International Seaways, Inc. · NYSE:INSW
International Seaways — Investor Presentation (October 2020)
23 slides from International Seaways's investor presentation, Oct 7, 2020
Slide 1: International Seaways, Inc. October 2020
1 International Seaways, Inc. October 2020 International Seaways, Inc.
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: Introduction to International Seaways (NYSE: INSW)
Introduction to International Seaways (NYSE: INSW) • Leading diversified tanker owner with significant presence in crude and product sectors • 39 vessel fleet with balanced mix of contracted cash flows and spot market upside • Renewed and upgraded fleet with $600m of acquisitions since Dec 2016 spin
Slide 4: Why Invest in International Seaways?
Why Invest in International Seaways? • Invested $600 million, renewing fleet at bottom of cycle without issuing equity • Sold non-core LNG joint venture for $123 million in cash Disciplined Capital • Installing total of 10 scrubbers on our modern VLCCs – 7 installed to date Allocator • Current Capit
Slide 5: Coronavirus Update
Coronavirus Update Shoreside o All New York and Houston Lightering office employees working remotely since March 16 and we will continue to evaluate our return based upon our highest priority, the safety of our staff COVID - 19 RESPONSE o Full staff capabilities maintained o No delays in closing b
Slide 6: Disciplined Capital Allocation: Fleet Renewal
Disciplined Capital Allocation: Fleet Renewal ▪ International Seaways Invested $600 million at the bottom of the cycle o Two Suezmax newbuilding resales purchased for $58 million each in 2017 o 2010-built VLCC purchased for $53 million in 2017 o Six VLCCs built 2016 and 2015 purchased for $434 milli
Slide 7: Fleet Evolution Since Spin-Off
Fleet Evolution Since Spin-Off 6.2 Total DWT (millions) 6.0 m DWT 6.0 5.8 5.6 5.5 m DWT 5.4 5.2 Spin-Off Dec 2016 June 30, 2020 14 12.1 years Average Age 12 10 9.9 years 8 6 Spin-Off Dec 2016 June 30, 2020 60 58.2 Ton-Years Total Ton-Years 55 50 47.6 Ton-Years 45 40 Spin-Off Dec 2016 June 30, 2020 1
Slide 8: Market Update – Oil Supply, Demand and Market Implications
Market Update – Oil Supply, Demand and Market Implications Oil Demand Global Short-Term Crude in Floating Storage o While the Coronavirus (COVID-19) has negatively impacted oil demand, IEA has for the last two months increased their view of global oil demand, currently at 92.1 million b/d for 2020
Slide 9: Market Update – Ship Supply
Market Update – Ship Supply Historically Low Orderbook Orderbook Update • Orderbook remains historically low: 20 60% • VLCC 7.4% 50% 15 Million DWT • Suezmax 11.1% 40% • Aframax/LR2 9.6% 10 30% • Panamax/LR1 4.3% 20% 5 10% • MR 6.8% 0 0% • 31 VLCCs ordered in 2019; YTD 2020 only 12 Q3-1999 Q3-2006 Q
Slide 10: VLCC Year TC Rates
VLCC 1 Year TC Rates VLCC 1 Year TC (non-ECO) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 VLCC 1 Year TC (non-ECO) Source: Clarksons Weekly VLCC 1 Year Timecharter Rate through May 22, 2020 International Seaways, Inc. 10
Slide 11: INSW Financial Highlights
INSW Financial Highlights • Accomplished fleet upgrade while maintaining one of the lowest leverage profiles in the Low Financial tanker space Leverage and Strong • 34% Net Loan to Asset Value at June 30 (includes the value of the FSO JV) Balance Sheet • 30% Net Debt to Capitalization at June 30 • A
Slide 12: Q1 $380 million Refinancing Deleveraged and Lowered Costs
Q1 $380 million Refinancing Deleveraged and Lowered Costs As of December 31, 2019 Pro Forma as of June 30, 2020 Principal Annual Principal Annual ($m) Maturity Rate Amortization ($m) Maturity Rate Amortization 1 Term Loan B $331.5 2022 L + 600 $18.4 Core Facility Term Loan $290.5 2025 L + 260 $37.7
