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International Seaways Reports Third Quarter 2021 Results

International Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”), the largest U.S. based publicly-traded tanker company, today reported results for the third quarter of 2021.

Highlights

  • Completed the previously announced merger with Diamond S Shipping Inc. (NYSE: DSSI), “Diamond S”, creating one of the largest U.S.-listed diversified tanker companies. The transaction significantly enhanced INSW’s scale in both the crude and clean product markets and is expected to generate approximately $32 million in cost and revenue synergies, expected to be realized within 2022. Integrated the business and personnel of Diamond S to create a leading global maritime energy transportation platform.
  • Continued our track record of returning capital to shareholders:
    • Pre-merger special dividend of $31.5 million, or $1.12 per share.
    • Regular quarterly cash dividend of $0.06 per share in September 2021.
  • Net loss for the third quarter was $67.4 million, or $1.44 per diluted share, compared to net income of $14.0 million, or $0.50 per diluted share, in the third quarter of 2020. Net loss for the quarter reflects the impact of the disposal of vessels, including impairments, and merger related charges aggregating $38.0 million. Net loss excluding these items was $29.4 million, or $0.63 per diluted share.
  • Despite the challenging tanker market environment, generated approximately $8 million in Adjusted EBITDA(A) for the quarter before the impact of the disposal of vessels, including impairments and one-time merger related charges.
  • Enacted a post-merger asset optimization program which has resulted in the sale of a 2002-built VLCC, a 2002-built Panamax, a 2003-built Panamax, and seven MRs acquired in the merger, and the agreement to sell three additional 2002-built Panamaxes and a 2007-built Handysize product carrier.
  • Post quarter-end, announced a liquidity enhancing refinancing of six VLCCs:
    • Transaction funded in early November 2021 and resulted in gross financing of approximately $375 million.
    • The capital was used to repay and terminate the current $228 million Sinosure Credit Facility, with the balance intended to generate incremental available liquidity of approximately $150 million.
  • Cash(B) was $132.6 million as of September 30, 2021; total liquidity was $172.6 million, including $40 million of undrawn revolver capacity.
    • Pro forma for the announced refinancing, total liquidity is over $300 million
  • Demonstrated INSW’s continued commitment to industry sustainability efforts through enforcement of responsible recycling standards on the end-of-life disposed assets and the previously announced commencement of the construction of next generation fueled vessels.

“Despite the challenging tanker environment, we continue to take important steps to position Seaways as the global leader in maritime energy transportation. With our expanded footprint, we are ideally positioned to capitalize on a tanker market recovery during a time when global oil demand is growing, inventory destocking is nearing completion, refinery margins are improving and OPEC production is increasing,” said Lois K. Zabrocky, International Seaways’ President and CEO. “We are pleased to have completed our transformational and highly accretive merger with Diamond S in the third quarter and are in a strong position to draw on our enhanced scale, capabilities and operating leverage to take advantage of the recovery in tanker demand. The integration process and post-merger asset optimization program continues to proceed as planned, and we will continue to create lasting value for all of our stakeholders.”

Ms. Zabrocky concluded, “As part of our disciplined and balanced approach to capital allocation, we continue to return capital to shareholders. During the third quarter, we paid both a $31.5 million, or $1.12 per share, special dividend, as well as our regular quarterly dividend, increasing the total amount we have returned to shareholders since 2020 to $73 million. With our $50 million share repurchase authorization in place, we remain in a strong position to act opportunistically for shareholders.”

Jeff Pribor, the Company’s CFO, added, “Maintaining a strong and diverse capital structure has been a pillar of our success and we continue to make progress in this critical area. With current total liquidity of over $300 million we are positioned to operate effectively in diverse tanker markets and take advantage of attractive opportunities as they arise. As we look toward the future, following our highly accretive merger, we remain on track to achieve cost synergies in excess of $23 million and revenue synergies of $9 million in 2022 as previously reported.”

