Overseas Shipholding Group’s profit ticked up, with chief executive Sam Norton promising more of the same so long as global tanker rates remain high.
On Friday, the Florida Jones Act tanker owner reported a $14.6m profit for the three months ending on 30 March, up from $12.1m from the same period last year.
Revenue jumped to $118m from $114m.
“OSG’s first-quarter results continued the recent trend of steadily improving cash flow and profitability,” Norton said in the earnings release.
He said the 36% jump in earnings per share — from $0.19 to $0.14 — was especially noteworthy as it is “the combined effect of numerous initiatives undertaken over the past 12 months to deliver shareholder value”.
Norton said the turmoil in the Red Sea, where owners across the industry have chosen to reroute around the Cape of Good Hope to avoid being targeted by Houthi militants, was a positive for US domestic shipping.
The move has helped raise rates, with the Baltic Clean Tanker Index rising four points to 1,004, up from the low to mid-900 range before attacks became widespread late last year.
“Disruptions to historical trading patterns caused by hostilities in the Red Sea, growing geopolitical tensions in the Persian Gulf and the continuing war in Ukraine have kept international freight markets at or near historical highs,” he said.
“High international freight rates indirectly stimulate domestically sourced fuel consumption — and by extension Jones Act transportation demand — since import substitution is constrained by comparatively high freight costs for product shipped over longer distances on foreign flag vessels.
“So long as international freight rates remain high, ‘Buy America’, when it comes to fuels, will have economic as well as rhetorical implications.”
Additionally, the New York-listed company extended the bareboat charter for the 46,700-dwt Overseas Tampa (built 2011) for five years beginning in June and running into 2030.
