International Seaways(INSW) - 2025 Q1 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements Q1 2025 net income significantly decreased to $49.6 million from $144.5 million, primarily due to lower shipping revenues Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $132,769 | $157,506 | | Total Current Assets | $326,614 | $376,323 | | Total Assets | $2,542,397 | $2,636,397 | | Liabilities & Equity | | | | Total Current Liabilities | $118,441 | $130,935 | | Total Liabilities | $673,548 | $780,349 | | Total Equity | $1,868,849 | $1,856,048 | | Total Liabilities and Equity | $2,542,397 | $2,636,397 | Condensed Consolidated Statements of Operations Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Shipping Revenues | $183,394 | $274,401 | | Income from vessel operations | $59,173 | $154,423 | | Net income | $49,565 | $144,490 | | Basic net income per share | $1.00 | $2.95 | | Diluted net income per share | $1.00 | $2.92 | - The company recognized a net gain on the disposal of vessels and other assets of $10.0 million in Q1 2025, compared to a minimal gain in Q1 2024[8] Condensed Consolidated Statements of Cash Flows Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 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 | - Investing activities in Q1 2025 were positive due to $115.3 million in proceeds from vessel disposals, which more than offset the $83.0 million spent on vessel acquisitions and construction[10] - Financing activities in Q1 2025 included net repayments on revolving credit facilities of $81.6 million and cash dividend payments of $34.5 million[10] Notes to Condensed Consolidated Financial Statements - As of March 31, 2025, the company's operating fleet consisted of 78 vessels; additionally, six LR1 newbuilds are scheduled for delivery between H2 2025 and Q3 2026, bringing the total fleet to 84 vessels[12] - The company has two reportable segments: Crude Tankers and Product Carriers; for Q1 2025, Crude Tankers generated $88.0 million in shipping revenues, while Product Carriers generated $95.4 million[27][28] - The company has remaining commitments of $314.6 million for the construction of six LR1 newbuilds as of March 31, 2025[31] - In Q1 2025, the company declared a regular quarterly dividend of $0.12 per share and a supplemental dividend of $0.58 per share, totaling $34.5 million[60] - As of March 31, 2025, the company had future minimum contracted revenues of $282.8 million from non-cancelable time charters[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Q1 2025 income from vessel operations significantly decreased to $59.2 million due to a 34% drop in Time Charter Equivalent (TCE) revenues Operations and Oil Tanker Markets - Global oil consumption for Q1 2025 is estimated at 102.4 million b/d, up 1.2% YoY; global oil production was 102.5 million b/d, an increase of 1.1 million b/d from Q1 2024[109][110] - The tanker fleet (vessels >10,000 dwt) increased by a net 2.8 million dwt in Q1 2025; the crude fleet grew by 1.9 million dwt and the product carrier fleet by 0.9 million dwt[113] - Tanker rates remained steady in Q1 2025 compared to Q4 2024 and are significantly above cash breakeven levels, though global trade turmoil creates uncertainty[115] Results from Vessel Operations - Income from vessel operations decreased by $95.3 million to $59.2 million in Q1 2025 from Q1 2024, mainly due to lower TCE revenues, partially offset by a $10.0 million gain on vessel sales[119] - TCE revenues fell by $92.6 million (34%) to $178.3 million in Q1 2025, driven by lower average daily rates across all fleet sectors[120] Crude Tankers Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | TCE revenues (in thousands) | $84,629 | $123,962 | | Adjusted income from vessel operations (in thousands) | $34,673 | $69,892 | | Average daily TCE rate | $34,528 | $46,991 | Product Carriers Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | TCE revenues (in thousands) | $93,713 | $146,966 | | Adjusted income from vessel operations (in thousands) | $27,791 | $96,854 | | Average daily TCE rate | $22,061 | $39,807 | Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $49,565 | $144,490 | | EBITDA | $100,722 | $191,530 | | Adjusted EBITDA | $90,701 | $191,479 | Liquidity and Sources of Capital - As of March 31, 2025, total liquidity was $673.2 million, comprising $132.8 million in cash and $540.4 million in undrawn revolver capacity[151] - Working capital decreased to $208.2 million at March 31, 2025, from $245.4 million at December 31, 2024[152] - Key capital allocation activities in 2025 include completing vessel exchange transactions, tendering notice to exercise purchase options on six VLCCs, and repaying $81.6 million net on the $500 million Revolving Credit Facility[162] Summary of Long-Term Contractual Obligations as of March 31, 2025 (in thousands) | Obligation Type | 2025 | 2026 | Beyond 2026 | Total | | :--- | :--- | :--- | :--- | :--- | | Debt & Lease Financing | $77,639 | $107,112 | $494,143 | $678,894 | | Operating Leases | $13,267 | $3,860 | $8,005 | $25,132 | | Vessel Commitments | $128,796 | $188,480 | $0 | $317,276 | | Total | $219,702 | $299,452 | $502,148 | $1,021,302 | Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[173] - No changes in internal control over financial reporting occurred in Q1 2025 that materially affected, or are reasonably likely to materially affect, these controls[174] Part II - Other Information Item 1. Legal Proceedings A commercial dispute from 2023 resulted in a favorable arbitration ruling for the company in March 2025, subject to appeal - In a commercial dispute from 2023, an arbitration tribunal ruled in the company's favor in March 2025, dismissing claims against the company and awarding it monetary damages; the ruling is subject to appeal[92] Item 1A. Risk Factors A new risk factor highlights the potential adverse impact of a U.S. proposal to impose fees on Chinese-built vessels, affecting company operations - A new risk factor was added concerning a U.S. proposal to charge fees on vessels entering U.S. ports if they were constructed in China or are owned/operated by a Chinese entity, starting October 2025[178] - The company owns 14 vessels constructed in China and has other chartering arrangements that could be affected by this proposal, the full impact of which is currently being evaluated[178][180] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company made no stock repurchases in Q1 2025, but withheld shares to cover tax liabilities on vested restricted stock units - No stock repurchases were made under the formal program in Q1 2025; shares were withheld from employees to cover tax withholding liabilities on vested equity awards[181][63]