International Seaways, Inc. · NYSE:INSW
International Seaways — Pareto Securities Energy Conference 2020
22 slides from International Seaways's conference presentation, Sep 17, 2020
Slide 1: International Seaways, Inc. Pareto Energy Conference
1 International Seaways, Inc. Pareto Energy Conference International Seaways, Inc. September 16-17, 2020
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 • Installed scrubbers on 7 VLCCs to date • 3 more postponed until natural d
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 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 Capital Alloca
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 o 2010-built VLCC purchased for $53 million o Six VLCCs built 2016 and 2015 purchased for $434 million total o Asset
Slide 7: 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 8: 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 9: VLCC 1 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. 9
Slide 10: 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 11: 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 12: 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 13: 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 14: 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 15: INSW Metrics and Multiples Based on Pareto and Mid-Cycle Estimates
INSW Metrics and Multiples Based on Pareto and Mid-Cycle Estimates Illustrative comparison of estimates for INSW EBITDA and EPS from one shipping research firm – Pareto Securities – versus theoretical estimates of INSW mid-cycle average earnings Metrics Pareto 2021 (1) Pro Forma Mid-Cycle (2) Pareto
Slide 16: Strong Environmental Social & Governance Culture
Strong Environmental Social & Governance Culture • INSW is committed to implementing and advocating industry leading Environmental, Social and Governance practices Environmental • Commitment to minimizing risk of all forms of pollution and managing waste streams • Sustainability-linked pricing featu
Slide 17: Strong Environmental Social & Governance Culture
Strong Environmental Social & Governance Culture Governance • Six members of Board of Directors fully independent • Split non-Executive Chairman and CEO • Commitment to diversity exemplified by two female Directors, one of whom is CEO • Shareholder representation on Board • Board includes former CEO
Slide 18: Appendix
18 APPENDIX International Seaways, Inc.
Slide 19: 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 65 62.6 Ton-Years Total Ton-Years 60 55 50 47.6 Ton-Years 45 40 Spin-Off Dec 2016 June 30, 202
Slide 20: 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 $100,000 / day average Seaways McKinley 2020-01 2021-01 2022-01 2023-01 International Seaways, Inc. 20
Slide 21: INSW Fleet as of September 1, 2020
INSW Fleet as of September 1, 2020 Ship Type Built DWT Ownership Ship Type Built DWT Ownership Gener8 Chiotis VLCC 2016 300,973 Owned Seaways Leyte LR1 2011 73,944 Owned Gener8 Success VLCC 2016 300,932 Owned Seaways Samar LR1 2011 73,925 Owned Gener8 Supreme VLCC 2016 300,933 Owned Seaways Guayaqui
Slide 22: EBITDA Reconciliation ($ 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
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