The year end and 4th quarter results of Overseas Shipholding Group OSG had mixed results. OSG is a tanker company with over 150 ships (including 29 in their newbuild program) covering the transport of crude oil, refined petroleum products. The company currently operates 22 of their vessels as U.S. flagged ships to transport petroleum products between U.S. ports as required under the Jones Act.
For the total of 2008, OSG reported some really nice numbers: Net income was $10.65 per share compared to $6.16 in 2007 and $9.92 in 2006. Time charter equivalent (TCE) of $1.54 billion vs. $1.04 billion in 2007.
In the 4th quarter OSG reported a net loss of $2.79 per share. The loss was driven by $5.66 per share in impairment charges. Goodwill took a $2.28 per share hit and the company wrote down $101 million or $3.18 per share against 4 newbuild ATBs (articulated transport barges) that the ship builder does not have the resources to finish building. These ATBs were a significant part of the company’s plans expand their U.S. flag operations.
So far in 2009 spot charter rates are significantly below the averages earned in 2008. For example, VLCC spot charter rates are currently at about $50k per day compared to the $92k average earned in 2008. Aframax spot rates are $37k vs. the average $43k earned last year. It appears about 25% of the charter earnings are from fixed rate charters instead of on the spot market.
The current annual dividend (paid quarterly) is $1.75 per share, giving OSG a current yield of 7%. The dividend has increased at a rate of 13% over the last 5 years.
Overseas Shipholding Group looks like a well managed company with broad exposure to the ocean transport of petroleum products. It looks like a good choice for a conservative exposure to the tanker market and the U.S. flag fleet exposure is a nice bonus. A year ago after earning $6 per share this was a $50 stock.
Overseas Shipholding Group 2008 revenues increase 49%
OSG – Overseas Shipholding Group, Inc.- News Release.
The year end and 4th quarter results of Overseas Shipholding Group OSG had mixed results. OSG is a tanker company with over 150 ships (including 29 in their newbuild program) covering the transport of crude oil, refined petroleum products. The company currently operates 22 of their vessels as U.S. flagged ships to transport petroleum products between U.S. ports as required under the Jones Act.
For the total of 2008, OSG reported some really nice numbers: Net income was $10.65 per share compared to $6.16 in 2007 and $9.92 in 2006. Time charter equivalent (TCE) of $1.54 billion vs. $1.04 billion in 2007.
In the 4th quarter OSG reported a net loss of $2.79 per share. The loss was driven by $5.66 per share in impairment charges. Goodwill took a $2.28 per share hit and the company wrote down $101 million or $3.18 per share against 4 newbuild ATBs (articulated transport barges) that the ship builder does not have the resources to finish building. These ATBs were a significant part of the company’s plans expand their U.S. flag operations.
So far in 2009 spot charter rates are significantly below the averages earned in 2008. For example, VLCC spot charter rates are currently at about $50k per day compared to the $92k average earned in 2008. Aframax spot rates are $37k vs. the average $43k earned last year. It appears about 25% of the charter earnings are from fixed rate charters instead of on the spot market.
The current annual dividend (paid quarterly) is $1.75 per share, giving OSG a current yield of 7%. The dividend has increased at a rate of 13% over the last 5 years.
Overseas Shipholding Group looks like a well managed company with broad exposure to the ocean transport of petroleum products. It looks like a good choice for a conservative exposure to the tanker market and the U.S. flag fleet exposure is a nice bonus. A year ago after earning $6 per share this was a $50 stock.