International Seaways(US:INSW)2019-11-07 13:16Financial Performance - For the three months ended September 30, 2019, the company's TCE revenues increased by $14,555, or 28%, to $65,808 from $51,253 in the same period of 2018[166]. - Income from vessel operations increased by $80,943 to $8,547 from a loss of $72,396 in the first nine months of 2018[168]. - TCE revenues increased by $72,258, or 48%, to $222,324 from $150,066 in the corresponding period of the prior year[169]. - TCE revenues for the Crude Tankers segment increased by $63,063, or 61%, to $167,016 from $103,953 in the first nine months of 2018[183]. - TCE revenues for the Product Carriers segment increased by $5,457, or 50%, to $16,362 for Q3 2019 from $10,905 in Q3 2018[190]. - For the first nine months of 2019, TCE revenues increased by $9,195, or 20%, to $55,308 from $46,113 in the same period of 2018[192]. - Adjusted EBITDA for the nine months ended September 30, 2019, was $92,474,000, significantly higher than $22,066,000 for the same period in 2018[206]. - For the three months ended September 30, 2019, the company reported a net loss of $11,095,000, compared to a net loss of $47,786,000 for the same period in 2018[206]. Fleet and Operations - The company derived 75% of its TCE revenues from the Crude Tankers segment for the three months ended September 30, 2019, compared to 79% for the same period in 2018[148]. - The company's fleet consisted of 46 vessels with a total deadweight tonnage of 7.0 million dwt as of September 30, 2019[149]. - The average number of owned vessels decreased to 25.0 in the first nine months of 2019 from 26.4 in the prior year[173]. - The average number of vessels chartered-in under operating leases increased to 4.2 in the first nine months of 2019 from 2.2 in the prior year[173]. - Average daily TCE rate increased to $22,577 in the first nine months of 2019 from $14,226 in the prior year[173]. - Average daily TCE rate rose to $12,934 in Q3 2019, up from $7,368 in Q3 2018, reflecting a significant increase in earnings across all fleet sectors[190]. Market Conditions - Global oil consumption for Q3 2019 was estimated at 101.3 million b/d, an increase of 1.3% compared to Q3 2018[156]. - OPEC crude oil production averaged 29.3 million b/d in Q3 2019, a decrease of 3.3 million b/d from Q3 2018[157]. - U.S. crude oil imports decreased by 1.0 million b/d to 6.9 million b/d in Q3 2019 compared to Q3 2018, with imports from OPEC countries decreasing by 1.5 million b/d, a 55% decrease[158]. - The tanker fleet over 10,000 dwt increased by 6.0 million dwt in Q3 2019, with VLCCs, Suezmaxes, and Aframax vessels contributing to this growth[161]. - Crude tanker rates were relatively flat in Q3 2019, but spot rates began to increase in September due to geopolitical factors[164]. Expenses and Financial Obligations - Charter hire expenses increased by $14,539 to $28,388 in the first nine months of 2019 from $13,849 in the first nine months of 2018[184]. - Vessel expenses decreased by $2,865 to $69,141 in the nine months ended September 30, 2019 from $72,006 in the corresponding period of 2018[184]. - Charter hire expenses increased by $1,412 to $6,256 in Q3 2019 from $4,844 in Q3 2018, primarily due to new time chartered-in vessels[191]. - General and administrative expenses rose by $1,015 to $6,449 in Q3 2019, driven by increased compensation and benefits costs[195]. - Interest expense for Q3 2019 was $17,010, a decrease from $17,320 in Q3 2018, while for the nine months it rose to $51,986 from $42,027[200]. Liquidity and Debt Management - As of September 30, 2019, total liquidity was $174,222,000, consisting of $124,222,000 in cash (including $55,839,000 of restricted cash) and $50,000,000 of undrawn revolver capacity[210]. - The company's total debt outstanding as of September 30, 2019, was $767,749,000, with a debt to total capitalization ratio of 43.9%, slightly down from 44.5% at December 31, 2018[213]. - The company executed a disciplined capital allocation strategy, using proceeds from the sale of its LNG Joint Venture to reduce leverage and lower its cost of capital[226]. - The company anticipates a decrease in cash interest expense by approximately $8,200 annually due to a prepayment of $100,000 on the 2017 Term Loan Facility[202]. - As of September 30, 2019, the company had working capital of approximately $59,000,000, down from $92,000,000 at December 31, 2018[208]. - As of September 30, 2019, the total aggregate contractual obligations amount to $1,074,383,000, with significant obligations in the years 2023 and beyond[233]. Strategic Actions - The company sold its 49.9% ownership interest in the LNG Joint Venture for $123,000, expecting to record a cash gain of approximately $3,000[199]. - The company made a prepayment of $100,000,000 on the 2017 Term Loan Facility, resulting in a proportional reduction in future quarterly principal amortization payments[223]. - The company intends to use net proceeds from equity offerings for general corporate purposes, including capital expenditures and acquisitions[217]. - The Company has commitments for the purchase and installation of ballast water treatment systems and scrubbers, potentially increasing commitments by approximately $6,100,000[236]. - The Company entered into an interest rate collar agreement covering a notional amount of $350,000, effective July 31, 2019, to manage interest rate exposure[238]. - The fixed rate for the Sinosure Credit Facility was reduced from 2.99% to 2.76% as of March 21, 2019, following an extension of the interest rate swap agreement[239]. - The Company is evaluating its exposure to LIBOR in light of its expected discontinuation after December 31, 2021[240]. Regulatory and Compliance - There were no changes in the Company's internal control over financial reporting during the three months ending September 30, 2019[247]. - The Company has a diversified group of major financial institutions for managing exposure to nonperformance on derivative financial instruments[237]. - The Company expects to explore refinancing options for the 2017 Term Loan Facility and other facilities[238].