International Seaways has confirmed it agreed to sell 12 tankers in recent months while absorbing Diamond S Shipping’s 60-strong fleet.
The New York-listed outfit completed its all-stock merger with Diamond S in July to create one of the world’s largest tanker owners with assets across the crude and product spectrums.
On Monday, International Seaways said in a quarterly report that it had sold a 2002-built VLCC, 2002-built panamax and 2003-built panamax last quarter. The VLCC was delivered to its buyer earlier this quarter.
The company agreed to sell another two 2002-built panamaxes in July. They are scheduled to be delivered in the third and fourth quarters of this year.
In addition, International Seaways has sold seven MR product tankers acquired in the merger, of which four were already delivered.
The company expects to receive net proceeds totalling $75m from the sales after debt repayments. International Seaways said the deals were part of a “post-merger asset optimisation program” and that it will continue exploring the sale of its least-efficient or non-core assets.
No further details on the sales were disclosed.
VesselsValue data showed the New York-headquartered company recently sold the 298,600-dwt VLCC Seaways Tanabe (built 2002) for $24m and the 50,000-dwt MRs Citrus (built 2007) and Atlantic Breeze (built 2008) for unknown prices.
“Our strategic focus remains on achieving the highest operational standards, executing our disciplined and balanced approach to capital allocation and preserving our financial strength, while concentrating on achieving the considerable economies of scale that have been made possible by the merger,” International Seaways president and chief executive Lois Zabrocky said.
“We are poised to benefit from positive long-term industry fundamentals, as well as near-term developments, notably recovering global oil demand, continued inventory destocking, and increased Opec production.”
The ship sales were unveiled as the company slipped into a net loss of $18.8m in the second quarter, reversing from a profit of $64.4m in the same period of 2020.
Loss per share reached $0.67 versus the street consensus of $0.48.
Total shipping revenue collapsed to $46.3m from $140m due to weaker charter rates. Looking forward, the company disclosed vessel earnings have remained dismal this quarter.
International Seaways’ VLCCs have been fixed at $16,000 per day for 65% of the third-quarter days, suezmaxes at $11,700 per day for 52% of their available days, and aframaxes and LR2s at $17,200 with 69% of the available time locked in.
Also, its panamaxes and LR1s have been chartered at $10,700 per day for 54% of available days, MRs at $10,300 per day for 46% of available time, and handysize ships at $4,000 with 26% of their days accounted for.
“The market remains challenged, and thus far in the third quarter some of the company's areas of focus are doing better than others, but nothing is good,” investment bank Stifel commented in a note.
“Particularly with the boost of liquidity from assets sales helping to fortify the balance sheet, we believe the market is likely to look through the near-term performance and focus on anticipating the timing for a tanker market recovery.”
