The Board of Directors of d’Amico International Shipping S.A., a leading international marine transportation company operating in the product tanker market, examined and approved the Company’s draft 2024 full year statutory and consolidated financial results.
MANAGEMENT COMMENTARY
Carlos Balestra di Mottola, Chief Executive Officer of d’Amico International Shipping commented:
“I am proud to report another robust performance for DIS in 2024, with a consolidated net profit of US$188.5 million, closely trailing our record profit of US$ 192.2 million from the previous year. Our daily spot rate improved to US$ 33,871, surpassing 2023’s rate of US$ 32,873, reflecting continued strong demand for our services despite a still robust but less exuberant freight market later in the year. Furthermore, DIS successfully covered 41.5% of its employment days at an average daily TCE rate of US$ 27,420 in 2024, up from 29.8% at US$ 28,107 in the previous year. Consequently, our total blended daily TCE (spot and time- charter) was of US$ 31,195 in 2024, aligned with US$ 31,451 in 2023.
In 2024, DIS thrived in a vibrant freight market, driven by limited fleet growth, growing global oil trade, and numerous trade disruptions. Notably, incidents in the Red Sea and Gulf of Aden required us to reroute vessels around the Cape of Good Hope, significantly increasing travel distances. Additionally, the ongoing conflict in Ukraine and related EU sanctions reshaped oil trade flows, reducing Russian oil shipments to the EU while increasing exports to more distant locations such as Asia and South America, prompting Europe to source more oil from the US, the Middle East, and Asia. These changes significantly extended the average distances sailed by our product tankers.
Looking ahead, potential resolutions to the conflicts in Ukraine and Gaza could impact market dynamics. A peace agreement in Ukraine might lead to lifting of sanctions against Russia, and a resolution in Gaza could entail a normalization of Suez Canal transits, potentially reducing ton-mile demand for our vessels. However, we anticipate mitigating market factors, such as higher European imports of refined products from the Middle East and Asia if Suez Canal transits resume. Furthermore, a peace agreement in Ukraine might not entail a lifting of sanctions on Russia by Europe and should accelerate the scrapping of an ageing shadow fleet, helping to stabilize the market. Additionally, more stringent measures by the US on Iranian oil exports are likely to generate a replacement of the lost barrels from this country with oil from non- sanctioned countries, benefiting the VLCC market with positive spillovers for the other tanker sectors.
Geopolitical dynamics have undoubtedly shaped the freight market recently, yet the industry’s fundamentals remain robust and are poised to continue bolstering our market. Oil demand continues growing at a healthy clip of 0.9 million barrels per day in 2024, with the International Energy Agency (IEA) forecasting a further increase of 1.1 million barrels per day this year. Emerging markets, especially India and Brazil, are set to be significant contributors to this growth. In terms of products, while jet fuel dominated the demand increase last year, both naphtha and jet fuel are projected to be the key drivers in 2025. Refined product volumes also saw an increase, with global refinery throughput rising by 0.5 million barrels per day in 2024 to 82.7 million barrels per day, driven largely by robust refining activities in the United States and new capacity in the Middle East and Africa.
According to the IEA, crude throughput is expected to grow by an additional 0.6 million barrels per day in 2025 to 83.3 million barrels per day, supported by stronger non-OECD crude runs, though closures in the Americas and Europe may affect OECD volumes. This continuing trend of expansion in refinery capacity east of Suez should continue supporting ton-mile demand growth for our vessels.
On the supply side, newbuild orders for tankers rose significantly over the last two years, with the current orderbook for MRs and LR1s reaching 15.1% of vessels on water (measured in dwt), as at the end of February 2025. While vessel deliveries will accelerate from the second half of this year, they are spread over several years. Furthermore, considering the strong linkages between the different tankers sectors, the orderbook across all tankers (including product and crude carriers), which stands at a lower 13.4% of vessels on water, as at the end of February 2025, might provide a more reliable indicator of the market’s supply fundamentals.