Third Quarter 2021 Results

Net loss for the third quarter of 2021 was $67.4 million, or $1.44 per diluted share, compared to net income of $14.0 million, or $0.50 per diluted share, for the third quarter of 2020. The decline in the third quarter of 2021 results primarily reflects significantly lower TCE revenues(C) and an increase in vessel expenses, which were not sufficiently covered with a corresponding increase in TCE revenues despite having a larger post-merger fleet, and increases in depreciation and amortization and interest expense, both of which reflect the Company’s increased scale after the completion of the merger. Net loss for the nine months ended September 30, 2021 was $99.5 million, or $2.90 per diluted share, compared to net income of $111.4 million, or $3.88 per share, for the nine months ended September 30, 2020.

Consolidated TCE revenues for the third quarter were $72.7 million, compared to $94.0 million for the third quarter of 2020. Shipping revenues for the third quarter were $84.8 million, compared to $99.9 million for the third quarter of 2020. Consolidated TCE revenues for the nine months ended September 30, 2021 were $162.9 million, compared to $349.1 million for the nine months ended September 30, 2020. Shipping revenues for the nine months ended September 30, 2021 were $177.9 million, compared to $364.9 million for the nine months ended September 30, 2020.

Adjusted EBITDA for the third quarter was $8.0 million, compared to $54.6 million for the third quarter of 2020. Adjusted EBITDA was $28.5 million for the nine months ended September 30, 2021, compared to $225.1 million for the nine months ended September 30, 2020.

Crude Tankers

TCE revenues for the Crude Tankers segment were $34.8 million for the third quarter, compared to $79.8 million for the third quarter of 2020. Lower average rates in the VLCC, Suezmax, and Panamax sectors, with average spot earnings declining to approximately $10,700, $10,700, and $9,800 per day, respectively accounted for $50.0 million of this decrease. Also contributing to the decrease in TCE revenues was the impact of a 429-day reduction in VLCC revenue days, aggregating $19.6 million; and a $1.0 million decrease in revenue in the Lightering business in the third quarter. Partially offsetting the decline in TCE revenues was a $25.1 million days-related increase in the Suezmax fleet, due to the acquisition of 13 Suezmaxes as a part of the Diamond S. merger. Shipping revenues for the Crude Tankers segment were $41.8 million for the third quarter of 2021, compared to $83.6 million for the third quarter of 2020. TCE revenues for the Crude Tankers segment were $101.8 million for the nine months ended September 30, 2021, compared to $274.5 million for the nine months ended September 30, 2020. Shipping revenues for the Crude Tankers segment were $111.8 million for the nine months ended September 30, 2021, compared to $287.7 million for the nine months ended September 30, 2020.

Product Carriers

TCE revenues for the Product Carriers segment were $38.2 million for the third quarter, compared to $14.2 million for the third quarter of 2020. This increase was primarily the result of a net 2,719-day increase in MR revenue days, aggregating $37.0 million, as the Company acquired 44 MRs in conjunction with the merger, seven of which were sold during the third quarter. Partially offsetting the increase in TCE revenues were lower period-over-period average daily blended rates earned by the LR1 and MR fleets, which accounted for a decrease in TCE revenues of approximately $14.7 million. Average spot rates fell during the third quarter of 2021 to approximately $12,500 and $10,000, respectively, for the LR1 and MR fleets. Shipping revenues for the Product Carriers segment were $43.1 million for the third quarter of 2021, compared to $16.2 million for the third quarter of 2020. TCE revenues for the Product Carriers segment were $61.0 million for the nine months ended September 30, 2021 compared to $74.5 million for the nine months ended September 30, 2020. Shipping revenues for the Product Carriers segment were $66.1 million for the nine months ended September 30, 2021, compared to $77.2 million for the nine months ended September 30, 2020.

Completed Liquidity Enhancing Financing

On October 26, 2021, the Company entered into lease financing arrangements with Ocean Yield ASA for the sale and leaseback of the six VLCCs that collateralized the Sinosure Credit Facility, for a net sale price of $375 million in total, which represents 90% of the fair value of the six VLCCs. This refinancing generated incremental available liquidity of approximately $150 million for the Company. The proceeds from the transactions, which were received on November 8, 2021, were used to prepay the $228 million outstanding loan balance under the Sinosure Credit Facility, with the balance intended for general corporate purposes. Under these lease financing arrangements, we continue to control the vessels. Each of the six VLCCs is subject to a 10-year bareboat charter with purchase options exercisable commencing at the end of the fourth year and purchase obligations at the end of the 10-year term. The terms and conditions, including financial covenants, of the arrangements are in-line with those of the Company’s existing debt facilities.

