Overseas Shipholding Group, Inc.’s (OSG) fourth quarter operating loss per share of 59 cents came in substantially better than the Zacks Consensus Estimate of a loss of $1.21 on lower operating expenses. This excluded 23 cents per share associated with tender settlement, 3 cents related to a negative change in unrealized freight derivative positions and 2 cents for loss of vessel sales.
Results reflected lower operating expenses on rigorous re-engineering efforts and cost control. However, this was offset by weak top-line growth due to feeble demand that led to lower average spot rates and net reduction in the operating fleet compared to the prior-year period.
OSG’s GAAP net loss was $23.2 million or 86 cents per share compared to the net loss of $79.5 million or $2.89 in the year-ago period. Total operating expenses decreased 45.9% year-over-year to $278.6 million due to the company’s cost-cutting initiatives and other re-engineering efforts.
OSG’s total revenue declined 38.2% year-over-year to $242.6 million on reduced revenues across all three segments. Pool revenues declined 56.4% year-over-year to $78.1 million, time and bareboat charter revenues declined 17.7% year-over-year to $75.0 million while voyage charter revenues decreased 27.2% year-over-year to $89.5 million.
For full-year 2009, total revenues declined 35.8% from 2008 to $1.09 billion. Net income attributable to OSG shareholders was $70.2 million or $2.61 per share compared to $317.7 million or $10.65 in 2008. Special items increased earnings in 2009 by $93.3 million or $3.47 per share compared to special items that decreased earnings by $116.8 million or $2.70 in 2008. Total operating expenses declined 25.2% from 2008 to $1.02 billion.
As of Dec 31, 2009, cash and short-term investment balances were $525 million, up from $344 million as of Dec 31, 2008. Total debt increased to $1.8 billion from $1.4 billion at the end of 2008.
Dividend Update
On Feb 5, 2010, the Board of OSG declared a regular quarterly dividend of 43.75 cents per share on common stock outstanding, payable on Mar 9, 2010 to stockholders of record as on Feb 25, 2010. Annual cash dividend per share increased to $1.75 in 2009 from $1.50 in 2008.
Business Update
On Nov 5, 2009, OSG initiated a tender offer for approximately 7 million shares of OSG America LP, a Delaware limited partnership formed by the company, for $10.25 in cash per share. On Dec 17, 2009, OSG exercised its right pursuant to the partnership agreement to purchase all of the remaining shares that were not tendered in the offer and acquired the remaining stake. As a result, the company has acquired 100% of OSG America LP for $71.8 million through funds drawn under its $1.8 billion credit facility.
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