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    INSW
    Earnings call· Dec 2025(Q4 FY25)

    International Seaways Q4 FY25 earnings call INSW

    Feb 26, 2026 Source

    Executive summary

    International Seaways Q4 FY25 — Record Dividend and Strong Market Outlook

    International Seaways reported a strong Q4 FY25, driven by robust tanker demand and strategic fleet management, culminating in a record dividend payout. The company continues to prioritize shareholder returns and balance sheet strength, while actively renewing its fleet and consolidating market position through strategic acquisitions like Tankers International. Geopolitical factors and sanctions enforcement are providing tailwinds for compliant tanker fleets, supporting a constructive market outlook.

    Highlights

    5

    • Net income for Q4 FY25 was $128 million, or $2.56 per diluted share.

    • Adjusted net income for Q4 FY25 was $122 million, or $2.45 per diluted share.

    • Declared largest ever quarterly dividend of $2.15 per share, representing an 87% payout ratio of Q4 adjusted net income.

    • Achieved $135 million in free cash flow for Q4 FY25.

    • Total liquidity remains strong at $724 million, with net loan-to-value below 13%.

    Concerns

    2

    • Fourth quarter vessel expenses were higher than guidance due to timing of stores and spares at year-end, though specific quantification of the overage was not provided.

    • The EIA and IEA are forecasting oil supply to exceed demand in 2026, which could potentially impact tanker demand, though the market has not yet reacted with contango.

    Guidance & targets

    3
    CategoryTargetConfidence
    Oil demand growth
    more than 1 million barrels per day
    high materiality
    High
    Spot cash breakeven rate
    $14,800 per day
    high materiality
    High
    G&A expenses
    increased by a few million dollars per quarter
    medium materiality
    High

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    Crude
    The crude segment outperformed products in Q4 FY25, with VLCCs leading tanker earnings.
    TCE Revenues: outperformed products in Q4
    		————

    Operational metrics

    32
    Net income
    $128 million
    Q4 FY25

    Reported net income for the fourth quarter.

    Adjusted net income
    $122 million
    Q4 FY25

    Adjusted net income for the fourth quarter, excluding special items.

    Adjusted EBITDA
    $175 million
    Q4 FY25

    Adjusted EBITDA for the fourth quarter.

    Quarterly dividend
    $2.15largest ever
    Q4 FY25

    Declared largest ever quarterly dividend, representing an 87% payout ratio of Q4 adjusted net income.

    Total returns to shareholders
    over $1 billion
    since 2020

    Cumulative returns to shareholders since 2020.

    Dividend payout ratio streak
    at least 75%
    6 consecutive quarters

    Sixth consecutive quarter with a payout ratio of at least 75%.

    Share repurchase program
    $50 million
    until end of 2026

    Share repurchase program in place as an addendum to payout ratio.

    Total liquidity
    $724 million
    end of Q4 FY25

    Total liquidity at the end of the fourth quarter.

    Cash and equivalents
    $167 million
    end of Q4 FY25

    Cash balance at the end of the fourth quarter.

    Undrawn revolver capacity
    $557 million
    end of Q4 FY25

    Undrawn revolving credit facility capacity at the end of the fourth quarter.

    Net loan-to-value
    below 13%
    end of Q4 FY25

    Net loan-to-value ratio at the end of the fourth quarter.

    Spot cash breakeven rate
    less than $15,000
    FY26

    Company-wide blended average spot cash breakeven rate for 2026.

    Oil demand growth projection
    more than 1 million
    2026 and 2027

    Projected oil demand growth for 2026 and 2027.

    OPEC+ production increases
    1 million
    ongoing

    OPEC+ is supplementing non-OPEC production increases by unwinding their own previous cuts.

    Total liquidity
    $985 million
    start of Q4 FY25

    Total liquidity at the beginning of the fourth quarter.

    Cash and equivalents
    $413 million
    start of Q4 FY25

    Cash balance at the beginning of the fourth quarter.

    Undrawn revolving capacity
    $572 million
    start of Q4 FY25

    Undrawn revolving capacity at the beginning of the fourth quarter.

    Proceeds from vessel sales
    $36 million
    Q4 FY25

    Proceeds received from the sale of vessels in Q4 FY25.

    LR1 newbuilding installments
    $6 million
    Q4 FY25

    Installments paid for LR1 newbuildings in Q4 FY25, net of financing.

    Lease repayments
    $258 million
    Q4 FY25

    Repayment of sale leasebacks on 6 VLCCs in Q4 FY25.

    Dividend payment
    $42 million
    Q4 FY25

    Dividend paid in December.

    Net decrease in cash
    $261 million
    Q4 FY25

    Net decrease in cash during the fourth quarter.

    Net debt
    under $400 million
    end of Q4 FY25

    Net debt at the end of the fourth quarter.

    Gross debt
    $578 million
    end of 2025

    Gross debt at the end of 2025.

    Mandatory debt repayments
    $30 million
    through end of 2026

    Mandatory debt repayments through the end of 2026.

    Cost of debt
    below 6%
    ongoing

    Cost of debt is below 6% due to 100% fixed or hedged debt.

    Unencumbered vessels
    31
    end of Q4 FY25

    Number of unencumbered vessels.

    Blended average spot TCE
    $50,900
    Q1 2026

    Blended average spot TCE fixed for Q1 2026, covering 71% of expected revenue.

    Dry dock and capital expenditures
    $23 million
    Q4 FY25

    Dry dock and capital expenditures in Q4 FY25.

    VLCC rates
    —
    current

    Analyst mentioned VLCCs hitting '$200,000 level' but management did not confirm or quantify this specific rate, only acknowledged strong market.