Completed Merger with Diamond S Shipping

The Company completed its previously announced merger with Diamond S. The Company expects to achieve cost synergies of approximately $23 million and revenue synergies of $9 million, which are expected to be fully realizable within 2022. International Seaways is now the second largest U.S.-listed tanker company by vessel count with 92 vessels and the third largest by deadweight tons (“dwt”), aggregating approximately 10.7 million dwt.

Vessel Sales

During the third quarter of 2021, the Company sold a 2002-built VLCC, a 2002-built Panamax, a 2003-built Panamax, and seven MRs acquired as part of the merger. The Company also agreed to sell three additional 2002-built Panamaxes. Subsequent to the end of the quarter, the Company agreed to sell a 2007-built Handysize product carrier acquired as part of the merger. This Handy and the Panamaxes are expected to be delivered to their buyers during the fourth quarter of 2021.

The 14 vessels sold are expected to provide aggregate net proceeds of approximately $83 million after the repayment of debt.

Charters-in

The Company has time chartered in two, 2008-built LR1s, which will be deployed in our market leading Panamax International pool, for periods ranging from 12 to 18 months, including one subsequent to quarter end.

Payment of Regular Cash Dividend

The Company’s Board of Directors declared a regular quarterly dividend of $0.06 per share of common stock on November 8, 2021. The dividend will be paid on December 23, 2021 to shareholders of record at the close of business on December 9, 2021.

Conference Call

The Company will host a conference call to discuss its third quarter 2021 results at 9:00 a.m. Eastern Time (“ET”) on Tuesday, November 9, 2021. To access the call, participants should dial (844) 200-6205 for domestic callers and (929) 526-1599 for international callers. Please dial in ten minutes prior to the start of the call. A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at https://www.intlseas.com.

An audio replay of the conference call will be available until November 16, 2021 by dialing (866) 813-9403 for domestic callers and +44 204 525 0658 for international callers, and entering Access Code 063148.

About International Seaways, Inc.

International Seaways, Inc. (NYSE: INSW) is one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products in International Flag markets. International Seaways owns and operates a fleet of 92 vessels, including 13 VLCCs (including three newbuildings), 15 Suezmaxes, five Aframaxes/LR2s, 10 Panamaxes/LR1s, 41 MR tankers and six Handy tankers. Through joint ventures, it has ownership interests in two floating storage and offloading service vessels. International Seaways has an experienced team committed to the very best operating practices and the highest levels of customer service and operational efficiency. International Seaways is headquartered in New York City, NY. Additional information is available at https://www.intlseas.com.

Forward-Looking Statements

This release contains forward-looking statements. In addition, the Company may make or approve certain statements in future filings with the U.S. Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to the consequences of the Company’s merger with Diamond S and plans to issue dividends, its prospects, including statements regarding vessel acquisitions, expected synergies, trends in the tanker markets, and possibilities of strategic alliances and investments. Forward-looking statements are based on the Company’s current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in the Annual Report on Form 10-K for 2020 for the Company, the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, the Company’s Amended Registration Statement on Form S-4 dated June 3, 2021, and in similar sections of other filings made by the Company with the SEC from time to time. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written and oral forward-looking statements attributable to the Company or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by the Company with the SEC.

Category: Earnings

Consolidated Statements of Operations

($ in thousands, except per share amounts)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Shipping Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Pool revenues

 

$

50,543

 

 

$

49,217

 

 

$

101,657

 

 

$

250,485

 

Time and bareboat charter revenues

 

 

13,664

 

 

 

31,294

 

 

 

40,076

 

 

 

66,553

 

Voyage charter revenues

 

 

20,609

 

 

 

19,372

 

 

 

36,143

 

 

 

47,907

 

Total Shipping Revenues

 

 

84,816

 

 

 

99,883

 

 

 

177,876

 

 

 

364,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Voyage expenses

 

 

11,848

 

 

 

5,851

 

 

 

15,021

 

 

 

15,893

 

Vessel expenses

 

 

58,174

 

 

 

31,501

 

 

 

112,378

 

 

 

94,739

 

Charter hire expenses

 

 

5,679

 

 

 

6,442

 

 

 

