In 2024, we recorded our second best annual financial results since becoming an independent public company in 2016, as the 2024 results trailed only the very strong results achieved during 2023. Shipping revenues and TCE Revenues for 2024 were $1.0 billion and $0.9 billion, respectively. Approximately 53% of our TCE Revenues were generated from our Product Carriers segment and 47% from our Crude Tankers segment. Income from vessel operations decreased by $160.2 million to $455.2. million in 2024, from $615.4 million in 2023, primarily driven by lower average daily rates across most of INSW’s fleet sectors. We achieved an Adjusted EBITDA (see Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations for definition) of $583.3 million in 2024 compared to $723.8 million in 2023.
In addition, we continued to further enhance our strong balance sheet by increasing total liquidity to $632.2 million from $601.2 million at the end of 2023, and ended the year with 45% (i.e., 35 vessels) of our fleet unencumbered, a net loan to value ratio of 15.5%, and a net debt-to-capital ratio of 22.2%. We made approximately $338.8 million in capital investments for vessel and other property purchases, vessel improvements, vessel construction and drydocking. We also returned capital to our shareholders through cash dividends totaling $284.4 million and $25.0 million in repurchases of our common stock.
During 2024, we continued to focus on (i) maximizing our fleet’s earning potential through safe and reliable operations, opportunistic charter-ins/charter-outs, and sales and purchases of vessels, (ii) building on our track record as a disciplined capital allocator, and (iii) executing transactions that would ultimately unlock the value of our shares to investors.
We executed these goals during 2024 by:
| ● | Building on our track record as a disciplined capital allocator |
| o | In a cyclical business such as ours, we believe that capital allocation is not a formula embedded in a financial metric but levers that we pull at the right times in the cycle. We have a track record of buying vessel assets at low points, voluntarily decreasing our leverage and returning a substantial amount of cash to shareholders. |
| o | We paid out $309.4 million in returns to our shareholders during 2024. |
| ● | Maintaining our fleet optimization program: |
| o | We sold one 2009-built MR and two 2008-built MRs, resulting in net proceeds of approximately $72 million after fees and commissions. We recognized total gains of approximately $41.3 million on these sales. |
| o | We purchased four 2015-built MRs and two 2014-built MRs en bloc for an aggregate price of $232 million. Eighty-five percent of the purchase price consideration was funded from available liquidity and the balance of fifteen percent with the issuance of the Company’s common stock. |
| o | We declared options to build two additional dual-fuel ready LR1 product carriers at the same shipyard where our other four newbuild LR1s were contracted. The six LR1s are contracted for delivery between the second half of 2025 and the third quarter of 2026. The total construction cost for the vessels will be approximately $359 million, which will be paid for through a combination of long-term financing and available liquidity. |
| o | We opportunistically locked in $83.2 million of minimum revenues (before reduction for brokerage commissions) on non-cancelable time charters for one LR2 and two MRs with charter expiry dates ranging from January 2027 to April 2027. At December 31, 2024, the remaining future minimum revenues under these charters (approximately $69.0 million), when aggregated with the remaining future minimum revenues (excluding any applicable profit share) under time charters entered into in previous years, totaled approximately $309.6 million. |
| o | We entered into an agreement under which we agreed to sell one 2010-built VLCC and one 2011-built VLCC for an aggregate sales price of $116.6 million and purchase three 2015-built MRs from the same counterparty for an aggregate purchase price of $119.5 million, resulting in a net cash outflow of $2.9 million. One of the MRs was delivered to the Company on December 30, 2024 and the sale and purchase transactions on the four remaining vessels closed between January and February 2025. |
| ● | Executing a number of liquidity enhancing, deleveraging and financing diversification initiatives, including: |
| o | We prepaid the outstanding principal balance of $20.3 million and terminated the ING Credit Facility. |
| o | We entered into an agreement to amend and extend our existing $750 Million Credit Facility, under which we had a remaining term loan balance of $94.6 million and undrawn revolver capacity of $257.4 million at March 31, 2024. The new agreement consists of a $500 million revolving credit facility (the “$500 Million Revolving Credit Facility”) that matures in January 2030. By entering into the $500 Million Revolving Credit Facility we have (i) eliminated $19.5 million in mandatory quarterly debt repayments since the balance drawn on closing is not required to be repaid until maturity, (ii) reduced cash break evens by over $3,000 per day, (iii) extended the maturity profile of the facility from 2027 to 2030, and (iv) reduced future interest expense through a margin reduction of over 85 basis points. |
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Liquidity and Sources of Capital,” for further details on these financing transactions.
