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International Seaways (INSW) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 10, 2026

Source: earnings call transcript

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

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

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

INSW operating KPIs by quarter

INSW operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25This call Jun 2026 Q2 FY26Change vs prior quarter
Capital expenditures Dry dock and capital expenditures
$23M Following along the chart from left to right on the cash bridge, we had $175 million in adjusted EBITDA for the fourth quarter, plus $19 million in debt service and another $23 million of dry dock and capital expenditures. Source: earnings call transcript
$20M Following the bridge from left to right, we generated $345 million in adjusted EBITDA, filed $50 million in debt service, hit another $20 million in dry dock and capital expenditures and used about $49 million of working capital. Source: earnings call transcript
-13%
Capital expenditures LR1 newbuilding installments net of financing
~$6M We also paid about $6 million in LR1 newbuilding installments net of financing. Source: earnings call transcript
~$10M We used about $10 million in cash for installment payments net of financing for the original 6 LR1 newbuilds. Source: earnings call transcript
—
Unencumbered vessels
31 We have 31 unencumbered vessels, and we have ample undrawn RCF Capacity. Source: earnings call transcript
25 Net debt around 6% of our fleet's current value and 25 vessels that are unencumbered. Source: earnings call transcript
-19.4%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Tankers International Integration 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

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

Geopolitical disruptions in Strait of Hormuz and Bab-el-Mandeb Ongoing

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 demand Extended 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

Blended spot TCE rates

Next quarter (Q3 FY26 results)
Current $61,000 per day (48% booked for Q3)
Target Continued 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.

Find out whether INSW delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

Market Dynamics and Ton-Mile Demand

Geopolitical disruptions 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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.