OSG reports $37 million loss
Tanker company Overseas Shipholding Group reported a second quarter net loss of $37.3 million compared to a $37.9 million loss in the same period last year.
Shipping revenue in the second quarter was $271.7 million compared to $283.9 million in the same 2010 period.
Morten Arntzen, president and chief executive officer, said “international-flag tanker rates remained under pressure in the second quarter, generating a disappointing quarterly result for OSG. The closure of Japanese refineries in the aftermath of the March earthquake and tsunami reduced crude imports into Japan as well as activity in the regional products trade, while an unexpectedly high and persistent level of refinery maintenance activity in the Atlantic basin refineries further impacted rates negatively.”
He said “The surprise decision by the IEA (International Energy Agency) to release 60 million barrels from global strategic petroleum reserves temporarily took the wind out of the tanker markets, and further delayed the recovery in our international markets. On a positive note, our U.S. Flag business is delivering improved results,' he said.
'The tanker industry continues to face extremely poor market conditions, exacerbated by events in Japan and Libya and, more recently, by the release of oil from the U.S and European strategic petroleum reserves.
“We believe that reducing the dividend to this level strikes the right balance among our goals of preserving the strength of our balance sheet, investing for long-term growth and returning cash to shareholders, while delivering a payout level that is more appropriate for today’s market. OSG has paid a dividend for 150 consecutive quarters, and the Board recognizes the importance of the dividend to our shareholders; however, we believe this is the prudent action to take now to further strengthen our company for the long-term,' he added.