Wednesday, July 25, 2007

Overseas (OSG) reports 2Q results

Overseas Shipping Quarterly Profit Rises on Rates
By Todd Zeranski
July 25 (Bloomberg)

Overseas Shipholding Group, the largest U.S.-based oil-tanker owner, said second-quarter profit rose 31 percent on higher spot rates for its so-called Very Large Crude Carriers and smaller Aframax and dry-bulk vessels.

Net income rose to $78.9 million, or $2.28 a share, from $60.2 million, or $1.52, a year ago, New York-based Overseas Shipholding said in a statement. Revenue climbed 30 percent to $299.9 million. The company was expected to earn $1.43 per share, the average estimate of five analysts surveyed by Bloomberg.

Very Large Crude Carriers, or VLCCs, can carry 2 million barrels of oil. These ships operate mainly out of the Persian Gulf on routes to Asia and the U.S.

Overseas Shipping said its 21 VLCCs were chartered in the spot market at an average rate of $53,474 per day, 15 percent higher than the year-ago period. The company's break-even point for VLCCs is $28,700.

For its 15 Aframax tankers, which can transport about 600,000 barrels of oil, Overseas Shipholding said it was paid an average of $32,187 a day in the spot market, where rates vary by voyage, 21 percent higher than a year earlier.

Maritrans Purchase

Overall, Overseas Shipping totaled 8,704 revenue days for the quarter, a 16 percent increase over the year-ago period. The increase was aided by the purchase of four Handysize vessels that carry dry-bulk commodities, as well as the acquisition of a fleet of oil-transfer boats and the former Maritrans Inc. fleet.

Chief Executive Officer Morten Arntzen, 52, expanded the company's fleet of domestic tankers with the $455 million purchase of Maritrans in September.

The company said it repurchased 5.5 million shares at $66.13 per share during the quarter.

The earnings report was released after the close of regular trading on U.S. stock markets. Shares of Overseas Shipholding today rose $2.46, or 2.9 percent, to $86.14 in New York Stock Exchange composite trading.

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