INSW — International Seaways, Inc.

Summary of International Seaways, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Net Income: $128 million ($2.56 per diluted share); adjusted net income was $122 million ($2.45 per diluted share).
• Adjusted EBITDA: $175 million.
• Dividend Declaration: The company announced a quarterly dividend of $2.15 per share, representing an 87% payout ratio of adjusted net income and marking the largest dividend in the company's history.
• Total Liquidity: $724 million, including $170 million in cash and $560 million in undrawn revolver capacity.
• Net Loan-to-Value Ratio: Below 13%, with a spot cash breakeven rate of less than $15,000 per day.

2. Strategic Updates and Business Highlights:

• Fleet Renewal: The company is consolidating Tankers International by acquiring the remaining 50% interest and expanding into Suezmax vessels. They took delivery of the Seaways Gibbs Hill, a high-spec VLCC, for $119 million and disposed of 10 older vessels for $131 million.
• Capital Allocation Strategy: Continued focus on returning cash to shareholders while maintaining a strong balance sheet. The company has a $50 million share repurchase program in place until the end of 2026.
• Operational Performance: The crude segment outperformed the product segment in Q4, with TCE revenues being evenly balanced over the past year.

3. Forward Guidance and Outlook:

• Market Conditions: Positive outlook for seaborne tanker transportation with projected oil demand growth of over 1 million barrels per day for 2026 and 2027. The company expects to generate significant free cash flows in Q1 2026, with a blended average spot TCE of approximately $50,900 per day on 71% of expected revenue.
• Expense Guidance: Projected increases in G&A expenses due to the consolidation of Tankers International, but offset by TI commissions.

4. Bad News, Challenges, or Points of Concern:

• Higher Vessel Expenses: Fourth-quarter vessel expenses exceeded guidance due to timing of stores and spares.
• Geopolitical Risks: Ongoing tensions (e.g., U.S.-Iran, Russia-Ukraine) and sanctions affecting the tanker market could introduce volatility.
• Market Dynamics: Despite a strong current market, the potential for oversupply exists as supply is projected to exceed demand in 2026.

5. Notable Q&A Insights:

• Market Drivers: Geopolitical factors, such as reduced imports of refined products from Russia, are contributing to elevated MR rates.
• Profit Sharing on VLCCs: The company has a profit-sharing agreement with Shell on three VLCCs, with no cap on upside from spot rates.
• Dividend Strategy: The increase to an 87% payout ratio is seen as sustainable given the current earnings power and liquidity, with a focus on maintaining shareholder returns.
• Industry Consolidation: There is potential for further consolidation in the tanker industry, driven by the need for reliable tonnage and the impact of major players consolidating fleets.

Overall, International Seaways demonstrated strong financial performance in Q4 2025, with strategic initiatives aimed at fleet renewal and shareholder returns, while navigating challenges posed by geopolitical risks and market dynamics.