Overseas Shipholding Group (OSG), a US-flag tanker player, has returned to profit and is optimistic about further upside for its shareholders and balance sheet.
“The business environment for OSG has shifted away from the defensive posture that has characterised much of the past three years,” chief executive Sam Norton said in an earnings release on Thursday.
The Tampa-based owner and operator of 21 tankers reported net income of $10.1m for the fourth quarter of 2022, revering a net loss of $3.7m in the same period of 2021.
That performance brought full-year net income to $26.6m from a net loss of $46.3m in 2021.
The turnaround was underpinned by a 30% increase in shipping revenue, to $466.8m.
“Improving market conditions have resulted in OSG achieving more stability in its financial profile and greater visibility of forward cash flows to an extent not seen for many years,” Norton said.
“We can now look forward to evaluating real opportunities to extend and expand the cash-generating capabilities of our unique franchise while continuing to consider means to utilise surplus cash flow to reduce leverage and drive improving share price performance.”
In its earnings statement, the New York-listed company confirmed the redelivery in December of three tankers it had leased from American Shipping Co.
However, OSG did not discuss the fact that American Shipping filed a $4m lawsuit against it over the redelivery of the 46,900-dwt Overseas Los Angeles (built 2017) and Overseas New York (built 2008).
The overwhelming part of the claim stems from the Overseas Los Angeles.
The spat did not prevent OSG from exercising an option in December to extend the terms of a further six vessels chartered in from American Shipping, for an additional three years to December 2026.
