International Seaways has big cash reserves and is looking to use it to pay down debt or pay off shareholders.
On its second quarter earnings call Thursday, the New York-traded tanker owner said it was comfortable with its 47-ship fleet ahead of the expected IMO 2020 tanker rally and would look to deleverage, buy back shares or pay out dividends.
"We've already bought enough ships to be well-positioned," said chief financial officer Jeffrey Pribor. "Now we can turn to other types of capital allocations that are accretive."
At quarter end, International Seaways had $150m in cash and $200m in liquidity, including a $50m undrawn revolver and no debt coming due until 2022 at the earliest. On 31 July, the company made a $10m payment on its 2017 credit facility.
The company said it was the most cash it had since being spun off from Overseas Shipholding Group in 2016.
Pribor said the company generates plenty of liquidity from operations and netted cash from selling two older tankers.
Paying down debt, he said, was an attractive option, as it's "flexible".
"You can always relever if you want to," Pribor said.
For the second quarter, International Seaways posted a $16.5m loss, or a $0.51 loss per share when adjusting for vessel sales.
The performance was deeper than analyst forecasts of $0.44 loss per share.
Despite the miss, International Seaways shares were trading up $0.24, or 1.54%, to $15.85 in midday trading Thursday.
