• Net Income: $36 million or $0.72 per diluted share for Q4 2024; adjusted net income of $45 million or $0.90 per diluted share.
• Adjusted EBITDA: $95 million for Q4 2024.
• Cash and Liquidity: $632 million total liquidity, including $157 million in cash and $475 million in revolving credit capacity.
• Debt: $695 million with a net loan to value ratio below 16%.
• Dividends: $5.77 per share in 2024, representing a 12% dividend yield; $0.70 dividend announced for March 2025.
• Share Repurchase: 500,000 shares repurchased for $25 million in 2024.
• Free Cash Flow: $78 million for Q4 2024, representing an annualized cash flow yield of over 17%.
• Lightering Business Revenue: Over $9 million in Q4 2024, contributing nearly $3 million of EBITDA.
• Spot Breakeven Rate: Approximately $13,700 per day.
• Fleet Renewal: Sold two oldest VLCCs and acquired three eco MRs built in 2015.
• Shareholder Returns: Over $300 million returned to shareholders in 2024.

• Warning! GuruFocus has detected 2 Warning Sign with PEB.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• International Seaways Inc (NYSE:INSW) reported a net income of $36 million for the fourth quarter, with an adjusted net income of $45 million, excluding losses on vessel sales.
• The company successfully modernized its fleet by swapping older VLCCs for newer eco MRs, enhancing fleet efficiency and reducing vessel age.
• INSW maintained a strong balance sheet with $632 million in total liquidity and a net loan to value ratio below 16%.
• The company returned over $300 million to shareholders in 2024, with a dividend yield of 12% and a payout ratio of about 77%.
• INSW's strategic fleet renewal and capital allocation approach position the company well for future growth and shareholder returns.

Negative Points

• Vessel expenses were higher than expected in the fourth quarter due to timing of stores, spares, and additional repairs and maintenance.
• General and administrative expenses increased due to one-off legal matters.
• The geopolitical tensions, such as the Israel-Hamas conflict and Russia-Ukraine situation, pose risks to tanker market stability.
• The MR rates showed some dislocation, with the US Gulf rates declining, although Asia rates are rising.
• The tanker order book increased in 2024, which could impact future market dynamics despite the current low relative size of the fleet.

Q & A Highlights

Q: Can you discuss your current charter-out strategy, especially for crude tankers, given the elevated charter market? A: Lois Zabrocky, President and CEO, explained that they currently have 14-time charters out of 78 vessels, with six new buildings arriving. Derek Solon, Chief Commercial Officer, added that they continuously evaluate time charters with the right partners, terms, and rates.

Q: How should we think about the dividend payout ratio going forward, especially if earnings fluctuate? A: Jeffrey Pribor, CFO, stated that they have gradually increased the payout ratio, reaching 77% recently. They aim for a minimum of 75% payout ratio, and the payout will adjust with net income changes.

Q: Regarding the VLCC and MR swap, is there a shift in focus away from VLCCs? A: Lois Zabrocky clarified that the focus is on reducing fleet age rather than deemphasizing VLCCs. The swap was an opportunity to shed older, inefficient ships and maintain a younger fleet.

Q: What is the outlook for Suezmaxes given the current geopolitical and market conditions? A: Lois Zabrocky noted that Suezmaxes have historically correlated with VLCCs. As geopolitical factors strengthen the market, Suezmaxes are expected to benefit alongside VLCCs.

Q: Could we see charters relaxing specification requirements due to the aging fleet and limited new builds? A: Lois Zabrocky mentioned that while there might be some flexibility on the margin, charters generally maintain high standards, especially for well-maintained vessels. However, older, inefficient ships are less likely to meet these standards.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.