Additionally, the fleet is also ageing rapidly, with 17.0% of the MR and LR1 fleet already over 20 years old (17.2% of the entire tanker fleet), and 51.0% over 15 years (41.3% of the entire tanker fleet), as at the same date. This ageing fleet will reduce fleet productivity and eventually lead to an increase in vessel demolitions, with an acceleration anticipated in case of a market downturn or a resolution to the conflict in Ukraine, which would severely limit employment opportunities for such older tonnage.
In 2024, with the objective of continuing to control a young and efficient fleet DIS was very active in the sale and purchase market. We began by selling the MT Glenda Melanie, a 2010-built MR and the oldest vessel in our fleet, at an attractive price of US$ 27.4 million. In April 2024, we also ordered four new LR1 vessels from a reputable Chinese shipyard, with deliveries expected in the second half of 2027. These highly efficient, environmentally friendly vessels will considerably strengthen our presence in the LR1 segment, which we anticipate will generate strong returns in the coming years. We also continue investing in new technological solutions and operational measures to make our vessels as efficient as possible. Additionally, also with the objective of rejuvenating our fleet, we exercised purchase options on four top-class vessels built in Japan, which we had been time-chartering-in since their construction. These acquisitions introduced modern and eco-friendly MR vessels into our owned fleet at a cost substantially below their current market value, further lowering our break-even costs.
Thanks to our robust financial structure, we could also focus on increasing shareholder returns through both share buybacks and dividends. In addition to an annual gross dividend of US$ 30.0 million distributed in Q2 2024, relating to the Company’s 2023 results, the Company paid an interim gross dividend of US$ 30.1 million in Q4 2024, and repurchased shares totaling US$ 10.3 million throughout the year. Today, DIS’ Board of Directors proposed an annual gross dividend distribution of around US$ 35.0 million to the upcoming Annual Shareholders’ Meeting, which would bring DIS’ total payout, combining gross dividends and share buybacks, to around 40% of the Company’s consolidated net result in 2024.
I extend my deepest appreciation to our teams, both at sea and onshore, whose dedication and professionalism underpins our achievements. I am also grateful to our shareholders for their steadfast trust and support. In recent years, we have diligently built a foundation for DIS’ continuing success. Through a modern and efficient fleet, a skilled and cohesive team, and a robust balance sheet, we are well equipped to confront future challenges and seize forthcoming opportunities, generating enduring value for our shareholders.”
Federico Rosen, Chief Financial Officer of d’Amico International Shipping commented:
‘‘DIS delivered another strong financial performance in 2024, reporting a net profit of US$ 188.5 million, closely approaching the record net profit of US$ 192.2 million in 2023. Our EBITDA for the year was of US$260.9 million, achieving an EBITDA margin of 70.2% on total net revenue, while our operating cash flow was robust at US$ 258.7 million.
Throughout 2024, we further solidified our financial structure, underpinned by strong cash flow generation. By the end of December 2024, our net financial position improved significantly to US$ 121.0 million, with cash and cash equivalents totaling US$ 164.9 million, compared to a net financial position of US$ 224.3 million at the end of 2023. Our financial leverage ratio, excluding IFRS 16 effects and calculated against our fleet’s market value, also saw substantial improvement, finishing the year at 9.7%, a marked reduction from 18.0% at the end of 2023 and 72.9% at the end of 2018. Leveraging our substantial liquidity and superior credit rating, we repaid several high-cost bank loans and secured new financing at more favorable terms, including significantly lower margins.
Despite the current uncertain geopolitical landscape, our robust balance sheet has been instrumental in allowing us to continuously deliver value to our shareholders through share buybacks and dividends. In 2024, we distributed a US$ 30.0 million dividend from 2023’s net earnings in the second quarter, followed by an interim gross dividend of US$ 30.1 million in the fourth quarter, and executed share repurchases totaling US$ 10.3 million. Today, we are pleased to announce that our Board of Directors has proposed for approval at the upcoming Annual Shareholders’ Meeting a gross dividend of US$ 0.2940 per issued and outstanding share (US$ 0.2499 net, after deducting the maximum applicable withholding tax of 15%), equivalent to approximately US$ 35.0 million, scheduled for payment in May 2025. We extend our heartfelt thanks to all our stakeholders, for their unwavering support. We remain optimistic about our future prospects and are committed to leveraging our financial strength to consistently generate substantial value and returns for our shareholders.”
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