International Seaways Inc Reports Strong Annual Earnings and Enhanced Balance Sheet in 2023
Net Income: $556.4 million for the full year 2023, a significant increase from $387.9 million in 2022.
Diluted EPS: $11.25 per diluted share in 2023, up from $7.77 per share in the previous year.
Adjusted EBITDA: Reached $723.8 million for the full year 2023.
Liquidity: Total liquidity stood at approximately $601 million as of December 31, 2023.
Debt Prepayment: Prepaid nearly $300 million in debt in 2023, showcasing a strong balance sheet.
Dividends: Paid a combined $1.25 per share in December 2023 and declared a combined dividend of $1.32 per share to be paid in March 2024.
Fleet Optimization: Acquired six MRs and sold two older MRs, enhancing the fleet's efficiency and revenue potential.
On February 29, 2024, International Seaways Inc (NYSE:INSW) released its 8-K filing, announcing robust financial results for the fourth quarter and full year of 2023. The company, a leading global provider of energy transportation services for crude oil and petroleum products, reported a record net income of $556.4 million for the year, marking a substantial increase from the previous year's $387.9 million. The diluted earnings per share (EPS) also rose to $11.25, compared to $7.77 in 2022.
International Seaways 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. The company's vessel operations are split into two segments: Crude Tankers and Product Carriers.
The company's performance in 2023 was particularly notable given the challenges faced by the tanker industry, including fluctuating oil prices and evolving global trade patterns. The strong earnings reflect the company's operational efficiency and strategic fleet optimization, which are crucial in a competitive oil and gas industry where margins can be significantly impacted by operational costs and market volatility.
International Seaways' financial achievements, such as the substantial debt prepayment and enhanced liquidity, are critical for maintaining a robust balance sheet and ensuring the company's ability to navigate the cyclical nature of the tanker market. These measures also provide the flexibility to capitalize on growth opportunities and withstand downturns.
The company's balance sheet was significantly strengthened in 2023, with total liquidity reaching approximately $601 million, including cash and short-term investments of $187 million and $414 million of undrawn revolving credit capacity. The net loan-to-value ratio of 17% as of December 31, 2023, is the lowest in the company's history, underscoring its financial resilience.
International Seaways also demonstrated its commitment to shareholder returns by paying over $320 million to shareholders in 2023 through dividends and share repurchases. The declared combined dividend of $1.32 per share for March 2024 represents 60% of adjusted net income for the fourth quarter, highlighting the company's robust cash generation and shareholder-friendly policies.
From an operational standpoint, the company's fleet optimization program continued to progress, with the acquisition of six MR tankers and the sale of two older vessels, enhancing the fleet's efficiency and revenue potential. The company also increased its contracted revenues to $354 million by entering into new time charter agreements.
Lois K. Zabrocky, International Seaways President and CEO, expressed confidence in the company's momentum and the sustainability of the current tanker market dynamics, driven by strong demand and a favorable supply environment. CFO Jeff Pribor emphasized the strength of the balance sheet and the company's proactive approach to de-leveraging, which has positioned it well for continued shareholder returns.
The financial tables included in the earnings report provide a detailed breakdown of the company's income statement, balance sheet, and cash flow statement. Key metrics such as shipping revenues, operating expenses, and net income are presented, offering investors a comprehensive view of the company's financial health.
In summary, International Seaways' earnings report for the fourth quarter and full year of 2023 showcases a company that has not only navigated a challenging market but has emerged stronger, with record earnings, a fortified balance sheet, and a clear commitment to delivering value to its shareholders.
Explore the complete 8-K earnings release (here) from International Seaways Inc for further details.
This article first appeared on GuruFocus.
