International Seaways takes loss, but advancing energy transition

New York-based International Seaways, one of the world's largest tanker companies, claimed it was a leader in the maritime energy transition after reporting May 6 that it took a loss in the first quarter.

The $13.4mn net loss during Q1 compared with income of $33mn y/y. Time charter equivalent revenues were $45.2mn, compared with $119.7mn in Q1 2020, while adjusted EBITDA came in at $10.7mn, compared with $74.2mn y/y.

The company attributed the losses in part to the continued strains on the energy sector from the COVID-19 pandemic, which put downward pressure on tanker day rates.

Elsewhere, Seaways said that during Q1 it signed contracts to secure three dual-fuel LNG tankers of VLCC class from the Daewoo Shipbuilding & Marine Engineering shipyard in South Korea. Those are on seven-year time charter to Shell, with delivery expected by Q1 2023.

“In addition to the charters providing strong, stable cash flows with added upside, these highly efficient vessels offer significant environmental benefits and advance Seaways’ position at the forefront of sustainability initiatives in the maritime sector,” CEO Lois Zabrocky said.

The shipping industry is working to meet its obligations under the IMO 2020 environmental protocol that calls for sweeping emissions reductions. Shippers are using low-sulphur fuel oil, LNG and other cleaner fuels as part of the energy transition.

Seaways in March announced plans to merge with Diamond S Shipping in a stock-for-stock transaction, a deal that Zabrocky described as transformational.

“Among the benefits of this transaction, we expect to double our net asset value, realise significant cost synergies, increase our equity market capitalization, all while maintaining one of the lowest net leverage ratios amongst our peers,” she said.