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    INSW
    Earnings call· Jun 2026(Q2 FY26)

    International Seaways Q2 FY26 earnings call INSW

    Aug 10, 2026 Source

    Executive summary

    International Seaways Q2 FY26 — Record Performance and Shareholder Returns

    International Seaways delivered record Q2 FY26 financial results, driven by strong tanker market conditions and disciplined capital allocation. The company achieved record adjusted net income, EBITDA, and free cash flow, enabling its largest quarterly dividend. Strategic fleet renewal and a robust balance sheet position Seaways to capitalize on market opportunities while navigating geopolitical disruptions and maintaining a commitment to significant shareholder returns.

    Highlights

    5

    • Delivered record adjusted net income of $295 million or $5.91 per share.

    • Achieved record EBITDA of $345 million and record free cash flow of $261 million.

    • Declared the largest quarterly dividend of $5.05 per share, reflecting commitment to return at least 85% of adjusted net income.

    • Secured 4 additional LR1 newbuildings for H2 2028 delivery at essentially the same price as 3 years ago, despite double-digit industry price increases.

    • Maintained nearly $1 billion of liquidity and a net loan to value of approximately 6%.

    Concerns

    1

    • Geopolitical disruptions in the Strait of Hormuz and Bab-el-Mandeb create uncertainty and could weigh on the global economy and oil demand if persistent.

    Guidance & targets

    4
    CategoryTargetConfidence
    Q3 Revenue Days Booked
    48%
    medium materiality
    High
    Blended Spot TCE (Q3 Booked)
    $61,000 per day
    high materiality
    High
    Fleet-wide Spot Cash Breakeven
    below $14,500 per day
    medium materiality
    High
    Expenses
    updated guidance
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    VLCCs
    Blended earnings across both spot and time charter vessels, including profit sharing.
    Blended earnings (spot & time charter): >$150,000 per day
    		———more than $150,000 per day
    LR1s (Panamax International Pool)
    Average daily rate over the last 9 months for vessels trading in the Panamax International Pool.
    Average daily rate (last 9 months): >$70,000 per day
    		———more than $70,000 per day
    MRs (Western Hemisphere)
    Daily rates for MRs, particularly in the Western Hemisphere, indicating strong product volume and demand.
    Daily rate: ~$35,000 per day
    		———almost $35,000 per day

    Operational metrics

    35
    Adjusted net income
    $295 millionrecord
    Q2 FY26

    Record adjusted net income for the quarter.

    Adjusted EBITDA
    $345 millionrecord
    Q2 FY26

    Record adjusted EBITDA for the quarter.

    Quarterly dividend
    $5.05 per sharelargest
    Q2 FY26

    Largest quarterly dividend declared, reflecting commitment to return at least 85% of adjusted net income.

    Shareholder returns
    $0.5 billionafter $1 billion in prior 5 years
    2026 YTD

    Returned $0.5 billion to shareholders in 2026 alone, following $1 billion over the previous 5 years.

    Blended spot TCEs
    $79,000 per dayup from $27,500 per day a year ago and $55,600 per day in Q1 FY26
    Q2 FY26

    Fleet-wide blended spot TCEs.

    Crude tanker revenues
    $253 million
    Q2 FY26

    Total crude tanker revenues for the quarter.

    Lightering business EBITDA
    $5 million
    Q2 FY26

    Contribution from the lightering business.

    Lightering business revenue
    $13 million
    Q2 FY26

    Revenue generated by the lightering business.

    Lightering business vessel expenses
    $3 million
    Q2 FY26

    Vessel expenses for the lightering business.

    Lightering business charter hire
    $4 million
    Q2 FY26

    Charter hire costs for the lightering business.

    Lightering business G&A
    $1 million
    Q2 FY26

    General and administrative expenses for the lightering business.

    Total liquidity
    $980 million
    Start of Q2 FY26

    Total liquidity at the beginning of the second quarter.

    Cash balance
    $377 million
    Start of Q2 FY26

    Cash balance at the beginning of the second quarter.