17,283

 

 

 

24,213

 

Depreciation and amortization

 

 

25,806

 

 

 

19,014

 

 

 

59,639

 

 

 

56,161

 

General and administrative

 

 

8,191

 

 

 

7,422

 

 

 

23,160

 

 

 

21,550

 

Reversal of expected credit losses

 

 

(62

)

 

 

(13

)

 

 

(19

)

 

 

(80

)

Third-party debt modification fees

 

 

26

 

 

 

-

 

 

 

26

 

 

 

232

 

Merger and integration related costs

 

 

47,079

 

 

 

-

 

 

 

47,560

 

 

 

-

 

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

 

 

(9,104

)

 

 

12,834

 

 

 

(5,088

)

 

 

14,164

 

Total operating expenses

 

 

147,637

 

 

 

83,051

 

 

 

269,960

 

 

 

226,872

 

(Loss)/income from vessel operations

 

 

(62,821

)

 

 

16,832

 

 

 

(92,084

)

 

 

138,073

 

Equity in income of affiliated companies

 

 

5,730

 

 

 

5,356

 

 

 

16,573

 

 

 

15,672

 

Operating (loss)/income

 

 

(57,091

)

 

 

22,188

 

 

 

(75,511

)

 

 

153,745

 

Other (expense)/income

 

 

(113

)

 

 

(208

)

 

 

446

 

 

 

(13,497

)

(Loss)/income before interest expense and income taxes

 

 

(57,204

)

 

 

21,980

 

 

 

(75,065

)

 

 

140,248

 

Interest expense

 

 

(10,639

)

 

 

(7,999

)

 

 

(24,925

)

 

 

(28,889

)

(Loss)/income before income taxes

 

 

(67,843

)

 

 

13,981

 

 

 

(99,990

)

 

 

111,359

 

Income tax provision

 

 

(35

)

 

 

-

 

 

 

(36

)

 

 

(1

)

Net (loss)/income

 

 

(67,878

)

 

 

13,981

 

 

 

(100,026

)

 

 

111,358

 

Less: Net loss attributable to noncontrolling interests

 

 

(526

)

 

 

 

 

 

(526

)

 

 

 

Net (loss)/income attributable to the Company

 

$

(67,352

)

 

$

13,981

 

 

$

(99,500

)

 

$

111,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,903,955

 

 

 

27,932,928

 

 

 

34,395,732

 

 

 

28,517,037

 

Diluted

 

 

46,903,955

 

 

 

28,026,005

 

 

 

34,395,732

 

 

 

28,665,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net (loss)/income per share

 

$

(1.44

)

 

$

0.50

 

 

$

(2.90

)

 

$

3.90

 

Diluted net (loss)/income per share

 

$

(1.44

)

 

$

0.50

 

 

$

(2.90

)

 

$

3.88

 

Consolidated Balance Sheets

($ in thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

(Unaudited)

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

108,897

 

$

199,390

Voyage receivables

 

 

96,858

 

 

43,362

Other receivables

 

 

4,320

 

 

4,479

Inventories

 

 

2,578

 

 

3,601

Prepaid expenses and other current assets

 

 

9,611

 

 

6,002

Restricted cash

 

 

6,517

 

 

-

Total Current Assets

 

 

228,781

 

 

256,834

 

 

 

 

 

 

 

Restricted Cash

 

 

17,177

 

 

16,287

Vessels and other property, less accumulated depreciation

 

 

1,908,928

 

 

1,108,214

Vessels construction in progress

 

 

29,375

 

 

-

Deferred drydock expenditures, net

 

 

44,170

 

 

36,334

Total Vessels, Deferred Drydock and Other Property

 

 

1,982,473

 

 

1,144,548

Operating lease right-of-use assets

 

 

21,992

 

 

21,588

Investments in and advances to affiliated companies

 

 

177,402

 

 

141,924

Long-term derivative assets

 

 

7,318

 

 

2,129

Time charter contracts acquired, net

 

 

3,125

 

 

-

Other assets

 

 

3,565

 

 

3,229

Total Assets

 

$

2,441,833

 

$

1,586,539

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

 

$

49,087

 

$

34,425

Current portion of operating lease liabilities

 

 

6,714

 

 

8,867

Current installments of long-term debt

 

