Profit for Overseas Shipholding Group fell 78 percent in 2009 to $70.2 million on revenue that dropped 38 percent to $952.6 million as plummeting demand for tanker charters cut rates in half.
Driving the drop in time charter equivalent revenues were declines in spot rates across all of the company's vessel classes, from oil tankers to product carriers.
Fourth quarter TCE revenues fell 41 percent from a year ago to $204.1 million, leading to a net loss of $23.2 million compared with a loss a year earlier of $79.5 million.
The losses were related to special charges. In the fourth quarter 2009, expenses of $6 million were related to a tender offer for OSG America, which was completed.
The year-over-year decline in TCE revenues was due to lower average daily TCE rates earned by nearly all of the company's international flag vessel classes. Revenue days decreased year-over-year by 1,810 days. Average daily TCE rates earned by the company's international crude oil tankers declined 50 percent to $26,307 per day compared with $52,344 per day in the year earlier period and international product carriers declined 21 percent to $17,976 per day compared with $22,803 per day.
"2009 was one of the most difficult tanker markets of the last 20 years. The slowdown in worldwide economic activity that began in 2008 continued throughout 2009. As a result, global oil demand was down, notably in North America, and refinery utilization levels were painfully low in Europe, Japan and the U.S. This combined with substantial OPEC production cuts and a 6% increase in the global tanker fleet, combined to produce a very tough rate environment,” said President and CEO Morten Arntzen.
Contact Thomas L. Gallagher at firstname.lastname@example.org.