US-based tanker shipping firm International Seaways (INSW) is eager to avail of the attractive market so as to modernize its fleet with new fleet additions.
According to Lois K. Zabrocky, International Seaways’ President and CEO, there are compelling opportunities to grow and renew the company’s fleet. However, Zabrocky did not reveal whether she was interested in second-hand tonnage or planning to order newbuidings.
The announcement comes as INSW reports its first quarterly profit following the separation from Overseas Shipholding Group (OSG) in late-November 2016. Following the spin-off, INSW continued operating as an independent public company.
Driven by lower time charter equivalent (TCE) revenues, INSW recorded a net income of USD 18.1 million in the first quarter of this year, compared to a net income of USD 59.9 million posted in the same period last year.
During the quarter, consolidated TCE revenues amounted to USD 84.1 million, against USD 124.7 million in 1Q 2016.
TCE revenues for the crude tankers segment stood at 56 million for the quarter, compared to USD 87.4 million in the first quarter of 2016. The decrease was primarily due to lower average blended rates in the VLCC, Aframax and Panamax sectors and fewer revenue days in these sectors, according to the company.
Furthermore, TCE revenues for the product carriers segment were USD 28.1 million for the quarter, against USD 37.3 million in the same period of 2016. The decline was mainly due to a drop in average daily blended rates earned by the MR, LR1 and LR2 fleets.
“We are pleased with International Seaways’ first full quarter as an independent public company and our progress implementing the company’s strategy,” Zabrocky commented.
On May 2, INSW’s board of directors authorized a share repurchase plan of up to USD 30 million of the company’s common stock. The company said that the amount and timing of any repurchases made under the program will depend on a variety of factors, including market conditions and available liquidity.
“During the first quarter, our … fleet of crude and product tankers performed well, enabling the company to generate solid cash flow in a volatile tanker market. With our contracted cash flows, low breakeven levels, and spot market upside, we remain well positioned to both successfully operate in the current tanker cycle and take advantage of a market recovery,” Zabrocky added.
“We are guided by a disciplined capital allocation strategy and are pleased with the board’s authorization of a share repurchase program, which we intend to act on opportunistically,” Zabrocky concluded.
As of March 31, 2017, INSW’s fleet comprised a total of 55 vessels.