International Seaways, Inc.

Jennifer Purser, Good morning, thank you for attending today's international seaways first quarter 2024 results call my name is Jennifer and i'll be your moderator today. Jennifer Purser, All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you'd like to ask a question press star one on your telephone keypad. Jennifer Purser, I would now like to turn the conference over to CEO and general counsel James small James please proceed.

James Small, Thank you, Jennifer. Good morning, everyone, and welcome to International Seaway's earnings call for the first quarter of 2024. Before we begin, I would like to start off by advising everyone with us on the call today of the following. During this call, management may make forward-looking statements regarding the company or the industry in which it operates. Those statements may address, without limitation, the following topics. Outlooks for the crude and product tanker markets and changes in trading patterns. Forecasts of world and regional economic activity. and of the demand for and production of oil and other petroleum products, the effects of ongoing and threatened conflicts around the globe, the company's strategy, our business prospects, expectations regarding revenues and expenses, including vessel, charter hire, and G&A expenses, estimated bookings, TCE rates, and or capital expenditures for periods during 2024 or in any other period, projected scheduled dry dock and off-hire days, purchases and sales of vessels, construction of new build vessels, and other investments, the company's consideration of strategic alternatives, anticipated and recent financing transactions, and any plans to issue dividends, the company's relationships with its stakeholders, the company's ability to achieve its financing and other objectives, and other economic, political, and regulatory developments globally. Any such forward-looking statements take into account various assumptions made by management based on a number of factors. including management's experience and perception of historical trends, current conditions, expected and future developments, and other factors that management believes are appropriate to consider in the circumstances. Forward-looking statements are subject to risks, uncertainties, and assumptions, many of which are beyond the company's control, which could cause actual results to differ materially from those implied or expressed by the statements. Factors, risks, and uncertainties that could cause international COAs' actual results to differ from expectations include those described in our annual report on Form 10-K for 2023, our report on Form 10-Q for the first quarter of 2024, and in other filings that we have made or in the future may make with the U.S. Securities and Exchange Commission. Now, let me turn the call over to our President and Chief Executive Officer, Ms. Lois LeBrock. Lois?

Thank you very much, James. Good morning, everyone. Thank you for joining Seaway's earnings call for the first quarter of 2024. You can find our presentation on our website in the investor relations section. Starting on slide four, our results for the first quarter represent our eighth consecutive quarter of strong earnings. Net income was $145 million, $2.92 per diluted share. This quarter came in higher than our prior two quarters. Adjusted EBITDA was over $190 million. On the upper right-hand slide, we highlight enhancements that we have made to our already strong balance sheet. At the end of the first quarter, we had $626 million in total liquidity, including $411 million of undrawn revolver. Now, we have consolidated our term loans and converted them into more revolver capacity. In the execution of this facility, we have saved about $80 million per year in mandatory repayments, or about $3,000 per day across our spot. For some perspective on how C-Ways have evolved our balance sheet, two years ago in 2022, we had mandatory debt repayments of $180 million. Now, for the forward 12 months, our mandatory payments are under $50 million. This is tremendous work by Jeff and his finance team, along with our valued relationships with our bankers. This gives us extensive flexibility embedded in the balance sheet. As a result of these efforts, our spot vessels need to earn $13,600 per day to break even. With 52% of our spot days booked in the second quarter, it looks like we will generate a significant amount of free cash flow, again, in the second quarter. We now have $559 million in undrawn revolver capacity, putting Seaways in a position to respond to market opportunities. On the lower left-hand slide, we give detail on our fleet upgrading progress. In the last couple of weeks, we have taken delivery of three of six EcoMRs that we purchased in February. The remaining ships deliver before the end of May. The six vessels are under contract for $232 million in aggregate. We also declared our options for an additional two dual fuel ready LR1s expected to deliver in the third quarter of 2026. Overall, our program of building six LR1s has the first two deliveries in the second half of next year. The lower right-hand slide outlines our continued return to shareholders. Our strong earnings and our strong balance sheet allow us to return a substantial portion of our net income to our shareholders. Today we declared a combined dividend of $1.75 per share. This represents 60% of our adjusted net income and another quarter of a double-digit yield for our shareholders. Over the last 12 months, we have returned an actualized greater than 13% return. Here at Seaway, we are focused on a balanced approach to capital allocation. This continues to create value for the company and our shareholders. We utilize the cash we're generating in this upcycle to strengthen our balance sheet and put us in position for the next opportunities. We're now renewing our fleet by acquiring these six more modern eco MRs. We are building vessels for our niche premium LR1 trade, and we are selling some older vessels. These older MRs have more than paid for themselves since acquiring them in 2021. We're able to execute each of these facets while still remaining double-digit yield to our shareholders. On slide five, we've updated our standard set of bullets on tanker demand drives with the positive green up arrows, neutral black dashes, and red arrows for negative tanker factors. Touching on the highlights, oil demand continues to grow with estimates of growth averaging around 1.5% for this year of 2024, year over year, with similar projections for 2025. This represents an above average demand growth level, specifically for seaborne transportation. Existing regional imbalances of crude oil production and the availability of refined products contrasted with distant strong demand centers makes a tanker market. In the bottom chart, we highlight the difference between crude oil production, expected throughput, and product demand by region. Both Europe and Asia are structurally short crude oil, which they source from the Americas, Middle East, Russia. With the enforcement of sanctions on Russian oil tightening, the disruption of traditional routes has enhanced ton-mile demand and supported the tanker market. On the refined marked product sector, most regions are short, specific, refined products, except for the Middle East and Russia. This creates a lively products trade as charters continue to take advantage of arbitrage plays to meet demand in different regions for specific grades. It remains very constructive that commercial inventories are low throughout the world. Continued disruptions within the tanker market, on top of strong phenomenon underpin increased need for seaborne transportation. Slide six. The supply side has seen some ordering with our tanker order book now at 9% of the existing total tanker fleet. You can see this in the lower left-hand chart. These new orders stretch into 2027. as shown in the chart on the lower left-hand corner of the slide. These vessels that are on order will replace older ships turning 20 plus years old that at the very least would be removed from commercial trading. As a result, the average fleet age will rise in the next few years at a faster rate than it had over the prior 10. Generally, older ships have less efficiency and lower utilization. With an increasing percentage of the fleet falling into this category, the industry will put the new ships to work covering the increasing seaborne demand. Overall, this sets the stage for a strong upcycle over the next few years, and seaways remain well positioned to capitalize on these market conditions. You can count on seaways to utilize our balanced capital allocation approach to renew our fleet and adapt to industry conditions with a strong balance sheet while returning to shareholders. I'm now going to turn it over to our CFO, Jeff Pribor, to provide financial review. Jeff?