Overseas Shipholding Group, Inc. (NYSE: OSG), a market leader in providing energy transportation services, today reported results for the second quarter and six months of fiscal 2011 ended June 30, 2011.
For the quarter ended June 30, 2011, the Company reported TCE 1 revenues of $207.3 million, an 11% decline from $231.7 million in the 2010 quarter. The decline in TCE revenues was primarily due to lower average spot rates earned in the Company’s International crude classes except for Aframax lightering as well as much higher fuel prices that were not recoverable in the marketplace. TCE revenues increased in the Company’s International Products and U.S. Flag units on net fleet growth and improved TCE results for the U.S. Flag unit. Revenue days increased quarter-over-quarter by 594 days, or 6%, primarily as a result of net growth in the International Product Carrier fleet centered in the MR class and in the U.S. Flag fleet. Net loss (Loss 2) for the quarter ended June 30, 2011 was $37.3 million, or $1.24 per diluted share, compared with a Loss of $37.9 million, or $1.26 per diluted share, in the same period in 2010. Adjusted for special items that increased the Loss by $1.2 million, or $0.04 per diluted share, the second quarter Loss was $36.1 million, or $1.20 per diluted share, compared with a Loss of $10.1 million, or $0.34 per diluted share, in the second quarter of 2010. Details on Special Items are provided later in this press release.
Morten Arntzen, President and CEO stated, “International flag tanker rates remained under pressure in the second quarter, generating a disappointing quarterly result for OSG. The closure of Japanese refineries in the aftermath of the March earthquake and tsunami reduced crude imports into Japan as well as activity in the regional products trade, while an unexpectedly high and persistent level of refinery maintenance activity in the Atlantic basin refineries further impacted rates negatively. The surprise decision by the IEA to release 60 million barrels from global strategic petroleum reserves temporarily took the wind out of the tanker markets and further delayed the recovery in our International markets. On a positive note, our U.S. Flag business is delivering improved results.”