d’Amico International Shipping, an owner and operator of product tankers, made its second big dividend payment this year, encouraged by the rude health it sees its market in.
“We have strong confidence in the long-term fundamentals of the product tanker industry,” chief executive Paolo d’Amico said on Thursday after his company reported $48.9m net income in the third quarter.
This is an increase, both from the $45.7m earned in the second quarter of 2023 and from the $43.6m in the third quarter of 2022.
On the back of these results, the company announced an interim dividend of $20m, making good on a promise made earlier this year to turn buybacks and cash distributions into a new priority.
d’Amico International had previously made a $22m cash payout in April, compared with just $1.5m in dividends distributed for the full year of 2021 and $100,000 in 2020.
The company owns 26 LR1, MR and handysize tankers and operates 10 more chartered in on long-term, short-term or bareboat charters. d‘Amico International can grow further in the next months and years through a string of very attractively priced purchase options on several of its operated ships.
The benign outlook management has on its business means that the company might very well step up its dividend payments next year.
“Given our expectation of developments for the market next year, I think there is a good chance that the absolute number of dividends distributed next year could be higher,” chief financial officer Carlos Balestra di Mottola told analysts in a conference call.
Cool refinery runs
Chief executive officer Paolo d’Amico cited several favourable trends to justify this view.
“The ongoing shift of refinery capacity away from major consumption hubs like Europe, the USA and Australia will notably boost the ton-mile demand for product tankers,” d’Amico said in the earnings release.
“Also from a supply perspective, our industry appears to be in a healthy position.”
Dividends are not the only way the Milan-listed company uses to attract investors.
d’Amico International also bought back its own shares worth $6.7m between 1 January and 30 September this year. These buybacks have “momentarily stopped”, even though management “has room to do much more” under its authorisation programme, Balestra di Mottola said.
“The reason we stopped is... we don't want to overdo it and negatively affect the liquidity of our shares, since we already have a controlling shareholder with a very significant participation in the company,” he explained in the conference call.
d’Amico International, the last listed shipping company in its Italian home country, recently took steps to boost the visibility of its shares in the US.
As TradeWinds reported, the company has applied to trade on the OTCQX Best Market, which is managed by the OTC Markets Group. Admission is expected before the end of the year.
The stock is currently traded just over the counter in the US.
The move to trade on the OTCQX does not mean, however, that the company is actively contemplating a secondary listing in New York or anywhere else.
Balestra di Mottola said in July that the company was still not convinced that a secondary listing was “the right thing to do”. Asked by TradeWinds about the same issue again on Thursday, d’Amico said: “I am confirming what we said last time.”
