Overseas Shipholding Group (OSG), a leading energy transportation company, reported mixed financial results for the second quarter 2010. Quarterly Shipping revenue was $283.9 million, up nearly 0.5% year over year. Second quarter Time Charter Equivalent (TCE) revenue was $231.7 million, down 7% year-over-year but better than the Zacks Consensus Estimate of $229 million. TCE revenue represents Shipping revenue less Voyage expenses.
Quarterly net loss was $37.9 million or a loss of $1.26 per share compared to a net loss of $8.8 million or a loss of 33 cents per share in the prior-year quarter. However, in the reported quarter, OSG incurred $27.8 million of one-time special charges. Excluding this, second quarter 2010 adjusted loss came in at 34 cents, significantly higher than the Zacks Consensus Estimate of a loss of 22 cents per share.
Segment-wise
Quarterly Pool revenue was $111 million, up 5.3% year-over-year. Time and bareboat charter revenue was $67.8 million, down 19.2% year-over-year. Voyage charter revenue was $105.1 million, up 12.7% year-over-year.
TCE Revenue Details
Quarterly TCE revenue for the crude oil segment was $126 million, down 2% year over year. This was mainly due to a decrease in the number of Panamax vessels chartered-in and substantial idle time for two single hull Aframax tankers that trade in International Flag lightering.
Product TCE revenue was $45.4 million, down 29% year-over-year. This was primarily due to a decrease in average spot rates earned on MRs, and a decline of 419 revenue days as a result of the redelivery of 13 single hull MRs.
Flag TCE revenue was $57.8 million, up 6% year over year.
Operating Expenses
Total operating expenses, in the second quarter 2010, was $301.1 million, up 6.8% year over year. Voyage expenses increased 52.4% year over year. Vessel expense decreased 3.3% year over year. Charter hire expenses reduced by 15.3% year over year. General & Administrative expense was $24.5 million, down 15.9% year over year.
During the first half of 2010, OSG generated $12.6 million of cash from operations compared to $189.9 million in the year-ago period. Free cash flow, in the same period was a negative $164.4 million compared to a positive $8.3 million.
Liquidity
At the end of the second quarter 2010, OSG had $352.5 million of cash & marketable securities compared to $524.7 million at the end of fiscal 2009. Total debt, at the end of the same quarter was $1,855.8 million compared to $1,846.5 million at the end of fiscal 2009. At the end of the second quarter 2010, debt-to-capitalization ratio was 0.48 compared to 0.49 at the end of fiscal 2009.
Operating Metrics
Quarterly total revenue days were 9,284 compared to 9,725 in the year-ago quarter. Within this, total Crude oil revenue days were 4,529 compared to 4,593 in the prior-year quarter. Total Refined Products revenue days were 3,050 compared to 3,469 in the prior-year quarter. Total U.S. Flag revenue days were 1,595 compared to 1,572 in the year-ago quarter. Other revenue days were 110 compared to 91 in the year-ago quarter.
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