 

220,805

 

 

61,483

Current portion of derivative liabilities

 

 

4,331

 

 

4,121

Total Current Liabilities

 

 

280,937

 

 

108,896

Long-term operating lease liabilities

 

 

13,113

 

 

10,253

Long-term debt

 

 

887,673

 

 

474,332

Long-term derivative liabilities

 

 

2,678

 

 

6,155

Other liabilities

 

 

12,701

 

 

14,861

Total Liabilities

 

 

1,197,102

 

 

614,497

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Total Equity

 

 

1,244,731

 

 

972,042

Total Liabilities and Equity

 

$

2,441,833

 

$

1,586,539

Consolidated Statements of Cash Flows

($ in thousands)

 

 

Nine Months Ended September 30,

 

 

2021

 

2020

 

 

(Unaudited)

 

(Unaudited)

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net (loss)/income

 

$

(100,026

)

 

$

111,358

 

Items included in net (loss)/income not affecting cash flows:

 

 

 

 

 

 

Depreciation and amortization

 

 

59,639

 

 

 

56,161

 

Loss on write-down of vessels and other assets

 

 

3,497

 

 

 

17,136

 

Amortization of debt discount and other deferred financing costs

 

 

1,609

 

 

 

2,338

 

Amortization of time charter hire contracts acquired

 

 

1,743

 

 

 

-

 

Deferred financing costs write-off

 

 

-

 

 

 

13,073

 

Stock compensation

 

 

8,894

 

 

 

3,993

 

Earnings of affiliated companies

 

 

(16,573

)

 

 

(15,566

)

Merger and integration related costs, non-cash

 

 

31,053

 

 

 

-

 

Change in fair value of interest rate collar recorded through earnings

 

 

-

 

 

 

1,271

 

Write-off of registration statement costs

 

 

694

 

 

 

-

 

Other – net

 

 

1,184

 

 

 

904

 

Items included in net (loss)/income related to investing and financing activities:

 

 

 

 

 

 

Gain on disposal of vessels and other property, net

 

 

(8,585

)

 

 

(2,972

)

Loss on extinguishment of debt

 

 

-

 

 

 

1,195

 

Cash distributions from affiliated companies

 

 

6,775

 

 

 

8,500

 

Payments for drydocking

 

 

(23,816

)

 

 

(15,825

)

Insurance claims proceeds related to vessel operations

 

 

1,184

 

 

 

4,706

 

Changes in operating assets and liabilities

 

 

(16,305

)

 

 

12,519

 

Net cash (used in)/provided by operating activities

 

 

(49,033

)

 

 

198,791

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Cash acquired, net of equity issuance costs related to merger

 

 

54,155

 

 

 

-

 

Expenditures for vessels and vessel improvements

 

 

(44,214

)

 

 

(46,449

)

Proceeds from disposal of vessels and other property, net

 

 

113,510

 

 

 

13,564

 

Expenditures for other property

 

 

(450

)

 

 

(493

)

Investments in and advances to affiliated companies, net

 

 

(6,861

)

 

 

2,347

 

Net cash provided by/(used in) investing activities

 

 

116,140

 

 

 

(31,031

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Issuance of debt, net of issuance costs

 

 

19,469

 

 

 

362,989

 

Extinguishment of debt

 

 

-

 

 

 

(422,699

)

Premium and fees on extinguishment of debt

 

 

-

 

 

 

(163

)

Payments on debt

 

 

(112,394

)

 

 

(66,636

)

Borrowings on revolving credit facilities

 

 

40,000

 

 

 

-

 

Repayments on revolving credit facilities

 

 

(54,246

)

 

 

-

 

Cash payments on derivatives containing other-than-insignificant financing element

 

 

(3,977

)

 

 

(1,331

)

Repurchases of common stock

 

 

-

 

 

 

(29,997

)

Cash dividends paid

 

 

(37,920

)

 

 

(5,091

)

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

 

 

(1,125

)

 

 

(1,272

)

Other – net

 

 

-

 

 

 

(149

)

Net cash used in financing activities

 

 

(150,193

)

 

 

(164,349

)

Net (decrease)/increase in cash, cash equivalents and restricted cash

 

 

(83,086

)

 

 

3,411

 

