quarter Thank quarter noting of the Net our Good per website. under for very share. Seaways our on third Investor earnings diluted International be can

for adjusted income the Excluding one-off the quarter sales per or other $XX and gains items, net million vessel third $X.XX was share. on

$XXX as for vessel X second Our EBITDA million during our quarter. of XXX,XXX XX lower and over day. We million. old sold the total the $XXX EBITDA for $XXX shares spot our on million a million at MRs acquired of at the and issued gross we unencumbered debt million slide, referenced with we $XX XX the historically loan until $XXX capacity, and debt our maturity nearly total includes over per was another X $XXX upper for net $XXX XX-year-old vessel by sold XXXX, $XX left partially under vessels, million net in Overall, years MRs is funded million, decade undrawn Referencing at low next $XXX chart, in is value $XX,XXX of balance on optimization with million cash have right-hand our no our section the at with breakeven which under the XX%, revolver fleet net our million proceeds. in to fleet we liquidity, adjusted on sheet under

over returns shares average to proceeds shareholders the retired in net paid XX% On a purchased quarter our XX% Today, we represented using $X.XX quarter. per the a per and vessel income This quarter of the of from from an our right, net quarter, million the $X.XX share. last combined adjusted equating we to $XXX over over income. price at third our dividend share. of combined of announced we dividend of combined prior In third sale, share, adjusted XXX,XXX same lower under $XX per

Over market Seaways XX our returned has XX% months, last average over of the cap.

is future Slide opportunistic our continue X, while the up with demand to company dash next black green to The over bullet enhancing meaning the set with the arrow shareholders. On we've driver the as yield with bullets impact growth double-digit to representing for balanced our above and years. our not renewal and demand highlights. some tanker positioning for still represented We last years believe balance arrow a positive our in XX tanker is capital updated tankers. on demand. Pulling drivers cycle the allocation fleet of rate for sheet, a Oil growth in up next subtle the a over approach, our the dividend is X neutral or red down positive at a sharing

the forecast in oil announced XXXX steam be to demand demand has their which oil for its China yet of beyond. and growth, stimulus, monitoring While impact lost has into factored some we're

hold ultimately politics we disruption. outcomes elections shifting weaker worldwide The output quarter, it January from Libyan production until XXXX. has impact us. to third decided December may OPEC+ the from uncertain OPEC+ and tanker largely will of impact how of During off world to now increasing demand saw remains due

in factored build the short-term, months. flip of week chart, the last ships tankers inventories, are positive readily slight did shows Not the OECD over creep the which a the book fleet the chart for see order page, of demand demand water. On are has calls factor available impact at still time, as for third Still, the left-hand tanker context. the tankers side order in fleet that XXXX. turning years a to another turning in relative to supply the is over with the this with a years next are The delivery draws page, on new reflected chart, Slide up negatively lower the conditions. each strong in U.S. translates as quite on of for market on Inventory Seaways historical the the quarter. the on but that of inventories low positioned during the draws you can this This size bottom to old. shown barrels Finally, to few strength X, above next few old right-hand vessels be end significant in tanker limited that continue the lower as need over of are the tanker years continued of XX orders well the replace that but over ship the deliver replacement. a X,XXX-plus on years life. There X fairly XX the schedule believe this tanker into continues supportive is industry capitalizing earnings. We natural

renewing adapting provide and it going You a can industry to Pribor, count on sheet, keeping strong review. us to returning conditions allocation while to balance to our CFO, Jeff utilize turn the to financial capital our fleet, now our over to approach, balanced shareholders. I'm

gains million X, Thanks, was multi-employer the and good or our U.K. includes a on income quarter provision net share. vessel Slide Lois, This the pension morning, for funds. $X.XX sales settlement minor $XX for and per diluted everyone. On of third

million net $X.XX Excluding or per share. our income $XX these was impacts,

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

Our was vessel for largely of expenses. for expectations, expense the except third guidance quarter range within the

older VLCCs of some our the off-hire. had quarter, During third and increased repairs

fleet the period. As adjustment a somewhat TCE did our for receive result, a we on earnings pool that retroactive impacted point the

in lightering expenses, with $X and $X million revenue in $X brought million business year-to-date EBITDA in of the the third and contribution $X in quarter vessel million business prosper nearly with Our in contributed in to charter $XX continues quarter. million to million G&A, the Combined over million. lightering about about $XX hire EBITDA

