Overseas Shipholding Group
Inc.
(
OSG
), the second largest independent oil tanker company in the world,
reported weak financial results for the second quarter of 2012 with
widening losses. The company suffered losses for thirteen straight
quarters.
Quarterly GAAP net loss was $55.3 million or $1.83 per share
compared with a net loss of $37.3 million or $1.24 per share in the
prior-year quarter. Second quarter adjusted earnings per share of a
loss of $1.52 was way below the Zacks Consensus Estimate of a loss
of $1.05.
Quarterly Shipping revenue was nearly $291.4 million, up 7.2%
year over year. Second-quarter Time Charter Equivalent (TCE)
revenue was $210 million, up 1.3% year over year, beating the Zacks
Consensus Estimate of $204 million. TCE revenue represents Shipping
revenue excluding Voyage expenses.
Segment Shipping Revenue
Quarterly Pool revenue was approximately $69.9 million,
remaining same year over year. Time and bareboat charter revenue
was also $69.9 million, up 8.8% year over year. Voyage charter
revenue was $151.6 million, up 10% year over year.
TCE Revenue in Details
Quarterly TCE revenue for the International Crude Oil Tankers
segment was $79 million, up 4% year over year. Average spot TCEs
fell 30% year over year to $10,500/day, primarily due to a sharp
reduction of International Flag MR spot rates. International
Product TCE revenue was $44.2 million, down 14% year over year.
U.S. Flag TCE revenue was $83.8 million, up 10% year over year.
Operating Expenses
Total operating expenses in the second quarter of 2012 was
$321.8 million, up 8.8% year over year. Voyage expenses shot up
26.3% year over year while Vessel expense remains same year over
year. Charter hire expenses decreased 2.1% year over year. General
& Administrative expense was down 2.9% year over
year.
Cash Flow & Liquidity
During the first half of 2012, Overseas Shipholding generated
$19.6 million of cash for operations compared with $6.6 million in
the prior-year period. Free cash flow, in the first half of 2012,
was a negative $20.6 million compared with a negative $106.3
million in the prior-year period.
At the end of the second quarter of 2012, Overseas Shipholding
had $226.6 million of cash & marketable securities compared
with $54.9 million at the end of 2011. Total debt at the end of the
reported quarter was $2,244.7 million, compared with $2,065.9
million at the end of 2011. At the end of the second quarter of
2012, debt-to-capitalization ratio was 0.57 compared with 0.57 at
the end of 2011.
Our Recommendation
Overseas Shipholding mainly competes with
Frontline Ltd.
(
FRO
) and
Teekay Corp.
(
TK
). We maintain our long-term Neutral recommendation on Overseas
Shipholding. Currently, it holds a short-term Zacks #3 Rank
(Neutral) on the stock.
FRONTLINE LTD (FRO): Free Stock Analysis Report
OVERSEAS SHIPHO (OSG): Free Stock Analysis
Report
TEEKAY CORP (TK): Free Stock Analysis Report
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