OSG Nosedives into Red
NYSE-listed tanker owner and operator Overseas Shipholding Group (OSG) suffered a full-year net loss of USD 293.6 million in 2016, compared with a net income of USD 284 million seen in 2015.
Following the spin-off of the company’s businesses, a net loss from continuing operations for the full year 2016 was USD 1.1 million, compared with a net income of USD 80.6 million for 2015.
The decrease was mainly due to vessel impairments in the second half of 2016, and reductions in interest expense due to the company’s debt reductions in the second half of 2015 and in 2016.
Furthermore, adjusted EBITDA was USD 176.2 million in 2016, an increase of USD 8.1 million compared with 2015, driven primarily by lower general and administrative expenses, partially offset by the decline in time charter equivalent (TCE) revenues.
TCE revenues amounted to USD 446.2 million in 2016, a drop of USD 2.9 million compared with 2015. The decrease was attributed to lower average daily charter rates earned by OSG’s Jones Act fleet.
In late-November 2016, OSG completed the process to separate the company into two independent businesses – Overseas Shipholding Group and International Seaways (INSW).
OSG retained the US business while INSW took over OSG’s former international business.
“We … successfully executed on our strategic goal of streamlining our operating structure and enhancing our focus by completing the spin-off of International Seaways,” Sam Norton, OSG’s President and CEO, said.
“Going forward, OSG will be a diversified US Flag shipping company with a trusted operating franchise and a leading portfolio in the Jones Act market,” Norton further said, adding that the company is well-positioned for future growth opportunities.
As of March 7, OSG’s fleet is comprised of a total of 24 vessels.