International Seaways Q2 Earnings Call Highlights
Key Points
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- International Seaways reported record Q2 2026 results, including $295 million in adjusted net income, $345 million in adjusted EBITDA, $261 million in free cash flow and a record $5.05-per-share dividend, driven by strong tanker rates and crude-shipping demand.
- The company ended the quarter with approximately $935 million in liquidity, $250 million in net debt and a 6% net loan-to-value ratio. Third-quarter bookings covered 48% of expected revenue days at a blended spot TCE rate of about $61,000 per day.
- Management ordered four additional LR1 newbuild tankers for delivery in 2028 and expects fleet renewal to benefit from an aging global tanker fleet. It also cited Strait of Hormuz and Bab el-Mandeb disruptions as drivers of higher ton-mile demand while maintaining its focus on conventional oil tanker shipping.
International Seaways (NYSE:INSW) reported record second-quarter results as elevated tanker rates, strong crude shipping demand and disruptions in key maritime chokepoints supported earnings and cash generation.
President and CEO Lois Zabrocky said the company generated adjusted net income of $295 million, or $5.91 per share, during the second quarter of 2026. Adjusted EBITDA reached a record $345 million, while free cash flow totaled a record $261 million. The company also declared its largest quarterly dividend to date, $5.05 per share.
“Our ability to translate these conditions into record shareholder returns is the result of years of disciplined capital allocation, fleet renewal, and balance sheet management,” Zabrocky said.
Strong rates drive earnings and cash flow
CFO Jeff Pribor said International Seaways’ revenue-day-weighted blended spot time-charter-equivalent, or TCE, rate was $79,000 per day in the second quarter, up from $27,500 per day a year earlier and $55,600 per day in the first quarter.
Crude tanker revenue totaled $253 million, including $51 million in profit-sharing from time-charter agreements. Pribor said those arrangements lifted blended VLCC earnings across the company’s spot and time-charter vessels to more than $150,000 per day.
The company’s lightering operation contributed about $5 million of EBITDA, supported by $13 million of revenue, according to Pribor.
International Seaways began consolidating the Tankers International Suez entity following the launch of a Suezmax pool, as the company currently controls a majority of vessels participating in the pool. Pribor said the consolidation adds gross revenue and expenses associated with other pool participants but has no meaningful impact on International Seaways’ underlying economics. The company excluded third-party pool vessels from reported TCE revenue-per-day metrics.
During the quarter, International Seaways generated $345 million of adjusted EBITDA, paid $50 million in debt service and spent $20 million on dry docks and capital expenditures. Working capital used approximately $49 million. The company also paid about $225 million in dividends during the quarter, reflecting its previous record quarterly dividend of $4.55 per share.
Liquidity remains near $1 billion
International Seaways ended the quarter with $409 million of cash and $526 million of undrawn revolving-credit capacity, for total liquidity of roughly $935 million. Pribor said the company had about $250 million of net debt and a net loan-to-value ratio of about 6%, based on the current value of its fleet.
The company reported gross debt of $651 million at quarter-end, excluding the borrowing-base facility tied to Tankers International Suez. Mandatory debt repayments for the second half of 2026 are expected to be about $50 million. Most of the company’s debt is fixed or hedged, resulting in a total cost of debt of around 5.5%.
Zabrocky said the company has 25 unencumbered vessels and fleet-wide spot cash breakeven levels below $14,500 per day over the next year.
For the third quarter, International Seaways had booked approximately 48% of expected revenue days at a blended spot TCE of about $61,000 per day as of the call date. Pribor cautioned that reported third-quarter TCE results may change as additional voyages are fixed.
Fleet renewal includes four additional LR1 newbuilds
International Seaways recently ordered four additional LR1 newbuildings scheduled for delivery in the second half of 2028. The vessels complement six LR1s ordered about three years ago, four of which are already in service. Zabrocky said the company secured the latest vessels at essentially the same price it paid three years earlier, despite double-digit increases in newbuild prices across the industry.
The 10 vessels are expected to trade in the Panamax International pool, which Zabrocky said has averaged more than $70,000 per day over the prior nine months. In response to an analyst question, she said the company intends to continue operating in its established Americas-focused niche, including trades through the Panama Canal’s old locks.
Zabrocky said the LR1 vessels are expected to replace older units in the company’s fleet over time. She added that recent market dislocation among tanker sizes helped LR1 performance during the second quarter as larger ships were pulled eastward.
Management cites disruption, aging fleet in market outlook
Management said the conflict in the Strait of Hormuz and attempted disruptions by the Houthis around Bab el-Mandeb have created significant inefficiencies in seaborne oil transportation. Zabrocky said the two waterways historically handled nearly 25 million barrels per day of crude oil and petroleum products.
The disruptions have increased ton-mile demand as cargoes seek alternative routes, she said. At the same time, management said strategic petroleum reserve releases have helped offset supply disruptions and supported relatively stable commercial oil inventories.
Zabrocky said an easing of disruptions could lead governments to replenish strategic reserves, creating another source of tanker demand. However, she also noted that a prolonged disruption could eventually weigh on the global economy and oil consumption.
On the supply side, the company said roughly 30% of the global tanker fleet is more than 20 years old, with that percentage expected to exceed 50% by 2030. Management said this aging profile could require substantial fleet renewal even as new vessel orders continue to enter the market.
Asked whether International Seaways would pursue growth outside conventional crude and product tanker shipping, Zabrocky said the company is continuing to focus on the oil tanker market. “For right now, we’re sticking to the oil tanker space,” she said.
About International Seaways (NYSE:INSW)
International Seaways, Inc (NYSE: INSW) is an independent tanker company that provides seaborne transportation services to oil companies, commodity traders and national oil companies. The firm’s operations focus on the carriage of crude oil and refined petroleum products, offering both time charter and voyage charter arrangements. With a modern fleet of very large crude carriers (VLCCs), Suezmax and Aframax tankers, as well as medium range (MR) and Handy product tankers, International Seaways supports global energy supply chains across major trade routes.
Founded in 1997 as Diamond S Shipping, the company completed its initial public offering in the late 1990s and rebranded to International Seaways in September 2018.
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