Cash, cash equivalents and restricted cash at beginning of year

 

 

215,677

 

 

 

150,243

 

Cash, cash equivalents and restricted cash at end of period

 

$

132,591

 

 

$

153,654

 

Spot and Fixed TCE Rates Achieved and Revenue Days

The following tables provides a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months ended September 30, 2021 and the comparable period of 2020. Revenue days in the quarter ended September 30, 2021 totaled 6,184 compared with 3,123 in the prior year quarter. A summary fleet list by vessel class can be found later in this press release. The information in these tables excludes commercial pool fees/commissions averaging approximately $631 and $654 per day for the three months ended September 30, 2021 and 2020, respectively.

 

 

Three Months Ended

September 30, 2021

 

Three Months Ended

September 30, 2020

 

 

Spot

 

Fixed

 

Total

 

Spot

 

Fixed

 

Total

Crude Tankers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VLCC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

10,686

 

$

43,893

 

 

 

 

$

35,740

 

$

73,399

 

 

 

Number of Revenue Days

 

 

761

 

 

92

 

 

853

 

 

810

 

 

362

 

 

1,172

Suezmax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

10,650

 

$

26,604

 

 

 

 

$

28,246

 

$

-

 

 

 

Number of Revenue Days

 

 

748

 

 

90

 

 

838

 

 

180

 

 

-

 

 

180

Aframax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

11,361

 

$

25,746

 

 

 

 

$

10,860

 

$

-

 

 

 

Number of Revenue Days

 

 

276

 

 

76

 

 

352

 

 

368

 

 

-

 

 

368

Panamax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

9,755

 

$

11,054

 

 

 

 

$

15,508

 

$

15,790

 

 

 

Number of Revenue Days

 

 

151

 

 

264

 

 

415

 

 

118

 

 

269

 

 

387

Total Crude Tankers Revenue Days

 

 

1,936

 

 

522

 

 

2,458

 

 

1,476

 

 

631

 

 

2,107

Product Carriers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LR2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

-

 

$

17,797

 

 

 

 

$

21,505

 

$

-

 

 

 

Number of Revenue Days

 

 

-

 

 

92

 

 

92

 

 

92

 

 

-

 

 

92

LR1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

12,476

 

$

-

 

 

 

 

$

14,900

 

$

-

 

 

 

Number of Revenue Days

 

 

523

 

 

-

 

 

523

 

 

534

 

 

-

 

 

534

MR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

10,000

 

$

15,730

 

 

 

 

$

14,368

 

$

-

 

 

 

Number of Revenue Days

 

 

2,668

 

 

124

 

 

2,792

 

 

390

 

 

-

 

 

390

Handy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average TCE Rate

 

$

6,311

 

$

-

 

 

 

 

$

-

 

$

-

 

 

 

Number of Revenue Days

 

 

319

 

 

-

 

 

319

 

 

-

 

 

-

 

 

-

Total Product Carriers Revenue Days

 

 

3,510

 

 

216

 

 

3,726

 

 

1,016

 

 

-

 

 

1,016

Total Revenue Days

 

 

5,446

 

 

738

 

 

6,184

 

 

2,492

 

 

631

 

 

3,123

Revenue days in the above tables exclude days related to full service lighterings and days for which recoveries were recorded under the Company’s loss of hire insurance policies. In addition, during the three months ended September 30, 2021, Suezmaxes and MRs acquired by the Company through the merger were employed on transitional voyages in the spot market prior to delivering to pools. These transitional voyages are excluded from the tables above.

Fleet Information

As of September 30, 2021, INSW’s fleet totaled 92 vessels, including three newbuilds and 89 operating vessels, of which 85 were owned, two were chartered in, and two FSOs were held through joint ventures.

