International Seaways continues to roll with the dividends, while nearly doubling the cash available for buybacks.
The New York tanker owner on Wednesday announced it was paying shareholders a total of $1.42 per share next month, a $1.30 per share supplemental dividend on top of the regular $0.12 per share quarterly dividend.
It also boosted the share buyback authorisation from $26m to $50m.
“We generated strong earnings for the fifth consecutive quarter, built on our track record of returning substantial capital to shareholders, and took steps to further enhance our balance sheet during the second quarter,” chief executive Lois Zabrocky said.
Zabrocky noted the company had paid $190m back to shareholders in the first half of the year, including 366,482 shares at an average price of $38.03 each and a $1.62 total dividend in June.
The company also prepaid roughly 75m in outstanding debt, a combination of $46m for two sale-and-leaseback deals and $29m to unencumber a 2017-built suezmax put up as collateral on a $750m credit facility.
For the second quarter, International Seaways reported a $154m profit, or $3.11 on a per share basis, up from a $69m profit for the same period last year.
The improved bottom line came on the back of improved rates across crude tanker asset classes and richer LR1 earnings on the product tanker side.
It said its VLCCs earned $52,300 per day in the second quarter, while its suezmax fleet brought in $61,300 per day and its aframaxes $53,500 per day. All were improvements from the $16,400 per day VLCC earnings seen last year, along with the $23,700 per day for suezmaxes and the $34,100 per day for aframaxes.
LR1s earned $63,600 per day, up from $25,900 per day for the second quarter of 2022. MRs, though, dropped slightly, to $28,300 per day from $30,500 per day.
The jump in rates pushed revenue to $292m from $188m year-over-year.
Moderating rates
So far in the third quarter, tanker rates have ticked downward.
The company said it has booked 53% of its VLCC spot days at $44,000 per day and 43% of its suezmax spot days at $52,000 per day.
Just over half its aframax days have been booked at $41,600 per day, while its LR1s had 46% of days booked at $62,700 per day and its MRs at $24,400 per day.
All five figures — bookings Zabrocky described as “healthy” — represent drops from the second quarter bookings.
She said she remains confident in the market moving forward with attractive supply and demand fundamentls and Russian oil displacement boosts tonne-mile demand and tanker utilisation.
“Economic activity has remained strong, and oil demand forecasts signal a pickup in the second half of the year,” Zabrocky said.
“These factors, combined with an historically low orderbook and an ageing global fleet, drive our expectation for strong tanker earnings for the foreseeable future.”
Heading to the yard
The company also confirmed a TradeWinds report that it had inked a deal for two scrubber-fitted, dual-fueled LR1 newbuildings at South Korean yard K Shipbuilding.
It said the it would be paying a total of $115m for the two ships and expects delivery in 2025.
Once in International Seaways’ posesion, the ships will enter its partially-owned Panamax International Pool.
The duo will be the company’s youngest LR1s, as the seven in its fleet are all at least 12 years old.
