International Seaways, Inc. · NYSE:INSW
International Seaways — Q2 2021 Earnings Presentation
25 slides from International Seaways's earnings presentation, Aug 9, 2021
Slide 1: International Seaways, Inc. Second Quarter 2021 Earnings Presentation
International Seaways, Inc. Second Quarter 2021 Earnings Presentation August 9, 2021
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements During the course of this presentation, the Company (International Seaways, Inc. (INSW)) may make forward-looking statements or provide forward-looking information. All statements other than statements of historical facts should be considered forward-looking sta
Slide 3: Business Review
Business Review Lois K. Zabrocky President & CEO 3
Slide 4: Second Quarter 2021 Highlights and Recent Developments
Second Quarter 2021 Highlights and Recent Developments • Completed Merger with Diamond S Shipping o INSW’s net asset value roughly doubled in an all-stock merger and fleet size tripled; now the largest diversified US-listed tanker owner o Accretive to INSW’s earnings, cash flow per share o Estimated
Slide 5: A Transformational Strategic Combination – INSW and DSSI
A Transformational Strategic Combination – INSW and DSSI Key Company Information Combined Owned Fleet(1) 37 64 97 Owned Tanker DWT Capacity(1) 6.1mm 4.6mm 11.0mm Other Business Units Lightering -- Lightering Weighted Avg. Age(2) 8.0 years 10.2 years 8.7 years Crude / Product Mix (%) 90 / 10 55 / 45
Slide 6: State of the Art Newbuilding Program
State of the Art Newbuilding Program • Three dual-fuel LNG VLCCs on order at Korea’s Daewoo Shipbuilding & Marine Engineering Company (DSME) • Top tier shipbuilder • The ships are extremely efficient, 20% more efficient than modern VLCCs and 40% more efficient than 10 year old VLCCs • The ships will
Slide 7: Capital Allocation – Fleet Expansion Done During Cycle Lows
Capital Allocation – Fleet Expansion Done During Cycle Lows DSSI – $361 million stock acquisition in July 2021 at cyclical low Three Dual Fuel LNG VLCCs contracted for $288 million, now valued $45 million higher 1 Invested $600m in 2017 and 2018 at the bottom of the cycle. Vessels retain >95% of ori
Slide 8: Market Update – Oil Supply, Demand and Implications
Market Update – Oil Supply, Demand and Implications • Oil Supply and Demand o OPEC+ announced agreement to increase supply by 2 mb/d from August to December, coming in 400,000 b/d monthly increments. This is on top of the 2.1 mb/d increase from May through July. o Oil demand jumped by 3.2 mb/d in Ju
Slide 9: Market Update – Ship Supply
Market Update – Ship Supply • Orderbook Update o Orderbook remains at historical lows: Recycling Candidates VLCC Orderbook • VLCC 9.5% • Suezmax 7.6% 20 • Aframax/LR2 8.8% 18 • Panamax/LR1 1.1% • MR 5.7% 16 o 31 VLCCs ordered in 2019; 31 in 2020; 27 YTD 2021 14 o No new VLCC orders since early June
Slide 10: Financial Review
Financial Review Jeffrey D. Pribor SVP & CFO 10
Slide 11: Financial Summary – TCE Revenue & Adjusted EBITDA
Financial Summary – TCE Revenue & Adjusted EBITDA1 ($ millions) Quarterly: 2Q 2020 vs 2Q 2021 Quarterly TCE Revenue Quarterly Adjusted EBITDA $135 $96 $29 $106 $45 $14 $31 $10 2020 Q2 2021 Q2 Crude Tankers Product Tankers 2020 Q2 2021 Q2 LTM: 2Q 2020 vs 2Q 2021 LTM TCE Revenue LTM Adjusted EBITDA $4
Slide 12: Capital Allocation – Returning Cash to Shareholders
Capital Allocation – Returning Cash to Shareholders • $31.5m special dividend paid prior to closing of • Total cash to shareholders Q1 2020 – Q3 2021 $71.7 Diamond S merger million: • $0.06 per share dividend instituted in 2020. Through Q2 • 2021 YTD $34.9 million 2021, we have paid $10.1m to shareh
Slide 13: Financial Summary – 2021 Q2 & Q3 Earnings Update
