INSW — International Seaways, Inc.

Summary of International Seaways, Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Net Income: $286 million ($5.75 per diluted share), a record for the company.
• Adjusted Net Income: $194 million ($3.90 per diluted share), excluding special items.
• Adjusted EBITDA: $244 million.
• Dividend Declaration: Record quarterly combined dividend of $4.55 per share, more than doubling the previous quarter's $2.15 per share.
• Payout Ratio: New standard of 85% of net income.
• Total Liquidity: $918 million, including $380 million in cash and $540 million in undrawn revolver capacity.

2. Strategic Updates and Business Highlights:

• Sold 7 older vessels (average age of 17 years) for $216 million as part of fleet optimization.
• Continued delivery of new LR1 vessels, with 2 delivered in 2026 and 2 more expected in Q3.
• Strengthened position in Tankers International, expanding into Suezmaxes.
• Added a Suezmax to the fleet on a 3-year time charter at $40,000 per day, indicating a focus on profitable long-term charters.
• The company has returned over $1 billion to shareholders since 2020.

3. Forward Guidance and Outlook:

• Current blended average spot TCE (Time Charter Equivalent) for Q2 2026 is over $100,000 per day for about 45% of expected revenue.
• Expected breakeven rate for the next 12 months is approximately $14,900 per day.
• The company anticipates continued strong cash flow generation and shareholder returns, supported by a robust balance sheet and favorable market conditions.

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

• The tanker market remains volatile due to geopolitical tensions, particularly in the Strait of Hormuz, which could have longer-term implications for global energy markets.
• Concerns about the aging fleet and the potential for increased competition from the "dark fleet" (sanctioned vessels) as sanctions are lifted.
• The company is cautious about locking in longer-term charters due to current market volatility, preferring to remain flexible in the spot market.

5. Notable Q&A Insights:

• Management confirmed that they have successfully cleared out older MRs and are focusing on high-grading their fleet.
• There is a preference for short-term charters in the current market environment due to volatility, with longer-term rates being less attractive.
• Questions regarding the dark fleet revealed that its utilization remains low, and there is increased scrutiny from the U.S. administration, which may limit competition.
• The lightering business is expected to see increased activity in Q2 as the market stabilizes post-conflict.
• Management expressed openness to share repurchases but indicated a preference for dividends given current market conditions and strong cash flow.

Overall, International Seaways reported strong financial results and maintained a positive outlook, despite challenges posed by geopolitical tensions and market volatility. The company remains committed to returning value to shareholders while strategically optimizing its fleet.