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International Seaways Inc . (NYSE:INSW) reported solid first-quarter 2025 results during its earnings presentation on May 8, 2025, highlighting strong financial performance, strategic fleet optimization, and favorable tanker market fundamentals that position the company for continued success.
Quarterly Performance Highlights
International Seaways delivered robust financial results for Q1 2025, reporting net income of $50 million ($1.00 per share) and adjusted net income of $40 million ($0.80 per share). The company generated adjusted EBITDA of $90.7 million and total TCE revenues of $183 million, with the majority ($178 million) coming from its crude tanker fleet.
As shown in the following quarterly results chart, the company has maintained consistent profitability, though Q1 2025 shows a slight moderation compared to previous quarters:
Spot rates remained strong across vessel categories in Q1 2025, with VLCCs earning $33,500 per day, Suezmax vessels at $30,900 per day, Aframax at $25,400 per day, LR1 at $27,400 per day, and MR tankers at $21,400 per day. Looking ahead to Q2 2025, the company has already fixed approximately 45% of its available days at an average rate of $31,200 per day.
The company’s commitment to shareholder returns continued with a declared dividend of $0.60 per share, representing a 75% payout ratio of Q1 2025 adjusted net income. This marks the third consecutive quarter with a payout ratio of 75% or higher.
Strategic Initiatives
International Seaways executed a strategic fleet optimization initiative during the quarter, exchanging two older VLCCs (14+ years) plus $3 million cash for three newer MR tankers (less than 10 years old). Two MRs were delivered and two VLCC sales closed in Q1 2025, generating net proceeds of $50 million. The company’s strategic focus on fleet renewal is evident in these transactions, which help maintain a modern, efficient fleet.
As shown in the following slide highlighting the company’s quarterly achievements and strategic developments:
The company maintains a healthy balance sheet with total liquidity of $673 million, comprising $133 million in cash and $540 million in undrawn revolver capacity. Gross debt stands at $601 million with the earliest maturity not until 2030, and the company’s net loan-to-value ratio is a conservative 15%. Additionally, International Seaways has 34 unencumbered vessels, providing further financial flexibility.
Detailed Financial Analysis
The company’s cash flow remained strong in Q1 2025, with free cash flow of $56 million. This was driven by adjusted EBITDA of $157 million, partially offset by debt service, drydock and capex expenses, and working capital changes. The company’s vessel sales and purchases contributed $48 million to cash flow during the quarter.
The following cash flow rollforward illustrates the movement of funds during the quarter:
International Seaways’ balance sheet as of March 31, 2025, shows total assets of $2.54 billion, with vessels valued at $2.14 billion at cost (market value estimated at $3.1 billion). Total equity stands at $1.87 billion, reflecting the company’s strong financial position.
The company’s debt profile is well-structured, with a total debt balance of $601 million and a weighted average interest rate of 6.17%. The debt facilities include revolving credit facilities and sale-leaseback arrangements, as shown in the following financial position overview:
Market Context and Industry Outlook
The tanker market fundamentals remain favorable for International Seaways, with several key demand and supply drivers supporting the outlook. On the demand side, OPEC+ is increasing production by over 400,000 barrels per day for May and June, gradually rising to a 2.2 million barrel per day increase through the end of 2026. Non-OPEC production is also increasing by approximately 1.2 million barrels per day year-over-year.
Oil demand is forecasted to grow by 1 million barrels per day in 2025, aligned with historical compound annual growth rates, though recent forecasts have shown some decline. Geopolitical pressures continue to create trade inefficiencies that benefit tanker ton-miles, as illustrated in the following market update:
On the supply side, the tanker orderbook stands at 14% of the current fleet, with deliveries spread over the next four years. However, this is insufficient to replace the 47% of the fleet that will be over 20 years old by the end of the delivery schedule. The average age of the tanker fleet is 13.9 years, compared to 9.4 years in May 2015, indicating an aging fleet that will require significant replacement.
Recycling volumes are rising, with Q1 2025 seeing the highest volume since Q2 2022. Environmental regulations may further increase potential removals from the commercial fleet or decrease utilization as vessels slow down to reduce emissions.
Forward-Looking Statements
Looking ahead to Q2 2025, International Seaways has provided guidance on various financial metrics. The company expects time charter-out revenue (excluding profit share) of $32-34 million for Q2 2025 and $119-121 million for the full year 2025. Vessel expenses are projected at $38-40 million for Q2 and $155-160 million for the full year.
The company’s forward estimated spot break-even rate for the next 12 months is approximately $13,485 per day, providing a comfortable margin given current spot rates. The Q2 2025 guidance also includes estimated off-hire days of 410.
As shown in the following forward-looking guidance slide, the company has provided detailed projections for Q2 and full-year 2025:
International Seaways continues to position itself as a disciplined capital allocator, with a focus on shareholder returns, de-leveraging, and fleet renewal. The company has delivered a total shareholder return of over 300% since its inception, representing an 18% compound annual growth rate.
With its strong financial position, strategic fleet management, and favorable market fundamentals, International Seaways appears well-positioned to continue delivering value to shareholders in the coming quarters.
Full presentation:
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