Overseas Shipholding Group Expects to Benefit from Improving Market
Florida-based tanker shipping company Overseas Shipholding Group (OSG) closed the first nine months of this year with improved earnings.
The company reported a net income of USD 18.7 million during the period from January to September 2018, compared to USD 2.3 million posted in the corresponding period a year earlier.
What is more, net income for the third quarter stood at USD 11.9 million, compared to a net loss of USD 6.3 million seen in the same quarter last year.
“The third quarter saw OSG make meaningful progress in executing on its business plan, notwithstanding our short-term financial results. Highlights for the quarter are that we secured multiple new term-charter fixtures, extended our contract of affreightment with the Government of Israel through the end of 2020, and announced contracts for the construction of two new tankers and one new barge,” Sam Norton, President and CEO, said.
Shipping revenues for the first nine months of this year amounted to USD 276.9 million, lower by 7% when compared with the first three quarters of 2017. In addition, shipping revenues for the third quarter 2018 were USD 80.5 million, down 13.7% compared with the same period in 2017.
As explained, several factors contributed to the decrease in revenues including an increase in scheduled drydocking, unplanned repair days, one less Government of Israel voyage during the third quarter of 2018 compared to the same period in 2017, one less vessel in operation in the third quarter 2018 compared to third quarter 2017, and seasonal slow-down manifested by fewer spot market opportunities.
“We are well along the path to refinance and fully pay off our term debt which matures in August 2019 using a combination of cash and new debt. We have in hand commitments exceeding USD 325.0 million from a syndicate of lenders for a new term loan, as well as a second loan with another lender of USD 27.5 million, both of which we anticipate closing in the coming weeks. We expect these financings to add longer-term stability to our balance sheet, clearing the path for the pursuit of expansion opportunities,” Norton added.
“We are confident that the trajectory and mix of our revenue streams position the company well to benefit from the continuing arc of improving fundamentals,” he concluded.
OSG’s 23-vessel US Flag fleet consists of seven ATBs, two lightering ATBs, three shuttle tankers, nine MR tankers, and two non-Jones Act MR tankers that participate in the US MSP.