International Seaways Slips into Red

US-based tanker shipping company International Seaways (INSW) suffered a full-year net loss of USD 18.2 million in 2016, compared to a net income of USD 173.2 million seen a year earlier. 

Time charter equivalent (TCE) revenues for 2016 were USD 385 million, a decrease of USD 90.7 million compared to 2015.

TCE revenues for the International Crude Tankers segment were USD 258.2 million for 2016, down by 15% compared with 2015. This decrease was primarily due to a decline in very large crude carrier (VLCC) and Aframax rates.

Additionally, TCE revenues for the International Product Carriers segment were USD 126.3 million for 2016, a drop of 26% compared with 2015. This was attributed to a decline in medium-range (MR) spot rates.

The company’s operating income for 2016 was USD 22.8 million, against an operating income of USD 221.9 million for 2015. The decrease reflects the impact of impairment charges, separation and transition costs and the decline in TCE revenues, partially offset by a decrease in general and administrative expenses during the year.

In late-November 2016, the separation of INSW from Overseas Shipholding Group (OSG) was completed. Following the spin-off, INSW continued operating as an independent public company.

During the fourth quarter of 2016, INSW received a letter of award related to a five-year contract for its FSO joint ventures. According to Lois K. Zabrocky, INSW’s President and CEO, the firm continues negotiations on this project.

In its outlook for 2017, Zabrocky said: “Looking forward, International Seaways has a diversified 55 vessel fleet positioned to optimize revenue through a balanced mix of contracted cash flows and spot market upside.”

“Our lean and scalable model and low break-evens along with our strong financial position allow us to navigate through the volatility in the tanker cycle while providing significant operating leverage to take advantage of a market recovery,” she added.

“While we expect the year ahead to present a number of challenges, I am confident in the solid foundation we have built and the measures we continue to take to create a platform for success,” Zabrocky concluded.

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