Slide 13: Lean and Scalable Model – Cash Breakevens
Lean and Scalable Model – Cash Breakevens – Last 12 Months TCE breakeven levels allow INSW to navigate low points in the tanker cycle while providing significant operating leverage in rising markets Last Twelve Months Q2 2020 Actuals Breakeven Rates by Sector • INSW Daily OPEX excludes DDK deviation
Slide 14: Financial Summary – Q2 & Q3 Earnings Update
Financial Summary – Q2 & Q3 Earnings Update 2020 Q2 Actual 2020 Q3 Booked to Date SPOT TC OVERALL SPOT TC OVERALL TCE TCE TCE Fixed TCE Fixed TCE Fixed TCE VLCC $71,700 $67,200 $70,500 77% $40,200 100% $73,300 84% $52,400 VLCC < 15 $75,300 $73,800 $74,900 77% $44,900 100% $80,500 84% $57,700 VLCC 15
Slide 15: INSW Metrics and Multiples Based on Pareto and Mid-Cycle Estimates
INSW Metrics and Multiples Based on Pareto and Mid-Cycle Estimates ▪ The view from the tanker bridge is somewhat foggy – Research views on remainder of 2020 and full year 2021 rates vary widely, given differing views on the pace, extent and effect of the global oil and refined product de-stocking pe
Slide 16: INSW Metrics and Multiples Based on Jefferies and Mid-Cycle Estimates
INSW Metrics and Multiples Based on Jefferies and Mid-Cycle Estimates Illustrative comparison of estimates for INSW EBITDA and EPS from one shipping research firm – Jefferies – versus theoretical estimates of INSW mid-cycle average earnings Metrics Jefferies 2021 (1) Pro Forma Mid-Cycle (2) EBITDA $
Slide 17: Industry Leading ESG Footprint
Industry Leading ESG Footprint Environmental • Commitment to minimizing risk of all forms of pollution • Sustainability-linked pricing feature of INSW’s new debt facility • Active compliance programs for IMO 2020, ballast water treatment • CEO on the board of ITOPF • NAMEPA Marine Environment Protec
Slide 18: Transparency in CO2 Emissions Reporting
Transparency in CO2 Emissions Reporting In 2018, the IMO adopted an initial strategy for reducing greenhouse gas (“GHG”) emissions from vessels, and calling for a 70% reduction in carbon emissions from 2008 levels by 2050 • IMO established trajectories and targets for each ship type and size, cons
Slide 19: We Will Achieve Decarbonization Using the Technology of Today
We Will Achieve Decarbonization Using the Technology of Today … “Get To Green” Initiative • Working in conjunction with our third-party technical managers, in 2018 we initiated a “Get to Green” initiative, where we encourage our crews to continually monitor and report equipment performance metrics
Slide 20: Appendix
20 APPENDIX International Seaways, Inc.
Slide 21: VLCC Time Charter Details
VLCC Time Charter Details Seaways Kilimanjaro 3 Years $45,000 / day Seaways Tanabe 1 Year $53,000 / day Seaways Tybee 7 Months $100,000 / day average Seaways McKinley 2020-01 2021-01 2022-01 2023-01 International Seaways, Inc. 21
Slide 22: INSW Fleet as of September 1, 2020
INSW Fleet as of September 1, 2020 Ship Type Built DWT Ownership Ship Type Built DWT Ownership Gener8 Chiotis VLCC 2016 300,973 Owned Seaways Leyte LR1 2011 73,944 Owned Gener8 Success VLCC 2016 300,932 Owned Seaways Samar LR1 2011 73,925 Owned Gener8 Supreme VLCC 2016 300,933 Owned Seaways Guayaqui
Slide 23: EBITDA Reconciliation ($ millions)
EBITDA Reconciliation ($ millions) Pro Forma Mid-Cycle Net Income 89 Income tax provision/(benefit) 0 Interest expense 29 Depreciation and amortization 82 EBITDA 200 Source – Management estimate based on available industry information and historical trends. For illustrative purposes – not intended t
International Seaways — Investor Presentation (October 2020) on 6ix