Overseas Shipholding Group reports 2019 financial results

Mar 13, 2020

Tampa, FL - Overseas Shipholding Group, Inc. (the “Company” or “OSG”), a provider of energy transportation services for crude oil and petroleum products in the U.S. Flag markets, today reported results for the fourth quarter and full year 2019.

Highlights

Net income for the fourth quarter was $11.0 million, or $0.12 per diluted share, compared with net loss of $5.2 million, or $(0.05) per diluted share, for the fourth quarter 2018.
Net income for the full year 2019 was $8.7 million, or $0.10 per diluted share, compared with $13.5 million, or $0.15 per diluted share for the full year 2018.
Shipping revenues for the fourth quarter 2019 were $98.4 million, up 10.3% compared with the fourth quarter 2018. Shipping revenues for the full year 2019 were $355.5 million, down 2.9% compared with the full year 2018.
Time charter equivalent (TCE) revenues(A), a non-GAAP measure, for the fourth quarter and full year 2019 were $93.8 million and $335.1 million, up 17.3% and 2.6%, respectively, compared with the same periods in 2018.
Fourth quarter and full year 2019 Adjusted EBITDA(B), a non-GAAP measure, were $33.7 million and $91.6 million, up 45.8% and 5.4%, respectively, from $23.1 million and $87.0 million in the same periods in 2018.
Total cash(C) was $41.7 million as of December 31, 2019.
On December 11, 2019, we extended the terms on four of our bareboat charters ending December 2020 for additional three-year periods to December 2023.
On March 12, 2020, subsidiaries of the Company completed the purchase of three U.S.-flagged crude oil carrier vessels, the Alaskan Explorer, Alaskan Legend, and Alaskan Navigator from BP Oil Shipping Company USA and BP AMI Leasing Inc. (BP) and have entered into a bareboat charter with BP for a fourth vessel, the Alaskan Frontier. In connection with these transactions, OSG also completed the acquisition of Alaska Tanker Company LLC (ATC), the operator of the vessels, making ATC a wholly owned subsidiary of OSG.

Mr. Sam Norton, President and CEO, stated, “We are extremely pleased with the results for the fourth quarter of last year. Revenue, EBITDA and earnings all came in at levels that portend continued progress in fulfilling the promise of our business strategy. For some time, we have been expressing confidence that the mix of our revenue streams has positioned OSG to generate stable revenues from our niche businesses while capturing the upside of the ongoing market recovery. The emerging strength of our conventional tanker earnings contribution is now evident. Combined with the expectation of continued stability from our other revenue streams, we have reason to believe that the long-anticipated return to sustained profitability is now at hand.”

Mr. Norton added, “Looking forward, the acquisition of Alaska Tanker Company and the three large crude oil tankers operated by that company will have a profoundly positive impact on our 2020 results. With the transaction having been completed yesterday, we now expect an incremental EBITDA contribution of $15mm over the balance of this year, and more than $20mm for the first full year of operations in 2021. These transactions allow us to build on our strong Jones Act franchise and present an exciting opportunity for OSG - one that we are looking forward to delivering on.”

A, B, C Reconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release starting on Page 8.

Fourth Quarter 2019 Results

Shipping revenues were $98.4 million for the quarter, up 10.3% compared with the fourth quarter of 2018. TCE revenues for the fourth quarter of 2019 were $93.8 million, an increase of $13.9 million, or 17.3%, compared with the fourth quarter of 2018, primarily due to an increase in average daily rates earned and decreased spot market exposure.

Operating income for the fourth quarter of 2019 was $18.7 million compared to operating income of $7.4 million in the fourth quarter of 2018.

Net income for the fourth quarter was $11.0 million, or $0.12 per diluted share, compared with net loss of $5.2 million, or $(0.05) per diluted share, for the fourth quarter 2018.

Adjusted EBITDA was $33.7 million for the quarter, an increase of $10.6 million compared with the fourth quarter of 2018, driven primarily by the increase in TCE revenues.

Full Year 2019 Results

Shipping revenues were $355.5 million for the full year 2019, down 2.9% compared with the full year 2018. TCE revenues for the full year 2019 were $335.1 million, an increase of $8.4 million, or 2.6%, compared with the full year 2017. The decrease in shipping revenues primarily resulted from three fewer vessels in operation during most of 2019 compared to 2018. The increase in TCE revenues primarily resulted from an increase in average daily rates earned and decreased spot market exposure.

Operating income for the full year 2019 was $33.4 million compared to operating income of $27.4 million for the full year 2018.

Net income for the full year 2019 was $8.7 million, or $0.10 per diluted share, compared with net income of $13.5 million, or $0.15 per diluted share, for the full year 2018. The decrease was due to the recognition of $21.7 million of previously deferred tax benefits upon completion of an Internal Revenue Service examination in the third quarter of 2018.

Adjusted EBITDA was $91.6 million for the full year 2019, an increase of $4.7 million compared with the full year 2018, driven primarily by the increase in TCE revenues.