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

$XXX bars quarter. We capital for allocation proceeds our cash about in right a about to and cash to flows during capital This achieved we about receivables third annualized largely cash the million of working cash along XXXX-built third the and due of the MR collection of capital reflect sold price. on net XX% adjusted $XX million the first dry-dock million bridge, for quarter for an The $XX bridge service, our of of of Following of add from yield EBITDA million. on today's quarter the over definition benefit our on the debt for less represents million $XXX the chart $XX therefore, the $XX quarter. in free flow a expenditures left less share million. We, remaining

increased drawn prior million facilities which by $XX about per capacity our in RCF quarter. credit reduced facility $XX the repaid by also We as million that our was $XXX net million a on capacity in the revolving $XX million, quarter,

Lastly, adjusted and million components led dividend this $XXX and and quarter's $XX million, income. of ending prior million $XX in short-term to million comprised returns share net the Altogether, investments to $X.XX represent shareholders in returned repurchases. liquidity a these in million revolving $XXX quarter, share capacity. million cash of undrawn through XX% nearly $XXX we or about per These of of $XXX

Slide now to Moving XX.

are with billion. nearly you to see equates $XXX page. approximately side about detailed liquidity Cash million balance values XX%. $X left-hand strong in net a XX, strong sheet at to of at And this on position and gross the at a billion of over below books loan versus $XXX million. the current Vessels cost have We $X.X remained financial value September market by debt the on of the

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

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

have revolvers. We undrawn in million $XXX

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

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

our Slide On I'll forward-looking date the reflects aligned and to with breakeven last cover, TCE guidance our rates. cash book slide that XX spot

during you call of that earnings next But we of spot today, our While $XX,XXX I'll about day TCE a so this may different. have remind as far average be quarter. fleetwide actual blended per TCE

nearly breakeven our date of is looks free generate the track day fourth $XX,XXX record per continue spot rate spot cash per like time Seaways day, side $XX,XXX forward our composed charter our the build our on less book and spot slide, significant breakeven right during the flows quarter $X,XXX revenues. Based to and breakevens, in fleetwide it returning about about On to can of on to shareholders. cash TCE day a of per of

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

line item We line, and CapEx. for by each quarterly use off-hire don't also included purposes. to expected encourage to in the modeling plan these appendix your our so I I read you

Now to my that like Lois? I'd back concludes comments. Lois remarks. for closing turn call the to her

we which shareholders, maintaining healthy you, provided brief, company. record growing Jeff. Seaways have with to International sheet you of encourage Thank a In I to its you investment built Slide returning entirety. highlights, read XX, has and in the track Seaways a balance On

return XX% to Our compounded is annual our return. total a close representing since inception, shareholder XXX%

represent the $X.XX yield last of Over XX over dividend of XX%. months, combined our a

class continue our average wider scale range the and to for spot see pools. to asset net in investments cast to operating fleet each invested tanker We make growth our we to what sweet opportunities supplement strides a larger in keep in and returns. a for in We've as classes of tanker by global the below

in our cycle. will sheet We downturn for the balance any fortified keep

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

spot XX over $XX,XXX collectively Our per that have we value, looking net ships the XX% unencumbered. forward current debt of months. our tankers When are day, earned breakeven we is fleet's and under XX

operator, cash We with that like for value company expect shareholders. And to and would the put questions. continue work open said, will for to we to generating for our creating the lines we that

Omar question Instructions] line from from [Operator Nokta our And first Jefferies. the comes of

Just had a couple of questions.

the Obviously, a wanted tankers the and second as forward product market products, into now a get crude move Wanted for it fourth is First, tanker I "invading" now horizon of theme have as the the and what's sense a especially that ships driving was in to we their But And fleet. ask improving, on to the some about then softness on here of lot have rates crude here? of do third a to continued you to soft obviously, what could quarters trades. There's quarter. and from product rates away the kind a that from products. cannibalizing talk, remain reversal? moved just you with potentially here see lead

Omar. Absolutely, Yes.

at our strong. at in look just compare You incredibly day, it in was And if performance XX,XXX the is per you know XXXX, if spot in quarter on interesting third the third what's year-over-year quarter. you to it's XXXX the MRs $XX,XXX

have MRs be looking in very quarter, own close per and fourth continued to the their So independent you're really to days hold day. just at $XX,XXX strong. Book the

out Russian seeing depending. pretty -- a You're that's haul. The rates is diesel U.S. and The of but Russian we're you're not a those leading U.S. between sort lot lot of putting product long of seeing is and barrels, Brazil, then defend.

demand have some U.S. then So you're more on Coast to as we I U.S. for you Coast, that is run the you in look going are the XXXX, look product. refinery West still the when sentiment at market it refineries that to and the like their see announced think looks one EU a forward under down, the there closed products, but margins there pressure, course. And they yet,

seems that XXXX. side early it we off look too write to wouldn't here I product us as the So at

yes, That to in clearly, strong I begin and actually the quarter sense. makes with guess, very $XX,XXX, the pretty... third rate

Yes.

