Overseas Shipholding Group, Inc. (NYSE: OSG), a market leader in providing energy transportation services, today reported results for the third quarter and nine months of fiscal 2011 ended September 30, 2011.
For the quarter ended September 30, 2011, the Company reported TCE 1 revenues of $186.2 million, a decline of $22.4 million, or 11%, from $208.6 million in the 2010 quarter. TCE revenues declined primarily due to lower average spot rates in each of the Company’s International Crude sectors and higher fuel costs. TCE revenues in the Company’s International Products segment were little changed as an increase in revenue days on net fleet growth was offset by higher spot exposure and lower spot and fixed rates. U.S. Flag revenues increased quarter-over-quarter primarily due to the delivery of three newbuild product carriers and significantly higher Delaware Bay lightering volumes. Revenue days increased by 641 days, or 7%, primarily as a result of new deliveries of International and U.S. Flag product carriers. Net loss (Loss 2) for the quarter ended September 30, 2011 was $71.1 million, or $2.35 per diluted share, compared with a Loss of $31.8 million, or $1.06 per diluted share, in the same period in 2010. Adjusted for special items that increased the Loss by $4.6 million, or $0.15 per diluted share, the third quarter Loss was $66.5 million, or $2.20 per diluted share, compared with a Loss of $26.8 million, or $0.89 per diluted share, in the third quarter of 2010. Details on Special Items are provided later in this press release.
Morten Arntzen, President and CEO stated, “Our International flag tanker markets deteriorated further in the third quarter as new deliveries outpaced the market’s ability to absorb them and our Asian customers continued to substitute shorter-haul Middle East crudes at the expense of West African crudes. Economic and political uncertainty continue to run high across the globe, with European sovereign debt issues and an uncertain fiscal and monetary picture in Washington impacting consumer and business confidence. The potential fallout has prompted analysts to trim their global growth and oil demand forecasts. This has also resulted in much tighter lending markets for the shipping industry. As a result, new tanker orders have fallen dramatically this year and the orderbook is now at its lowest level in six years. This is encouraging, as continued ordering discipline combined with earlier scrapping of vintage double hull tankers will be required to bring about a recovery in our crude transportation markets.”