Lois Zabrocky, President & CEO of International Seaways, said earlier that the company was planning to avail of the attractive second-hand prices instead of ordering newbuildings.
The company informed that the VLCC, the identity of which remained undisclosed, was delivered in November and that it will commence trading in the Tankers International pool. International Seaways funded the vessel acquisition from available liquidity.
During the third quarter of 2017, International Seaways took delivery of the Seaways Hatteras and the Seaways Montauk, 159,000 DWT 2017-built Suezmax tanker newbuildings constructed at Hyundai Samho Heavy Industries shipyard. Both commenced trading in the Blue Fin Suezmax pool.
In addition, the company decided to dispose of some of its older tonnage, including a 2001-built MR, which was delivered to buyers in August 2017, and recognized a gain of USD 1.9 million. Subsequent to quarter’s end, the tanker owner sold two more MRs, one built in 2004 and one in 2002. The MR oldies are scheduled to be delivered to buyers during November 2017 and the first quarter of 2018, respectively.
“During the quarter, we have capitalized on attractive asset values with the acquisition of two Suezmax tankers and a recent acquisition of a 2010-built VLCC. In addition to growing our diverse fleet, we took advantage of our strong balance sheet to return capital to shareholders during the quarter, as we opportunistically executed on our share repurchase program,” Zabrocky said.
“We also commenced two five-year contracts for our FSO joint ventures during the quarter, which are expected to generate in excess of USD 180 million of EBITDA for the company over the contract period.”
Specifically, the previously announced five-year contracts for the company’s FSO joint ventures with Euronav NV commenced with North Oil Company (NOC), the new operator of the Al Shaheen oil field, off the coast of Qatar, whose shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P Golfe Limited.
The new contracts, which are for the FSO Africa and FSO Asia, are expected to generate in excess of USD 360 million of EBITDA for the joint venture over their five-year terms. Based on International Seaways’ 50% ownership in the joint venture, the five-year contracts are expected to generate in excess of USD 180 million of EBITDA.
The company reported a net loss for the third quarter of 2017 of USD 21.8 million, reducing the loss from last year’s third quarter of USD 50.9 million. The net loss reflects USD 7.3 million in vessel impairment charges and USD 1.2 million in debt modification fees, and a decline in TCE revenues compared with the third quarter of 2016.
Net loss for the nine months of this year was USD 15.4 million, also down when compared with net income of USD 39.5 million for the nine months ended September 30, 2016.
International Seaways owns and operates a fleet of 57 vessels, including one ULCC, nine VLCCs, two Suezmaxes, eight Aframaxes/LR2s, 12 Panamaxes/LR1s and 19 MR tankers. Through joint ventures, it has ownership interests in four liquefied natural gas carriers and two floating storage and offloading service vessels.
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