- Quarterly EPS: Reported earnings per share of $0.72, missing the estimated EPS of $1.24.
- Quarterly Revenue: Achieved $195 million in shipping revenues, surpassing the estimated revenue of $186.16 million.
- Net Income: Fourth quarter net income stood at $36 million, a decrease from $132 million in the same quarter of the previous year.
- Annual Net Income: Full year 2024 net income was $417 million, or $8.38 per diluted share, down from $556 million, or $11.25 per diluted share, in 2023.
- Adjusted EBITDA: Fourth quarter adjusted EBITDA was $95 million, compared to $159 million in the fourth quarter of 2023.
- Liquidity Position: Total liquidity reached approximately $632 million as of December 31, 2024, including $157 million in cash and $475 million in undrawn revolving credit capacity.
- Dividends: Declared a combined dividend of $0.70 per share for the first quarter of 2025, representing over 75% of adjusted net income for the second consecutive quarter.
On February 27, 2025, International Seaways Inc (INSW, Financial) released its 8-K filing, detailing its financial performance for the fourth quarter and full year of 2024. As a major player in the energy transportation sector, International Seaways Inc owns and operates a diverse fleet of oceangoing vessels, including ULCC, VLCC, Suezmax, Aframax, and Panamax crude tankers, as well as LR1, LR2, and MR product carriers.
Financial Performance and Challenges
For the fourth quarter of 2024, International Seaways Inc reported a net income of $36 million, or $0.72 per diluted share, falling short of the analyst estimate of $1.24 per share. The company's shipping revenues for the quarter were $195 million, which exceeded the estimated revenue of $186.16 million. However, the net income for the full year was $417 million, or $8.38 per diluted share, which also missed the annual estimate of $8.93 per share.
The decrease in quarterly net income compared to the previous year was primarily due to lower TCE revenues, increased depreciation and amortization, and a non-cash impairment charge related to fleet optimization. These challenges highlight the volatility in spot rates and the impact of fleet changes on financial performance.
Key Financial Achievements
Despite the challenges, International Seaways Inc achieved significant financial milestones. The company reported an adjusted EBITDA of $95 million for the fourth quarter and $583 million for the full year. The robust balance sheet, with total liquidity of approximately $632 million, including $157 million in cash and $475 million in undrawn revolving credit capacity, underscores the company's financial resilience.
International Seaways Inc's strategic fleet optimization program, which involved a vessel swap and the acquisition of modern MR vessels, is a testament to its commitment to maintaining a competitive and efficient fleet. The company also returned over $300 million to shareholders through dividends, reflecting a 12% yield on average market capitalization.
Income Statement and Balance Sheet Insights
For the fourth quarter, the company's shipping revenues decreased from $251 million in 2023 to $195 million in 2024. The Crude Tankers segment reported shipping revenues of $96 million, while the Product Carriers segment reported $99 million. The decline in revenues was attributed to lower spot earnings across various vessel classes.
On the balance sheet front, International Seaways Inc enhanced its capital structure by converting term loans into revolving capacity, saving over $80 million annually in mandatory debt repayments. The company's net-loan-to-value ratio stood at an industry-low of 15.5%, positioning it well for future growth and shareholder returns.
Strategic Commentary
“We delivered another strong year of financial results and took advantage of a solid rate environment to further advance Seaways’ balanced capital allocation strategy,” said Lois K. Zabrocky, International Seaways President and CEO. “Looking ahead, we are optimistic about the market’s direction, supported by favorable supply-demand dynamics, higher ton-mile demand and continued disruptions due to geopolitical uncertainty.”
Jeff Pribor, the Company’s CFO stated, “With total liquidity of over $630 million and one of the lowest net-loan-to-value ratios in the industry at 15.5%, we believe we are ideally positioned to build on our track record of balanced and disciplined capital allocation, investing in the fleet opportunistically, maintaining a healthy balance sheet and continuing to return capital to shareholders.”
Analysis and Outlook
International Seaways Inc's performance in 2024 reflects both the challenges and opportunities in the oil and gas transportation industry. The company's strategic initiatives, including fleet optimization and capital structure enhancements, are crucial for maintaining competitiveness in a volatile market. While the earnings fell short of analyst estimates, the company's strong liquidity position and shareholder returns highlight its commitment to long-term value creation.
As the company continues to navigate market dynamics, its focus on disciplined growth and fleet renewal will be key to sustaining its financial health and delivering shareholder value in the coming years.
Explore the complete 8-K earnings release (here) from International Seaways Inc for further details.
