International Seaways(INSW) - 2025 Q1 - Quarterly Results

Report Overview & Highlights First Quarter 2025 Highlights International Seaways reported a decrease in Q1 2025 net income due to lower spot rates, while maintaining strong liquidity and balance sheet metrics, executing a strategic fleet modernization, and continuing robust shareholder returns Q1 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Net Income | $50 million | | Diluted EPS | $1.00 | | Adjusted Net Income | $40 million | | Adjusted Diluted EPS | $0.80 | | Adjusted EBITDA | $91 million | | Total Liquidity (as of Mar 31, 2025) | $673 million | | Net Loan-to-Value (as of Mar 31, 2025) | ~15% | - Concluded a strategic vessel swap, exchanging two older VLCCs and $3 million cash for three modern 2015-built MRs to optimize the fleet[3] - Declared a combined dividend of $0.60 per share for Q1 2025, continuing the policy of returning 75% of adjusted net income to shareholders. Over the last twelve months, combined dividend payments total $4.00 per share, a yield of nearly 10%[4][5] - Management remains constructive on tanker market fundamentals, citing depleted oil inventories that will require replenishment, persistent regional imbalances, and modest fleet growth, which are expected to support demand for seaborne transportation[4] Detailed Financial Results Overall Performance The company experienced a significant year-over-year decline in Q1 2025 financial performance, primarily driven by lower TCE revenues and a substantial drop in average spot earnings across the fleet Q1 Financial Performance Comparison (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $50 million | $144 million | | Diluted EPS | $1.00 | $2.92 | | Shipping Revenues | $183 million | $274 million | | TCE Revenues | $178 million | $271 million | | Adjusted EBITDA | $91 million | $191 million | Segment Performance Both Crude Tankers and Product Carriers segments reported lower TCE revenues in Q1 2025 compared to the prior year, primarily due to weaker spot market rates Crude Tankers Q1 Spot Earnings per Day (YoY) | Vessel Class | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | VLCC | $33,500 | $44,700 | | Suezmax | $30,900 | $44,700 | | Aframax | $25,400 | $40,900 | Product Carriers Q1 Spot Earnings per Day (YoY) | Vessel Class | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | LR1 | $27,400 | $66,300 | | MR | $21,400 | $38,000 | Fleet and Capital Management Fleet Optimization and Newbuilds The company actively optimizes its fleet through strategic vessel swaps and newbuild programs, including six dual-fuel ready LR1 vessels under construction, while securing future revenue through time charter agreements - Concluded a vessel swap by delivering two VLCCs and taking delivery of the remaining two of three MRs, a transaction initiated in Q4 2024[11] - As of April 1, 2025, the company has 13 vessels on time charter with an average duration of two years, securing approximately $283 million in future contracted revenues. An additional one-year time charter on a Suezmax will add another $12 million[12] - The company has six scrubber-fitted, dual-fuel (LNG) ready LR1 vessels under construction in Korea for a total price of approximately $359 million. Deliveries are scheduled between Q3 2025 and Q3 2026[13] Balance Sheet Enhancements The company strengthened its balance sheet through active debt management, including significant repayments on revolving credit facilities, preserving credit capacity for future fleet growth - In Q1 2025, the company repaid $102 million on its revolving credit facilities, including $70 million related to the vessel swap timing[14] - An additional $36 million was repaid on revolving credit facilities in April 2025[15] Shareholder Returns Dividends and Share Repurchases The company demonstrates a strong commitment to shareholder returns through consistent dividend declarations, including a combined Q1 2025 dividend, and maintains an active share repurchase authorization Q1 2025 Dividend Declaration | Dividend Type | Amount per Share | | :--- | :--- | | Regular Quarterly | $0.12 | | Supplemental | $0.48 | | Total Combined | $0.60 | | Record Date | June 12, 2025 | | Payment Date | June 26, 2025 | - In March 2025, the company paid a combined dividend of $0.70 per share[16] - Over the last twelve months, total combined dividends paid were $4.00 per share, yielding close to 10% based on the average share price over the period[17] - The company has $50 million remaining under its share repurchase authorization, which expires at the end of 2025[19] Consolidated Financial Statements Consolidated Statements of Operations The company reported a significant year-over-year decrease in Q1 2025 total shipping revenues and net income, primarily driven by lower pool revenues, partially offset by a gain on vessel disposals Consolidated Statements of Operations (Unaudited, $ in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Total Shipping Revenues | $183,394 | $274,401 | | Total operating expenses | $124,221 | $119,978 | | Income from vessel operations | $59,173 | $154,423 | | Interest expense | ($11,452) | ($12,887) | | Net income | $49,565 | $144,490 | | Diluted net income per share | $1.00 | $2.92 | Consolidated Balance Sheets As of March 31, 2025, the company's balance sheet reflects a decrease in total assets and liabilities, primarily due to reduced long-term debt, while total equity slightly increased Consolidated Balance Sheets Summary (Unaudited, $ in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $132,769 | $157,506 | | Total Current Assets | $326,614 | $376,323 | | Vessels and other property, net | $2,003,081 | $2,050,211 | | Total Assets | $2,542,397 | $2,636,397 | | LIABILITIES AND EQUITY | | | | Total Current Liabilities | $118,441 | $130,935 | | Long-term debt | $544,730 | $638,353 | | Total Liabilities | $673,548 | $780,349 | | Total Equity | $1,868,849 | $1,856,048 | | Total Liabilities and Equity | $2,542,397 | $2,636,397 | Consolidated Statements of Cash Flows In Q1 2025, net cash provided by operating activities decreased year-over-year, while investing activities provided cash primarily from vessel disposals, and financing activities used cash for debt repayments and dividends, resulting in a net cash decrease Consolidated Statements of Cash Flows Summary (Unaudited, $ in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Net cash provided by operating activities | $69,947 | $156,442 | | Net cash provided by/(used in) investing activities | $36,915 | ($42,903) | | Net cash used in financing activities | ($131,599) | ($100,798) | | Net (decrease)/increase in cash | ($24,737) | $12,741 | | Cash and cash equivalents at end of period | $132,769 | $139,501 | Supplemental Information TCE Rates and Fleet Information The report details Time Charter Equivalent (TCE) rates, which were generally lower in Q1 2025, and provides an overview of the company's total fleet composition as of March 31, 2025, including operating vessels and newbuilds Q1 2025 Total Average TCE Rate vs. Q1 2024 | Segment | Q1 2025 Total Avg. TCE | Q1 2024 Total Avg. TCE | | :--- | :--- | :--- | | VLCC | ~$34,800 | ~$44,700 | | Suezmax | ~$30,700 | ~$44,700 | | MR | ~$21,500 | ~$38,000 | Fleet Composition as of March 31, 2025 | Fleet Type | Crude Tankers | Product Carriers | Total Vessels | | :--- | :--- | :--- | :--- | | Operating Fleet | 28 | 50 | 78 | | Newbuild Fleet | 0 | 6 (LR1) | 6 | | Total Fleet | 28 | 56 | 84 | Reconciliation to Non-GAAP Financial Information The company provides reconciliations of non-GAAP financial measures, including adjusted net income and adjusted EBITDA, to their most comparable GAAP figures for Q1 2025, primarily adjusting for gains on vessel disposals Reconciliation of Net Income to Adjusted Net Income (Q1 2025, $ in thousands) | | Amount | | :--- | :--- | | Net income | $49,565 | | Gain on disposal of vessels and other assets, net | ($10,021) | | Adjusted net income | $39,544 | Reconciliation of Net Income to Adjusted EBITDA (Q1 2025, $ in thousands) | | Amount | | :--- | :--- | | Net income | $49,565 | | Interest expense | $11,452 | | Depreciation and amortization | $39,705 | | EBITDA | $100,722 | | Gain on disposal of vessels and other assets, net | ($10,021) | | Adjusted EBITDA | $90,701 |