INSW benefits from increased revenues

Mar 15 2019


International Seaways (INSW) net income for the fourth quarter of 2018 was $7 mill, compared to a net loss of $90.7 mill in 4Q17.

This increase in net income primarily reflected an increase in TCE revenues of $27.9 mill and a decrease in vessel impairment charges of $79 mill, compared with 4Q17. In addition, the quarter-over-quarter improvement reflects a decrease in vessel expenses.

These positive factors were partially offset by increases in charterhire expenses, principally attributable to the company’s lightering business, a decrease in equity in income of affiliated companies and an increase in interest expense.

The 4Q17 net loss reflected the impact of vessel impairment charges of $81.1 mill.

Consolidated TCE revenues for 4Q18 were $93 mill, compared to $65.1 mill in 4Q17. Shipping revenues were $100.6 mill, compared to $69.4 mill in 4Q17.

Adjusted EBITDA was $46.2 mill for the quarter, compared to $23.1 mill in the 4Q17, principally driven by higher daily rates.

TCE revenues for the Crude Tankers segment were $71.6 mill for the quarter, compared to $42.1 mill in 4Q17. This increase primarily resulted from higher average rates in the VLCC, Suezmax and Aframax sectors, with spots rates climbing to around $31,700, $30,600 and $19,000, per day, respectively, aggregating about $18.4 mill.

TCE revenues for the Product Tankers segment were $21.5 mill for the quarter, compared to $23 mill in 4Q17. This decrease primarily resulted from the impact of a decline in revenue days in the MR sector, accounting for $6.3 mill of the change.

This was mostly offset by the impact of higher average daily rates earned by the LR1 and MR fleets, with spot rates rising to around $22,200 and $12,900 per day, respectively, aggregating about $4.9 mill.

Net loss for the full year was $88.9 mill, compared with a net loss of $106.1 mill for 2017. The 2017 results reflect $88.4 mill in vessel impairment charges and $9.2 mill of costs associated with the company’s debt refinancing.

During 2018, the loss from vessel operations decreased to $54.5 mill from $107.9 mill in 2017. Consolidated TCE revenues for the full year were $243.1 mill, compared to $275 mill for 2017.

Adjusted EBITDA was $68.3 mill for 2018, compared to $117.8 mill for 2017.

“2018 was an important year for us, as we executed on our stated strategy of disciplined capital allocation,” said Lois Zabrocky, INSW’s president and CEO. “We capitalised on attractive asset values at the bottom of the cycle, increasing the size and reducing the age profile of our fleet and enhancing our earnings power ahead of a market recovery without issuing equity.

“Our significant operating leverage to a market recovery was evident in the fourth quarter, as our cash flow and earnings immediately reflected the stronger rate environment and we returned to profitability. During the year, we also maintained our strong balance sheet, increasing total liquidity to $167.6 mill and ending the year once again with one of the lowest net loan to value profiles in the sector.”

“We are encouraged by the strength of the tanker market in the fourth quarter and how the market is developing thus far in 2019. While the exact timing for a sustained recovery is not yet clear, we see optimistic signs to support a balanced market in the near term led by increasing exports out of the US Gulf and sustained growth in global oil demand.

“In addition, we continue to expect the upcoming IMO 2020 regulations will boost demand for both crude and product tankers, as overall crude volumes are set to increase and new trading patterns for petroleum products develop,” she said.

 



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