Image credit: International Seaways
Tanker owner International Seaways has turned in another hugely profitable quarter while returning significant cash to shareholders with a combined dividend of $1.62 per share.
The 76-ship owner and operator crushed the estimates of the Wall Street analysts with net income of approximately $173 million, or $3.47 per diluted share, and ebitda of about $209 million for the first quarter of 2023.
“The company declared a combined dividend of $1.62 per share composed of a supplemental dividend of $1.50 per share in addition to regular quarterly cash dividend of $0.12 per share to be paid in June 2023,” the tanker owner said.
Meanwhile the shipowner took delivery of two newbuild, dual-fuel (LNG) VLCCs, purchased two 2009-built Aframaxes vessels and sold a 2008-built MR in the first quarter of 2023, according to its financial report.
The first of three dual-fuel VLCCs in the International Seaways newbuilding program was delivered in March 2023. A second vessel was delivered in April 2023 and the final vessel is scheduled for delivery later in the second quarter.
The vessels were ordered for an aggregate contract price of $288 million and have approximately $115 million in remaining payments as of March 31, 2023, which are fully financed under sale leaseback arrangements. When delivered, the vessels will commence long term time charters with an oil major for the next seven years.
In December 2022, the company exercised its purchase options on two 2009-built Aframax vessels under sale leaseback arrangement, which were accounted for as operating leases prior to declaration of the options.
The aggregate purchase price, net of prepaid charter hire of both vessels was approximately $41 million, representing a discount of approximately 45% to the current market value of these vessels. One vessel was delivered in March 2023 while the other was delivered in April 2023.
In the first quarter of 2023, International Seaways sold a 2008-built MR, which generated approximately $10 million in net proceeds after debt repayment.
During the quarter, the company entered into four additional time charter deals on three 2008-built MRs and one 2012-built Suezmax for two to three years.
The new charters increased contracted revenues by approximately $75 million to $337 million, excluding any applicable profit share from April 1, 2023 through charter expiry.
Net income for the first quarter of 2023 was $172.6 million, or $3.47 per diluted share, compared to a net loss of $13.0 million, or $0.26 per diluted share, for the first quarter of 2022.