INSW’s losses increase

Aug 09 2018


International Seaways (INSW) has reported a net loss for the second quarter 2018 of $18.8 mill, compared to the net loss of $11.6 mill in the second quarter of 2017.

This increase reflected a decline of $19.3 mill in TCE revenues compared with 2Q17, higher interest expense of $3.8 mill and a reduction in equity in income of affiliated companies of $5 mill.

 

These negative factors were partially offset by a net gain on vessel disposals during the period of $6.7 mill, as well as decreases in expenses associated with changes to the company’s debt facilities aggregating $10.1 mill and decreases in vessel expenses of $3.8 mill and depreciation and amortisation of $2.3 mill.

 

Net loss for the first half of 2018 was $48.1 mill, compared to $6.4 mill in 1H17.

 

Consolidated TCE revenues for 2Q18 were $50 mill, compared to $69.3 mill in 2Q17. Shipping revenues were $56.9 mill, compared to $72 mill in the previous period.

 

Consolidated TCE revenues for 1H18 were $98.8 mill, compared to $153.4 mill for the first half of last year. Shipping revenues for the first half of 2018 were $108.9 mill, compared to $160.7 mill in 1H17. The decline in TCE revenues partly reflected the effect of positioning vessels for sale as part of the fleet renewal strategy.

 

The reduction in equity in income of affiliated companies was principally attributable to decreases in earnings from the two FSO joint ventures, as charter rates in the five-year service contracts that commenced in the third quarter of 2017 are lower than the charter rates included in the service contracts under which the FSO joint ventures operated during 2Q17.

 

Adjusted EBITDA was $9.2 mill for the quarter, compared to $32 mill in 2Q17. For 1H18, adjusted EBITDA was $15.7 mill, compared to $78.6 mill for 1H17.

 

TCE revenues for the Crude Tankers segment were $34.4 mill for the quarter, compared to $45.7 mill in 2Q17.

 

This decrease resulted primarily from the impact of lower average blended rates in the VLCC and Aframax sectors, aggregating about $15.4 mill. VLCC and Aframax spot rates declined to around $12,200 and $11,100 per day, respectively.

 

About $6.1 mill of the TCE revenue reduction represents the impact of INSW’s only ULCC being idle for the second quarter and a 2000-built VLCC being held-for-sale as of the end of January, 2018 through its sale in April, 2018.

 

These declines were partially offset by the impact of 540 additional revenue days, reflecting the two Suezmaxes and one VLCC that were acquired in 2H17 and six VLCCs that were acquired in June, 2018, aggregating $8.8 mill.

 

TCE revenues for the Product Carriers segment were $15.6 mill for the quarter, compared to $23.5 mill in 2Q17.

 

This decrease was primarily due to a decline in average daily blended rates earned by the MR fleet, with spot rates declining to around $8,600 per day, accounting for $2.3 mill of the decline in TCE revenues.

 

In addition, the impact of 639 fewer MR revenue days, due to the sales of five MRs between August, 2017 and April, 2018 and the redelivery of three MRs to their owners between December, 2017 and June, 2018 at the expiry of their respective bareboat charters, accounted for $6.3 mill of the lower TCE revenues.

 

These declines were partially offset by increased daily rates earned by the LR1 and LR2 fleets.

 

“During a challenging tanker environment, we took steps to enhance our earnings power ahead of a market recovery, while increasing our cash position to $143 mill,” said Lois Zabrocky, INSW’s president and CEO. “We completed the acquisition of six highly efficient VLCCs, enabling the company to significantly enhance its fleet size and age profile. We are pleased to have grown and renewed our fleet during a low point in the cycle without diluting shareholders and in a manner that maintains International Seaways’ overall balance sheet strength.

 

“Based on our lean and scalable model with predictable cash flows from our joint ventures and contracted fixed rate charters, we remain in a strong position to effectively operate through the current tanker cycle. Our success increasing our fleet’s DWT by 22% combined with our significant spot market exposure also bodes well for International Seaways to capitalise on future improvements to the product and crude tanker markets,” she added.

 



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Sept 2018

SMM - scrubbers - coatings - drones - ethane powered tankers - MEG4 - contaminated fuel oil