 

 

Vessels Owned

 

Vessels Chartered-in

 

Total at September 30, 2021

Vessel Type

 

Number

 

Weighted

by

Ownership

 

Number

 

Weighted

by

Ownership

 

Total

Vessels

 

Vessels

Weighted

by

Ownership

 

Total Dwt

Operating Fleet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FSO

 

2

 

1.0

 

-

 

-

 

2

 

1.0

 

864,046

VLCC

 

10

 

10.0

 

-

 

-

 

10

 

10.0

 

3,012,171

Suezmax

 

15

 

14.0

 

-

 

-

 

15

 

14.0

 

2,381,911

Aframax

 

2

 

2.0

 

2

 

2.0

 

4

 

4.0

 

452,375

Panamax

 

5

 

5.0

 

-

 

-

 

5

 

5.0

 

348,021

Crude Tankers

 

34

 

32.0

 

2

 

2.0

 

36

 

34.0

 

7,058,524

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LR2

 

1

 

1.00

 

-

 

-

 

1

 

1.0

 

112,691

LR1

 

5

 

5.00

 

-

 

-

 

5

 

5.0

 

372,705

MR

 

41

 

41.00

 

-

 

-

 

41

 

41.0

 

2,059,746

Handy

 

6

 

6.00

 

-

 

-

 

6

 

6.0

 

223,974

Product Carriers

 

53

 

53.00

 

-

 

-

 

53

 

53.0

 

2,769,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Fleet

 

87

 

85.0

 

2

 

2.0

 

89

 

87.0

 

9,827,640

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Newbuild Fleet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VLCC

 

3

 

3.0

 

-

 

-

 

3

 

3.0

 

900,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Newbuild Fleet

 

3

 

3.0

 

-

 

-

 

3

 

3.0

 

900,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating and Newbuild Fleet

 

90

 

88.0

 

2

 

2.0

 

92

 

90.0

 

10,727,640

Reconciliation to Non-GAAP Financial Information

The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures may provide certain investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.

(A) EBITDA and Adjusted EBITDA

EBITDA represents net (loss)/income before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be a substitute for, net income or cash flows from operations as determined in accordance with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net (loss)/income as reflected in the condensed consolidated statements of operations, to EBITDA and Adjusted EBITDA:

 

 

Three Months

Ended

September 30,

 

Nine Months

Ended

September 30,

($ in thousands)

 

2021

 

2020

 

2021

 

2020

Net (loss)/income

 

$

(67,878

)

 

$

13,981

 

$

(100,026

)

 

$

111,358

Income tax provision

 

 

35

 

 

 

-

 

 

36

 

 

 

1

Interest expense

 

 

10,639

 

 

 

7,999

 

 

24,925

 

 

 

28,889

Depreciation and amortization

 

 

25,806

 

 

 

19,014

 

 

59,639

 

 

 

56,161

Noncontrolling interests

 

 

(312

)

 

 

-

 

 

(312

)

 

 

-

EBITDA

 

 

(31,710

)

 

 

40,994

 

 

(15,738

)

 

 

196,409

Amortization of time charter contracts acquired

 

 

1,743

 

 

 

-

 

 

1,743

 

 

 

-

Third-party debt modification fees

 

 

26

 

 

 

-

 

 

26

 

 

 

232

Merger and integration related costs

 

 

47,079

 

 

 

-

 

 

47,560

 

 

 

-

Gain/ (loss) on disposal of vessels and other property, including impairments

 

 

(9,104

)

 

 

12,834

 

 

(5,088

)

 

 

14,164

Write-off of deferred financing costs

 

 

-

 

 

 

572

 

 

-

 

 

 

13,073

Loss on extinguishment of debt

 

 

-

 

 

 

181

 

 

-

 

 

 

1,195

Adjusted EBITDA

 

$

8,034

 

 

$

54,581

 

$

28,503

 

 

$

225,073

(B) Total Cash

 

September 30,

 

December 31,

($ in thousands)

2021

 

2020

Cash and cash equivalents

$

108,897

 

$

199,390

Restricted cash

 

23,694

 

 

16,287

Total Cash

$

132,591

 

$

215,677

(C) Time Charter Equivalent (TCE) Revenues

Consistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow:

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in thousands)

 

2021

 

2020

 

2021

 

2020

Time charter equivalent revenues

 

$

72,968

 

$

94,032

 

$

162,855

 

$

349,052

Add: Voyage expenses

 

 

11,848

 

 

5,851

 

 

15,021

 

 

15,893

Shipping revenues

 

$

84,816

 

$

99,883

 

$

177,876

 

$

364,945

 

Contacts

Investor Relations & Media:

David Siever, International Seaways, Inc.

(212) 578-1635

dsiever@intlseas.com

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