    Undrawn revolving capacity
    $541 million
    Start of Q2 FY26

    Undrawn revolving credit capacity at the beginning of the second quarter.

    Debt service
    $50 million
    Q2 FY26

    Debt service payments during the second quarter.

    Dry dock and capital expenditures
    $20 million
    Q2 FY26

    Combined dry dock and capital expenditures during the second quarter.

    Working capital usage
    $49 million
    Q2 FY26

    Working capital used during the second quarter.

    Cash for installment payments (LR1 newbuilds)
    $10 million
    Q2 FY26

    Cash used for installment payments for the original 6 LR1 newbuilds.

    Dividends paid
    $225 million
    Q2 FY26

    Total dividends paid to shareholders during the second quarter, representing the then-record quarterly dividend.

    Cash balance
    $409 million
    End of Q2 FY26

    Cash balance at the end of the second quarter.

    Undrawn revolving credit capacity
    $526 million
    End of Q2 FY26

    Undrawn revolving credit capacity at the end of the second quarter.

    Total liquidity
    $935 million
    End of Q2 FY26

    Total liquidity at the end of the second quarter.

    Vessels at cost under books
    $2 billion
    Q2 FY26

    Investment in vessels at cost under books.

    Vessels current value
    $4 billion
    Q2 FY26

    Current market value of the fleet. (Transcription note: Original transcript stated '$4 million', corrected to '$4 billion' based on context of '$2 billion invested' and 'net loan to value of 6%').

    Net debt
    $250 million
    End of Q2 FY26

    Net debt at the end of the second quarter.

    Net loan to value
    6%
    End of Q2 FY26

    Net loan to value at the end of the second quarter, one of the lowest in the sector.

    Gross debt
    $651 million
    End of Q2 FY26

    Gross debt at quarter end, excluding consolidating the TI SUEZ borrowing base facility.

    Mandatory debt repayments
    $15 million
    H2 2026

    Mandatory debt repayments for the second half of 2026.

    Total cost of debt
    5.5%
    Q2 FY26

    Total cost of debt, which is almost entirely fixed or hedged.

    Uncovered vessels
    25
    Q2 FY26

    Number of unencumbered vessels.

    Industry newbuilding price increase
    double digits
    Recent

    Newbuilding prices across the industry increased by double digits, contrasting with the company's ability to secure LR1s at prior prices.

    Tanker fleet over 20 years old
    30%expected to exceed 50% by 2030
    Today

    Highlights the significant fleet renewal required over the remainder of the decade.

    US diesel exports
    1.5 million barrels per day
    Recent

    US refinery system exporting diesel at this rate, concentrated on MRs.

    US gasoline exports
    almost 1 million barrels per day
    Recent

    US refinery system exporting gasoline at this rate, concentrated on MRs.

    China product exports
    800,000 barrels per day
    July

    China resuming product exports, impacting the MR market.

    Industry KPIs

    2
    MetricValueDetails
    Realized price differential$79,000 per dayUSD
    FCF shareholder distributions$261 millionUSD

    Deals & partnerships

    1
    Tankers InternationalIntegration of Tankers International and expansion into the Suezmax segment, including consolidation of the TI Suez entity.

    The company is beginning to see benefits from bringing Tankers International fully into the Seaways family, expanding into the Suezmax segment. Following the launch of the Suezmax pool, the company began consolidating the Tankers International Suez entity as it controls a majority of participating vessels.

    Capital programs

    2
    LR1 Newbuildings (original 6 vessels)underway
    Period spend: $10 million

    Benefit: 6 LR1 vessels

    Cash used for installment payments net of financing for the original 6 LR1 newbuilds during Q2 FY26.

    LR1 Newbuildings (4 additional vessels)announced
    Start: Q2 FY26

    Benefit: 4 additional LR1 vessels

    Ordered 4 additional LR1 newbuildings for delivery in the second half of 2028. These were secured at essentially the same price paid 3 years ago, despite double-digit industry newbuilding price increases.

    Risks & headwinds

    2
    Geopolitical disruptions in Strait of Hormuz and Bab-el-MandebOngoing

    Historically handled nearly 25 million barrels per day of crude and oil petroleum products; creates significant inefficiencies in global trade.