    G&A expenses increase
    a few million dollars
    FY26

    Projected increase in G&A expenses for 2026 due to Tankers International consolidation.

    Other revenues (TI commissions)
    —
    FY26

    New revenue stream from Tankers International commissions, offsetting G&A increase. Not quantified.

    Industry KPIs

    1
    MetricValueDetails
    FCF shareholder distributions$135 millionUSD

    Orderbook & backlog

    1
    Share repurchase program authorization$50 millionQ4 FY25

    Program in place until the end of 2026.

    Deals & partnerships

    4
    Tankers InternationalAcquiring remaining 50% interest in the leading VLCC pool and expanding with a Suezmax platform.

    Consolidating Tankers International to expand its VLCC pool leadership and add a Suezmax platform.

    VariousDisposing of 10 older vessels with an average age of 18 years.$131 million

    Sold 10 older vessels (average age 18 years) for $131 million in Q4 FY25.

    VariousSelling 7 older vessels.$216 million

    Sold another 7 older vessels for $216 million so far in 2026.

    ShellContract for 3 VLCCs with a profit share element.

    Three VLCCs on contract to Shell with a profit share mechanism based on spot market performance.

    Capital programs

    1
    LR1 Newbuilding Programunderway
    Period spend: $6 million

    Remaining 4 LR1s to deliver in 2026, completing the newbuild program. $30 million of Seaways cash needed for delivery.

    Risks & headwinds

    3
    Oil supply exceeding demand2026

    EIA and IEA forecasting supply to exceed demand in 2026

    Mitigation: Market has not reacted with contango or drop in absolute oil price; China stocking up; geopolitical intensity remains strong.

    Geopolitical environmentongoing

    US-Iran tensions elevated, Russia-Ukraine conflict unresolved, upheaval of Venezuelan government and oil production

    Mitigation: Company constantly works through scenarios; geopolitical intensity on tankers remains strong, providing support for compliant fleet.

    Sanctions enforcementongoing

    Affecting business, 150+ VLCCs on OFAC sanctions list

    Mitigation: Provides support for the compliant fleet; compliant fleet benefits from reduced effective supply.

    What to watch in Q1 FY26

    5

    Dividend payout ratio

    next quarter
    Current87%
    TargetMaintain high payout ratio

    Why it matters

    The company achieved its highest ever dividend payout ratio this quarter, and management indicated a continued focus on maximizing shareholder returns through dividends.

    Again, we focus first on cash, but we know we're always going to lean into increasing the dividend, and we know people want to know how that is as a payout ratio. So yes, it's the highest yet.

    Q&A highlights

    8

    Why are MR rates so strong in Q1 2026, given refinery margins are only at 5-year averages?

    Strong MR rates are driven by geopolitical factors, specifically the EU no longer importing refined Russian product from India and Turkey, shifting demand to Atlantic Basin sources like the US Gulf. Additionally, challenging winter weather causing port delays exacerbated supply issues.

    “Like you said, it's less refined product coming in from India that came from Russian crude. So that was previously coming in on bigger product carriers. So that's the benefit of the MRs. And also when you see less refined products coming from Turkey, which was previously refined from Russian crude, that's all coming from Atlantic -- a lot of that's coming from Atlantic Basin. So that's U.S. Gulf exports back to Europe, which is really helping the MRs.”

    asked by Liam Burke · answered by Derek Solon

    2 min read5 chapters

    Detailed Narrative

    01

    Capital Allocation Strategy and Shareholder Returns

    International Seaways announced its largest ever quarterly dividend of $2.15 per share, bringing total shareholder returns since 2020 to over $1 billion. This dividend represents an 87% payout ratio of Q4 adjusted net income, marking the sixth consecutive quarter with a payout ratio of at least 75%. The company maintains a $50 million share repurchase program until the end of 2026, emphasizing a consistent and balanced capital allocation approach focused on fleet renewal, balance sheet optimization, and shareholder returns.

    02

    Fleet Renewal and Modernization

    The company continues its fleet renewal strategy, taking delivery of the Seaways Gibbs Hill, a high-spec scrubber-fitted VLCC, for $119 million in Q4 FY25. This was funded by disposing of 10 older vessels (average age 18 years) for $131 million. In early 2026, an additional 7 older vessels were sold for $216 million. The remaining 4 LR1 newbuilds are expected to deliver in 2026, completing the newbuild program, which is fully financed with only $30 million of Seaways cash needed.

    03

    Balance Sheet Strength and Liquidity

    International Seaways ended Q4 FY25 with strong liquidity of $724 million, comprising $167 million in cash and $557 million in undrawn revolver capacity. The company repaid $258 million in leases in Q4, following a $250 million bond issuance in Q3 that unencumbered 6 VLCCs and lowered debt costs. Net loan-to-value is below 13%, and the spot cash breakeven rate is less than $15,000 per day, indicating a robust financial position to navigate market conditions.

    04

    Tanker Market Dynamics and Outlook

    Demand fundamentals for tankers are considered solid, with oil demand growth projected at over 1 million barrels per day for both 2026 and 2027. Geopolitical factors, including US-Iran tensions and the Russia-Ukraine conflict, continue to impact the oil market. On the supply side, sanctions enforcement is supporting the compliant fleet, and the order book remains well below replacement levels, with removal candidates (vessels 18+ years old or sanctioned) significantly outnumbering new deliveries, suggesting a continued up-cycle for tanker shipping.

    05

    Consolidation of Tankers International

    The company is consolidating Tankers International, the leading VLCC pool, by acquiring the remaining 50% interest. This expansion includes a Suezmax platform, aiming to enhance commercial exposure and capitalize on market strength. This strategic move is expected to contribute to the company's financial results, with associated increases in G&A expenses offset by new 'other revenues' from TI commissions.

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