OSG’s tanker shipping profits skyrocket

OSG’s tanker shipping profits skyrocket    New York-based Overseas Shipholding Group, Inc. (OSG) reported Thursday record first-quarter earnings that even exceeded its net income for every full year in the company’s history except 2004.
   Having completed the takeover of fellow tanker shipping firm Stelmar Shipping Ltd. in January, OSG boosted its net income 116 percent for the quarter to $164.9 million from $76.2 million in the same quarter of 2004.
   The company’s revenue rose 42 percent to $275.4 million in the first quarter, from $194.1 million a year earlier.
   Morten Arntzen, president and chief executive officer of OSG, said the latest results reflect strong operating results in its crude transportation business, healthy contributions from the 40 ships of the former Stelmar fleet and elimination of tax on the shipping income from its non-U.S. fleet.
   To expand its U.S.-flag tanker-shipping arm, OSG announced last month the signing of a letter of intent to bareboat 10 new Jones Act product carriers that will be built at the Kvaerner Philadelphia shipyard.
   “This is the largest commercial newbuilding program announced at a U.S. yard in many decades,” the company said.
   The transaction remains subject to the execution of definitive agreements and governmental approvals. The boards of OSG and Kvaerner have approved the transaction and steel cutting on the first product carrier has already commenced.
   “The vessels will be delivered at a time when demand for Jones Act product carriers is expected to be strong due to OPA 90 mandated deletions from the sector and a strong ongoing demand for products in the U.S. market,” OSG said.
   OSG has a fleet of 99 vessels aggregating 13 million deadweight tons. Its $843-million takeover of Stelmar made it the world’s second-largest public tanker shipping company.