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International Seaways (INSW) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Industrials· Feb 26, 2026

Source: earnings call transcript

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

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

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

INSW operating KPIs by quarter

INSW operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Dec 2025 Q4 FY25 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.

Orderbook & backlog

Share repurchase program authorization $50 million Q4 FY25

Program in place until the end of 2026.

Deals & partnerships

Tankers International Acquiring 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.

Various Disposing 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.

Various Selling 7 older vessels. $216 million

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

Shell Contract 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

LR1 Newbuilding Program underway
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

Oil supply exceeding demand 2026

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 environment ongoing

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 enforcement ongoing

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

Dividend payout ratio

next quarter
Current 87%
Target Maintain 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.

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

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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