Overseas Shipholding Group Inc. (OSG), a provider of energy transportation services, Wednesday reported a loss for the second quarter, reflecting the demand decline in oil and tanker markets amidst the economic contraction.
The company's second-quarter net loss attributable to the company was $8.79 million or $0.33 per share, compared with a profit of $86.94 million or $2.81 per share in the year-ago period.
Current-year quarter special items totaled $1 million or $0.04 per share, compared with special items of $14.7 million or $0.36 per share a year earlier.
On average, 13 analysts polled by Thomson Reuters expected the company to report a loss of $0.66 per share for the quarter. Analysts' estimate typically excludes one-time items.
Total shipping revenues declined to $282.66 million from $428.22 million last year. Revenue days totaled 9,725 in the second quarter, compared with 9,648 in the same period a year earlier.
Analysts had a consensus revenue estimate of $259.96 million for the quarter.
During the quarter, the company's time charter equivalent, or TCE, revenues were $248.4 million, a 36% decline from $386.1 million in the prior-year quarter. The decline in TCE revenues was due to lower daily TCE rates earned by all of the company's international flag vessel classes, offset by a 77 day increase in revenue days.
Commenting on the results, Morten Arntzen, chief executive said, "As we expected, a convergence of events caused tanker markets to deteriorate in the first half of 2009. The global economic contraction led to a sharp decline in world demand for oil, notably in OECD countries, which in turn resulted in significant OPEC production cuts."
TCE revenues for the company's Crude Oil segment were $128.1 million, a 50% decrease from $254.9 million in the same period of 2008. TCE revenues for the Product Carrier segment dropped 11% to $63.6 million from $71.6 million last year. Further, TCE revenues for the U.S. Flag segment reached $54.7 million in the quarter, up 6% from $51.7 million in the same quarter last year.
For the first half of fiscal 2009, Overseas Shipholding earned $112.96 million or $4.20 per diluted share, compared with $199.37 million or $6.42 per share a year ago. Shipping revenues declined to $241.84 million from $449.46 million last year.
On July 29, the company had announced its intention to initiate a tender offer for all of the outstanding publicly held common units of OSG America L.P. (OSP) for $8 in cash per unit. The tender offer is expected to commence in late August. The offer will be conditioned upon, among other things, more than 4 million common units being tendered such that the company would thereupon own at least 80% of the outstanding common units of OSG America.
Moving forward, Overseas Shipholding said that it expects the trend toward an oversupplied vessel market to moderate as very tight ship finance markets and the weakening financial condition of less well-capitalized ship owners and shipyards result in a contracting tanker orderbook. The single hull phase-out over the next eighteen months will further benefit the economics of the global tanker trading fleet, the company noted.
"For the remainder of 2009, we remain focused on controlling costs and managing projects that can deliver attractive returns in both the short and long-term. The core of our long-term strategy-conservative financial management and balanced growth-remains intact, and we have ample liquidity to manage the turmoil ahead and take advantage of opportunities as they arise," Arntzen added.
OSG closed Tuesday's trading at $35.92, up $0.45, on a volume of 625,900 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.