International Seaways(US:INSW)2022-08-09 12:01Fleet and Operations - As of June 30, 2022, the company's operating fleet consisted of 75 vessels aggregating 8.2 million deadweight tons (dwt) with three dual-fuel LNG-powered VLCC newbuilds scheduled for delivery in Q1 2023, bringing the total to 78 vessels[129]. - The tanker fleet over 10,000 dwt increased by 4.8 million dwt in Q2 2022, with VLCCs growing by 3.4 million dwt[139]. - The total tanker orderbook decreased by 20.0 million dwt year-over-year, with all sectors seeing declines[140]. - The company is focused on optimizing its vessel employment strategy to achieve the best mix of spot and long-term charters to enhance revenue generation[130]. Revenue and Financial Performance - For the three and six months ended June 30, 2022, the company derived 32% and 34% of TCE revenues from the Crude Tankers segment, compared to 70% and 75% for the same periods in 2021[128]. - Approximately 96% and 95% of total TCE revenues were derived from the spot market for the three and six months ended June 30, 2022, compared to 75% and 72% for the same periods in 2021[130]. - TCE revenues in Q2 2022 rose by $140.8 million, or 315%, to $185.5 million from $44.7 million in Q2 2021, driven by higher average daily rates across the fleet[147]. - For the first half of 2022, TCE revenues for the Crude Tankers segment increased by $28.9 million, or 43%, to $95.9 million from $67.0 million in the first half of 2021[162]. - TCE revenues for the Product Carriers segment in Q2 2022 were $126.1 million, up from $13.6 million in Q2 2021[165]. - Adjusted income from vessel operations for the Product Carriers segment in Q2 2022 was $75.5 million, compared to $975,000 in Q2 2021[165]. - EBITDA for Q2 2022 was $108.9 million, compared to $5.3 million in Q2 2021, reflecting significant operational improvements[184]. - Adjusted EBITDA for the first half of 2022 was $137.7 million, up from $20.5 million in the same period of 2021[184]. Expenses and Costs - Vessel expenses in Q2 2022 rose by $3.5 million to $24.6 million from $21.1 million in Q2 2021, driven by the vessels acquired in the Merger[158]. - Vessel expenses for the first half of 2022 increased by $6.9 million to $47.8 million from $40.9 million in the first half of 2021[163]. - Vessel expenses rose by $28.2 million to $35.0 million in Q2 2022 from $6.8 million in Q2 2021, primarily due to fleet additions from the Merger[172]. - General and administrative expenses increased by $4.0 million to $10.8 million in Q2 2022 from $6.8 million in Q2 2021, driven by increased staffing and legal costs[175]. Market and Economic Conditions - Global oil consumption for Q2 2022 was estimated at 97.8 million barrels per day (b/d), up 1.7% from Q2 2021, with a forecast of 99.2 million b/d for 2022[134]. - OPEC crude oil production averaged 28.6 million b/d in Q2 2022, an increase of 3.1 million b/d from Q2 2021[135]. - U.S. crude oil production in Q2 2022 increased by 2.3% to 11.6 million b/d compared to Q1 2022 and by 3.5% from Q2 2021[135]. - The company anticipates that the ongoing pandemic and geopolitical tensions, particularly the war in Ukraine, will continue to impact its business operations and financial results[144]. Debt and Liquidity - Total debt outstanding as of June 30, 2022, was $1,073.7 million, with a net debt to total capitalization ratio of 40.7%, down from 46.2% at December 31, 2021[192]. - Total liquidity on a consolidated basis was $451.7 million, consisting of $231.7 million in cash and $220.0 million of undrawn revolver capacity[191]. - The Company executed liquidity-enhancing initiatives that diversified financing sources and spread debt maturities between 2025 and 2031, positioning it to navigate weaker rate periods[210]. - The Company has commitments for the purchase and installation of ballast water treatment systems on 14 vessels, along with the construction of three dual-fuel LNG-powered VLCCs[218]. Shareholder Returns - The company declared a regular quarterly cash dividend of $0.12 per share on June 7, 2022, totaling $6.0 million, following a previous dividend of $0.06 per share[195]. - The company authorized an increase in the share repurchase program to $60.0 million from $33.3 million in August 2022[205]. Interest Rate Management - The Company utilizes interest rate swaps to manage interest rate risk exposure associated with changes in SOFR interest rate payments on its credit facilities[215]. - The effective three-month LIBOR rate as of June 30, 2022, was 2.25% for the Macquarie Credit Facility and 1.40% for the ING Credit Facility[218].