International Seaways (NYSE: INSW) reported Q3 EPS of $0.98, $0.28 better than the analyst estimate of $0.70. Revenue for the quarter came in at $99.88 million versus the consensus estimate of $87.54 million.

Highlights

• Net income for the third quarter was $14.0 million, or $0.50 per diluted share, compared to a net loss of $11.1 million, or $0.38 per diluted share, in the third quarter of 2019. Net income for the quarter reflects the impact of a $12.8 million impairment charge and loss on sale of vessels and a $0.7 million write-off of deferred finance costs and fees associated with the extinguishment of debt. Net income excluding these items was $27.6 million, or $0.98 per diluted share.
• Time charter equivalent (TCE) revenues(A) for the third quarter were $94.0 million, compared to $65.8 million for the third quarter of 2019.
• Adjusted EBITDA(B) for the third quarter was $54.6 million, compared to $23.8 million for the same period of 2019.
• Cash(C) was $153.7 million as of September 30, 2020; total liquidity was $193.7 million, including $40.0 million of undrawn revolver.
• Renewed share buyback program and increased authorization to a further $50 million.
• Paid a regular quarterly cash dividend of $0.06 per share in September 2020 and announced a quarterly cash dividend of $0.06 per share payable in December 2020.
• Prepaid the full $40.0 million outstanding under the Transition Term Loan Facility
• Subsequent to the end of the quarter, agreed to sell a 2002-built VLCC, Seaways Mulan, a 2003-built VLCC, Seaways Rosalyn, and a 2001-built Aframax, Seaways Fran.
• Signed 10-year extensions to our contracts for our two FSO joint ventures, which are expected to generate in excess of $322 million of contract revenues for the Company over the additional 10-year extension periods.

“During the third quarter, we generated solid results and increased our cash position despite current pressure on rates,” said Lois K. Zabrocky, International Seaways’ President and CEO. “Our sizeable fleet of crude and product tankers performed well during the quarter, and the four favorable time charters we executed earlier this year at very strong rates were instrumental in enabling us to optimize revenue during the current period of oil inventory destocking. Importantly, taking into consideration these time charters, two of which extend well into 2021, the contributions from our FSO JV, and our ongoing strategy of paying down debt, we have reduced our cash breakeven rate to approximately $17,500 per day.”

Ms. Zabrocky continued, “Moving forward, we remain positive on the long-term outlook of the tanker market. Our strategic focus continues to be on executing our disciplined and balanced approach to capital allocation, while continuing to advance initiatives that unlock significant value for shareholders. With this important goal in mind, we have finalized 10-year extensions for our FSO joint venture contracts, which are expected to generate in excess of $322 million of contract revenues for the Company, bolstering our contracted cash flows for another decade. In addition, and as we continue to operate in a COVID-19 environment, our priorities remain the safety of our onshore and at-sea professionals and providing best-in-class service to our leading energy customers.”

Jeff Pribor, the Company’s CFO, added, “We have succeeded in generating strong cash flows year-to-date for shareholders and deploying capital to further pay down debt and significantly enhance our financial strength. Notably, our total liquidity at quarter’s end was $194 million, and our net loan to value was 39%, one of the lowest among our tanker peers. We also paid our regular quarterly cash dividend of $0.06, complementing the approximate 5% of stock we have purchased in 2020 thus far. With our ample liquidity, we remain in a strong position to continue to return capital to shareholders and take advantage of strategic opportunities as they arise.”

For earnings history and earnings-related data on International Seaways (INSW) click here.