Financial Summary – 2021 Q2 & Q3 Earnings Update 2021 Q2 Actual 2021 Q3 to Date 1 SPOT TC OVERALL SPOT TC OVERALL TCE TCE TCE Fixed TCE Fixed TCE Fixed TCE VLCC $13,700 $43,900 $17,400 61% $10,800 100% $43,900 65% $16,000 Suezmax $18,500 --- $18,500 45% $6,500 100% $27,000 52% $11,700 INSW 32% $8,70
Slide 14: Lean and Scalable Model – Cash Breakevens
Lean and Scalable Model – Cash Breakevens TCE breakeven levels allow INSW to navigate low points in the tanker cycle while providing significant operating leverage in rising markets INSW Daily OPEX excludes DDK deviation bunkers, insurance claims and one-off expenses G&A for the Lightering segment i
Slide 15: Financial Summary – Change in Cash Balance
Financial Summary – Change in Cash Balance Note: the above figures are INSW, pre-merger, as of March 31, 2021 and June 30, 2021 15
Slide 16: Strong Financial Position – Balance Sheet
Strong Financial Position – Balance Sheet Strong balance sheet protects INSW during low portions of tanker cycle June 30, 2021 ($ M) Assets Liabilities INSW Book Value of FSO JV as of Current Liabilities (including $61M current June 30, 2021: $136 million Cash and Equivalents $117 portion of long te
Slide 17: Proforma Combined Company Debt at 6/30/21
Proforma Combined Company Debt at 6/30/21 Proforma INSW Debt at 6/30/21 Principal Balance ($M) Maturity Rate Quarterly Amortization ($M) Core Facility $252.6 1/23/2025 LIBOR +240 bps $9.50 Sinosure Credit Facility $234.3 2027-2028 LIBOR +200 bps $5.90 8.5% Senior Notes $25.0 6/30/2023 8.50% 0 DSSI $
Slide 18: Strategic Vision for New International Seaways
Strategic Vision for New International Seaways Solidify position as a diversified Efficient Capital Allocation Strategy Maximize Shareholder Value tanker sector bellwether ◼ Comparatively attractive net leverage ◼ Enhanced scale of 101 vessel fleet ratio of 45% remains one of the ◼ Merger expands IN
Slide 19: Appendix
Appendix 19 International Seaways, Inc. BD
Slide 20: Estimated Drydock and CAPEX costs and Out-of-Service Days
Estimated Drydock and CAPEX costs and Out-of-Service Days ($ millions) Note: Q3 and Q4 estimates include the combined INSW / DSSI fleets 2021 Out-of-Service Days Q1 (A) Q2 (A) Q3 (E) Q4 (E) FY 2021 VLCC 76 259 65 15 416 Suezmax 0 0 106 15 121 Aframax / LR2 0 7 6 13 26 Panamax / LR1 169 28 68 5 270 M
Slide 21: Vessel Sales since 6/30/21
Vessel Sales since 6/30/21 • INSW has sold or is in contract to sell twelve (12) vessels as part of its continued Fleet Optimization Program Ship Segment Estimated Seaways Tanabe VLCC reduction of Seaways Hellas Panamax Number of Operating Days for Seaways Jademar Panamax Vessels the balance of 2021
Slide 22: TCE Revenue Reconciliation
TCE Revenue Reconciliation ($ thousands) 2Q20 2Q21 LTM 2Q20 LTM 2Q21 Time charter equivalent revenues 135,289 44,718 438,423 236,872 Add: Voyage expenses 4,436 1,586 21,939 12,774 Shipping revenues 139,725 46,304 460,362 249,646 22
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ thousands) All INSW 2Q20 2Q21 LTM 2Q20 LTM 2Q21 Net income / (loss) 64,358 (18,783) 102,173 (135,056) Income tax provision 1 1 2 1 Interest expense 8,881 7,006 52,181 30,108 Depreciation and amortization 18,880 17,079 75,053 71,029 EBITDA 92,120 5,303 229,409 (33,91
Slide 24: Chartered In Fleet
Chartered In Fleet Charter-In Hire Details • Time Charter-Ins: – 1 MR vessel at 50% - redelivers September 2021 - Charter Hire expense for second half of 2021: $0.3M – 1 LR1 vessel that redelivered in August 2021 – Charter Hire expense for second half of 2021 : $0.5M • Bareboat-Ins: – 2 Aframax vess
Slide 25: INSW Fleet as of August 6, 2021
INSW Fleet as of August 6, 2021 Ship Type DWT Built Ownership Yard Ship Type DWT Built Ownership Yard FSO Africa FSO 432,023 2002-06 50% Daewoo Anikitos MR 50,082 2016-06 Owned Samsung (Ningbo) FSO Asia FSO 432,023 2002-03 50% Daewoo Amor MR 49,999 2015-09 Owned Samsung (Ningbo) Amadeus MR 50,108 20
International Seaways — Q2 2021 Earnings Presentation on 6ix