International Seaways Q2 2025 slides: Fleet optimization drives improved quarterly results

International Seaways Inc . (NYSE:INSW) presented its second quarter 2025 earnings results on August 6, 2025, highlighting quarter-over-quarter improvements in financial performance, strategic fleet optimization initiatives, and consistent shareholder returns. The tanker company’s stock was trading up 1.13% in premarket at $43.76, reflecting positive investor sentiment following the release.

Quarterly Performance Highlights

International Seaways reported net income of $62 million ($1.25 per share) for Q2 2025, with adjusted net income of $50 million ($1.02 per share). This represents an improvement from Q1 2025’s adjusted net income of $40 million ($0.80 per share), though still below the stronger results seen in the same quarter last year.

As shown in the following comprehensive overview of the company’s quarterly performance:

The company’s TCE (Time Charter Equivalent) revenues reached $178 million in Q2 2025, down from $252 million in Q2 2024, reflecting the challenging year-over-year comparison. However, adjusted EBITDA showed resilience at $101.5 million, improving from $90.7 million in the previous quarter.

Spot earnings varied across vessel classes, with VLCCs achieving $39,300 per day and Suezmax vessels earning $36,800 per day in Q2 2025. For the third quarter, the company has fixed 41% of its fleet at approximately $27,900 per day.

The detailed quarterly results show the financial metrics across different vessel classes and time periods:

Strategic Fleet Initiatives

A key focus of International Seaways’ strategy has been fleet optimization, with the company divesting older vessels while selectively acquiring modern, efficient ships. During Q2, the company sold two 2007-built MRs for $28 million and has agreed to sell four additional vessels in Q3 for expected proceeds of $57 million. These six vessels had an average age of 17.5 years.

Simultaneously, the company agreed to purchase a 2020-built scrubber-fitted VLCC for $119 million, enhancing its fleet with modern, efficient tonnage. The company also expects to take delivery of its first LR1 newbuilding in Q3 2025.

President and CEO Lois K. Zabrocky emphasized the company’s strategic approach: "We continue to renew our fleet so that our average age is about 10 years old in what we see as the sweet spot for tanker investments and returns."

Financial Position & Shareholder Returns

International Seaways maintained its strong financial position with total liquidity of $709 million as of June 30, 2025, comprising $149 million in cash and $560 million in undrawn revolving credit facilities. This represents an improvement from the $673 million in liquidity reported at the end of Q1 2025.

The following cash flow analysis illustrates the company’s liquidity management during the quarter:

The company’s balance sheet remains robust with gross debt of $553 million and a net loan-to-value ratio of just 14%, down from 15% in the previous quarter. The earliest debt maturity is not until 2030, providing significant financial flexibility.

The company’s financial position is summarized in the following balance sheet overview:

Shareholder returns remain a priority, with International Seaways declaring a dividend of $0.77 per share for Q2 2025, representing a 75% payout ratio of adjusted net income. This marks the 23rd consecutive quarterly dividend and the fourth consecutive quarter with a payout ratio of 75% or above. Since supplementing its regular dividend in Q4 2022, the company has maintained a 14% dividend yield.

Market Outlook & Forward Guidance

International Seaways provided an optimistic outlook for the tanker market, citing supportive supply and demand fundamentals. Oil demand is forecasted to grow by 0.8 million barrels per day in 2025, aligned with historical growth rates, while OPEC+ production increases are set to fully unwind 2.2 million barrels per day in cuts.

The following analysis of tanker demand drivers illustrates the market dynamics:

On the supply side, the company highlighted that the current orderbook represents only 15% of the existing fleet, delivering over the next four years. This is insufficient to replace the 48% of the fleet that will be over 20 years old by the end of the delivery schedule. The average age of the tanker fleet is 14 years, compared to 9.5 years in May 2015.

For Q3 2025, International Seaways expects contracted time charter revenue (excluding profit share) of $30-32 million, with full-year 2025 projections of $119-121 million. Vessel expenses are anticipated to be $68-74 million in Q3 and $264-270 million for the full year.

The company’s forward guidance and break-even analysis provide insight into future financial performance:

With a spot cash break-even rate of approximately $13,000 per day for the next 12 months, International Seaways is well-positioned to generate positive cash flow even in a more challenging rate environment.

CFO Jeffrey D. Pribor commented on the company’s financial strategy: "We like the leverage level we’re at now, broadly sub 20%. We have to be sub 15% net loan to value."

As International Seaways continues to execute its fleet optimization strategy while maintaining strong shareholder returns, the company appears well-positioned to navigate the evolving tanker market landscape through the remainder of 2025 and beyond.

Full presentation:

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