I'd general, a there's because research say we've healthy. this kind with note, general even broader sector, word to on still seen outperformance though the view what malaise are used I've in just but indices. I solid rates the of just maybe people's in guess of terms in -- the relative

term Has You're physical seems of in the specifically? just know, it generating X but unexcitedness. cash be sloppiness, separate unexcitement. What just don't I the just things any market maybe and perhaps this too, its you sale good of are seeing flow. maybe point? of kind of, say free a to sense kind equity purchase the in or good charter made There that into Is of market, sort or way at that is completely

Omar. I'm just our that to going on over to Officer, Chief to turn Commercial opine Derek, it

the we coming seen MR a that yet, Thanks, on larger Lois. invasion to most the mean we of you about already hard little sort specifically, talked Omar, Like crude the gone of them rates side the I with off ships through MR market. have Lois market. of like hit side, if clean and you is in think was, market I bit what working into we're charter that the said, back haven't term will. the

expect the we to clean improve. to So markets continue

off much of Omar, rates, and purchase inventory that for but but So the they we much. -- and think amount market, I decent we're a haven't haven't really in come decrease price out a S&P seeing that is sale the yet. some term there there, seen older there all of sell, too market, of ships to

comes The next question from from Bank. Deutsche Chris Robertson

I on relates fruition, crude? as wanted geopolitical but market by some on that on product impact tanker potentially side the made to some bit of Russia. came question tanker would the a If little a you on to here also it energy increasing advisers comments ask to specifically, what think on the here do be just sanctions Trump

-- reducing some tankers I you what maybe would flow, oil impact could Chris, Venezuela Brent's on more more around be exports, election, some U.S. on we $XX. indicators, out that squeezing uranium some and and tankers could sanctioned well. sanctioned holding drilling potentially the as Potentially early parties on see Well, say and is

Russian potentially feeds about Is price see elections, into sure to flows specifically you have followed kind in sanctioning other have -- any that that uncertainty thinking still that not into an how have we'll equal seems developments related those action. will I'm of we like to how certainty oil creep you're though in of not So the political what dealing. up talking world. of than the in just of reference? policy is who even market uncertainty now demand that 'XX. It have the And feeding to uncertainty

to hard It's what know exactly the are. policies

more sure, with we I'm you. some heads questions, to don't be I to So honest scratch Maybe not ask so our can company-specific have here.

with that maybe at the in significant guys to -- fourth third do NAV, just the are the during trying target trading on million Are potentially thinking Just quarter? repurchases you you to the look of in would to fourth you you the more discount for about here a a in did amount opportunity quarter. How that remains. try the repurchase shares is $XX Or million $XX similar in terms program to quarter?

in to want you do would me Jeff, -- you there? jump

-- tool option we the We that for as use want replenished XX were Sure. keep because kit the in that we in tool quarter, an and ourselves. it third to we to

recharging as important I us. But going plan worked into our still of that be it's we've by we'll returning think price. leaned no to that market. see tool signal We'll main That's our we cash as way willing can and to going for no program monitor set just Chris, be it's dividends -- forward. to preferred and use. shareholders a reserve there's set no it. that to You -- guideline that's repurchase that the there's for But

comes The from from Ben Stifel. next question Nolan

This Galanti about I to Angeles impact West refinery. the the how closure I business? Los the is does ask Ben. mean, Panamax on of Frank for wanted that Coast

to that going to Derek one. it opine turn Solon, just on over I'm to

further And then on for Lois. both clean of at closure interesting it, locally. right? So lot crude Thanks, us, but crude business a not there's side, crude PADD reasons, side, demand the think the you're necessarily reasons product see the Thanks of be the imports, side. that on The refinery going for into going question. refinery looking for closing sort sourced to is on the product and to, was and we Because is we'll X.