    Mitigation: Cargoes seeking alternative routes increase ton-mile demand. If disruptions ease, inventory replenishment could become an additional source of tanker demand.

    Sustained disruption weighing on global economy and oil demandExtended period

    Could ultimately weigh on the global economy and oil demand, with broader implications for the tanker market.

    Mitigation: Company maintains financial flexibility and a diversified fleet to navigate market volatility.

    What to watch in Q3 FY26

    4

    Blended spot TCE rates

    Next quarter (Q3 FY26 results)
    Current$61,000 per day (48% booked for Q3)
    TargetContinued strength or higher for Q3 FY26

    Why it matters

    Spot rates are the primary driver of revenue and profitability for the company.

    To date, we booked approximately 48% of our expected third quarter revenue days at a blended spot TCE of approximately $61,000 per day across the fleet.

    Q&A highlights

    6

    How will changes in Atlantic Basin production and rerouting affect long-term rates for Suezmax and LR1 tankers?

    Lois Zabrocky noted significant dislocation and substitution between tanker sizes, with LR1s performing strongly due to larger ships being pulled East. She highlighted increasing production from the Americas (US, Guyana, Brazil, Argentina) and the fundamental trend of West increasing supply while the East demands crude.

    “One of the things that we're seeing very significantly now in the tanker market between the Vs, the Suezmaxes, particularly the Aframaxes is a lot of dislocation and substitution by charters between sizes so that you're really seeing a lot of overlap between the sectors.”

    asked by Liam Burke · answered by Lois Zabrocky

    2 min read6 chapters

    Detailed Narrative

    01

    Record Financial Performance

    International Seaways reported record adjusted net income of $295 million ($5.91 per share), record EBITDA of $345 million, and record free cash flow of $261 million for Q2 FY26. This strong performance supported the declaration of the largest quarterly dividend of $5.05 per share, reflecting the company's commitment to returning at least 85% of adjusted net income to shareholders.

    02

    Disciplined Capital Allocation & Fleet Renewal

    The company continues its long-term approach to fleet management, ordering 4 additional LR1 newbuildings for delivery in H2 2028. These vessels were secured at prices comparable to orders placed three years prior, despite significant industry-wide newbuilding price increases. This strategic investment complements existing orders and aims to replace older units, maintaining a competitive fleet in niche trades like the Panamax International Pool.

    03

    Market Dynamics and Ton-Mile Demand

    Geopolitical disruption🌐s in the Strait of Hormuz and Bab-el-Mandeb have created significant inefficiencies in global trade, increasing ton-mile demand and supporting tanker markets. While these events introduce uncertainty, they also drive cargoes to seek alternative routes. The company notes that stable oil consumption, partly offset by strategic petroleum reserve drawdowns, combined with elevated ton-mile demand, benefits the current market.

    04

    Supply-Side Fundamentals

    The tanker market is in its fifth year of an up-cycle, with new orders entering the market. However, a significant portion of the global tanker fleet (30% over 20 years old today, projected to exceed 50% by 2030) is aging, indicating a substantial need for fleet renewal. This dynamic, coupled with disciplined ordering by companies like Seaways, supports a constructive long-term supply outlook.

    05

    Strong Balance Sheet and Liquidity

    International Seaways maintains a robust financial position with nearly $1 billion in total liquidity, comprising $409 million in cash and $526 million in undrawn revolving credit capacity at quarter-end. With approximately $250 million in net debt and a net loan-to-value of about 6%, the company boasts one of the lowest leverage profiles in its sector, providing significant flexibility for growth and shareholder returns.

    06

    Suezmax Pool Expansion

    The company is beginning to realize benefits from integrating Tankers International, expanding into the Suezmax segment. This move is expected to deepen customer relationships, attract additional partners, and leverage combined expertise to strengthen the commercial unit. The company began consolidating the Tankers International Suez entity due to controlling a majority of participating vessels.

    AI-generated summary of the company’s earnings call. Not investment advice.