International Seaways(US:INSW)2025-11-06 13:06Revenue and Market Performance - For the three and nine months ended September 30, 2025, the Company derived 52% and 51% of its TCE revenues from the Product Carriers segment, compared to 55% and 54% for the same periods in 2024[121]. - Approximately 81% of total TCE revenues for the three and nine months ended September 30, 2025, were derived from the spot market, down from 84% and 87% for the same periods in 2024[126]. - TCE revenues decreased by $27.2 million, or 12%, to $192.5 million in Q3 2025 from $219.7 million in Q3 2024, primarily due to lower average daily rates and vessel sales[140]. - For the first nine months of 2025, TCE revenues for crude tankers decreased by $67.1 million, or 20%, to $276.5 million from $343.6 million in the same period of 2024[157]. - TCE revenues for the Product Carriers segment decreased by $21.4 million, or 18%, to $99.5 million in Q3 2025 from $120.9 million in Q3 2024[165]. - For the first nine months of 2025, TCE revenues for the Product Carriers segment decreased by $115.7 million, or 29%, to $283.1 million from $398.8 million in the same period of 2024[168]. Fleet and Operational Metrics - As of September 30, 2025, the Company's operating fleet consisted of 71 vessels, totaling 8.2 million deadweight tons, with five newbuilds scheduled for delivery, increasing the fleet to 76 vessels[122]. - In Q3 2025, the tanker fleet increased by 5.1 million dwt, with the crude fleet growing by 3.2 million dwt, including increases of 0.6 million dwt in VLCCs, 1.4 million dwt in Suezmaxes, and 1.2 million dwt in Aframaxes[134]. - The average number of owned vessels decreased from 21.0 in 2024 to 19.0 in Q3 2025[145]. - The average number of owned vessels decreased to 40.2 in Q3 2025 from 41.2 in Q3 2024[160]. - The crude tanker orderbook decreased by 1.2 million dwt in Q3 2025, while the total tanker orderbook increased by 10.2 million dwt year-over-year[135]. Financial Performance - Income from vessel operations fell by $22.3 million to $78.7 million in Q3 2025, down from $101.0 million in Q3 2024, mainly due to lower TCE revenues[138]. - The company declared total dividends of $34.5 million, $29.6 million, and $38.0 million for the first three quarters of 2025, with a regular quarterly dividend of $0.12 per share and a supplemental dividend of $0.74 per share declared on November 5, 2025[195]. - For the three months ended September 30, 2025, net income was $70.5 million, a decrease of 23% compared to $91.7 million in the same period of 2024[184]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $299.9 million, down 38.6% from $488.5 million in the same period of 2024[184]. Expenses and Liabilities - Vessel expenses decreased by $4.4 million to $29.8 million in Q3 2025, attributed to the sale of two VLCCs[153]. - Vessel expenses increased by $4.1 million to $112.0 million in the first nine months of 2025 compared to $107.9 million in the same period of 2024[169]. - General and administrative expenses decreased by $1.6 million to $11.8 million in Q3 2025 from $13.4 million in Q3 2024[170]. - Interest expense decreased to $9.6 million in Q3 2025 from $12.5 million in Q3 2024, reflecting a reduction in the average outstanding principal balance[176]. - Total debt outstanding as of September 30, 2025, was $792.0 million, with a net debt to capital ratio of 16.4%, down from 22.2% at December 31, 2024[192]. Future Outlook and Commitments - Future minimum revenues expected from non-cancelable time charters as of September 30, 2025, total $229.2 million, with $31.9 million in 2025 and $82.8 million in 2026[126]. - The company has contractual commitments for the construction of five dual-fuel ready LR1s and various performance efficiency devices, with total long-term contractual obligations amounting to $1.2 billion as of September 30, 2025[203]. - The company executed a credit agreement for a 12-year term loan facility of up to $239.7 million to finance the acquisition of six LR1 newbuildings[200]. - The company plans to use net proceeds from the $250 million 2030 Bonds to retire higher-cost debt and for general corporate purposes[200]. - The company aims to pursue a disciplined capital allocation strategy focusing on fleet renewal, incremental debt reduction, and returns to shareholders[202]. Market Conditions - Global oil consumption for Q3 2025 is estimated at 104.8 million barrels per day, a 0.7% increase from Q3 2024, with 2025's total expected to be 103.8 million b/d[128]. - OPEC crude oil production averaged 27.9 million b/d in Q3 2025, an increase of 1.4 million b/d from Q3 2024[129]. - U.S. crude oil production reached 13.6 million b/d in Q3 2025, reflecting a 3.3% increase from Q3 2024[131]. - OECD commercial crude inventories decreased by 1.0%, or 13 million barrels, in Q3 2025 compared to Q2 2025[133]. Legal and Administrative Matters - The company expects to incur one-time legal and administrative expenses of between $3 million and $5 million in 2025 related to the redomiciliation process[179]. - The company commenced the process of changing the domicile of its vessel-owning subsidiaries from the Marshall Islands and Liberia to Bermuda, expected to be completed by the end of Q4 2025[178]. Risk Management - The Company operates in a highly cyclical industry, with revenues sensitive to supply and demand patterns for its vessels[123]. - The Company emphasizes a vessel employment strategy that balances spot and long-term charters to optimize economic performance[123]. - The Company manages market risk from interest rate changes through derivative financial instruments, including interest rate swaps and caps[206].