more go barrels Vancouver afield. we that's of or get to TMX, its ramp and and be online come of as bigger back further sort to up displaced come see sort So exports, up

for be us. should beneficial ultimately So

little bit. And Okay. a switching then gears

values make specifically, recent the X? of the think M&A? or sort equity the tanker industry consolidation market And the harder in to next how it that you to sort does in of likely do the consider and were see pullback Given year in

could Trump influenced policy by knows. that Frank, be who Interestingly,

regulations You stances -- sure very consolidation more up more towards owners, to sustainability and tougher M&A. had policies, I in continue But a very research on friendlier and strict and need get development And noncompete see perhaps market case. believe any see not on to application is fragment I on the making as front. you'll you mean the of keeping tanker spend do tougher just you're tanker that and we'll and

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

firm production place, demand with mean still cuts that or on would vessels? growth you classes non-OPEC the holding of affect crude different ton-mile for demand Latin OPEC+ either shift on Lois, OPEC+ away like demand a to How touched countries does America, U.S. in that from of production

Yes. That's non-OPEC million anywhere looking growth million X.X demand question X about barrels to XXXX, you're million. of at really because from right the and growth projections X.X

out of it is So it growth, does it Americas, you're to stated and not, that OPEC+ a and then or a good not comes moving and or kind the different barrels. quota of barrels of presence, the battle whether how whether lot extra is how -- classes. The on it the releases kind not right, much go we largely then or meets West, affect many it -- the then construct. from of those to demand and upside Non-OPEC

into and Some Europe, are going are some going East.

of the for is see will that that OPEC when for bit additive back barrels little a as ton-miles a BDs. bringing So be assist their and we

to does coming debt on and you've tremendous that How returning financial pipeline you? of shareholders? for amortization even look flexibility have got online. the your a a your And You bit Great. with cash quite amount asset acquisition,

here not we the allows renewing fleet. not but which kind down job to me facility. of No, wanted again one you us again, through that to balance or all to the what team cash and of throughout this and primarily is 'XX, deploying that's sets our in us his thirdly, 'XX secondarily Jeff optionality the on returns, that. in pay shareholder And choose, It a great. did really enhancing want the and make XXXX have at see flow, Seaways, I of up comment whether that is sheet appreciate to call, nonadvertising free fully I stellar through

we're We a So a feel the just our putting and LRX like pipeline. us half-filed situation. in great flow work, of got in the for look newbuildings don't cash situation. We're in a it spot. opportunity all we're in puts We've

question The Sherif next BTIG. from comes from Elmaghrabi

you volatility done that well think recycling how First, continues needs have and spending? very recent the ship and thanks age, to to spot The simply, what fleet, higher? dark fleet do of possibly rates the the

happen. able and -- tepid and can't some indeed, markets, to I we are some out and being We okay the see you trade could get vessels aged force we these and forced where now. of they of recycling. The market If see right tanker lukewarm of are see of and could sanctioned you it sanctions trades tightened did did back into legit strong. still are they're some construct out the markets that's hear an very know that

XX%, You just now book digits, ordering X our now. not like XX%, -- it's order and way see down over it's it's years. is the right it's spread but slow to And double

backloaded, that's percent of only and have XXXX, a couple So coming. you

I'd we're see need radius we just how folk's have ages an going on -- older juncture, home It's head some do going we XX So say at water on out. with renewal then to and yes, we average. 'XX the these to as tankers push into approaching old

I see.

maybe few vessels the bit little catalysts coming up of of age. a sweet there continuing some spot So to with a answering

are to pretty values far considering options going at? are out under remind deleveraging, especially if those So where leasebacks. could financed second, sale see can there be where accelerate But any maturities most asset repurchase Jeff, for are the The that all are arrangement. moment vessels of these Seaways at you versus the on vessels us upcoming

Sure.

are So favorable. leasebacks some -- the some not of

sale favorable very up that known there for option of the one that ours of long-term. think that it's the But well coming end of stay rates a -- those are have towards in purchase leasebacks Some there's happily 'XX. does I such a they'll

answer that's 'XX, But calendar end. Does we'll is Yes. that there something towards evaluate. question? your the one So back certainly in that's

of it's we at again, case-by-case for a the and some November optionality of we the want in look come then to. 'XX some on actually up back others have 'XX, end So 'XX. in we'll do it specifically refinancing But basis, if but

in further I have back currently final remarks. no we any hand queue, As the to Zabrocky questions over Lois will for

everyone, to we very build us, next so as look for much, joining you forward on the and performance. you Thank Thank quarter we strong much. Seaways

That does a earnings the and your quarter call. nice participants. We Inc. conclude Seaways, International XXXX third conference presence day. Have appreciate

disconnect. You may now