Oct 28, 2026 earnings call — Dividend hike and record-strong balance sheet
Board raised the quarterly dividend to $0.75 per share; company has $2.1 billion in cash and $2.5 billion in available liquidity.
Revenue $0.2B (est $0.2B) · EPS $2.49 (est $2.06)
Key quotes
"It is against this backdrop that we are pleased to announce a 67% increase in our quarterly dividend from $0.45 per share to $0.75 per share."
"Since May, Middle East crude exports have more than doubled from 8 million barrels a bit per day to nearly 17 million. The additional crude supply has helped drive a 4 million barrel-per-day increase in global refinery runs."
"Nearly half the product tanker order book consists of LR2s. However, 69% of the existing LR2 fleet is currently trading crude oil."
Analyst Q&A 5
LR2 trading mix and recent MR strength
Q (Omar Nokta · Clarksons): He asked how the company is trading its LR2s now, and for an update on the LR2s that moved to dirty trades. He also asked how management views the LR2 market going forward and then asked what drove the recent MR strength.
A: Management said LR2 crude voyages rose from "1 in 8" previously to "1 in 3" in the third quarter and that "probably 70% of the LR2s are now trading in dirty" by end of September. They said crude exports and higher refinery runs pushed LR2 rates very high and that they are comfortable with their LR2 and Aframax positioning. On MRs they said Asia and U.S. long-haul demand and longer ton-miles have soaked up more ships, driving very high rates (U.S. Gulf "north of $80" and Asia long-haul between "70 and 80 thousand dollars").
"Today, as things stand, we probably have 1 in 3 in the third quarter." — Lars Dencker Nielsen
Convertible and Russian cargo impact
Q (Chris Robertson · Deutsche Bank): He asked about the convertible note: the conversion price and whether the company would consider early redemption or buybacks given strong cash generation. He also asked whether Russian cargoes to the U.S. would affect the mainstream tanker market.
A: Management said the conversion price is "$99" and that conversion is at the holders' option now, while the company cannot redeem in the current window and any action would be market purchases they are not forecasting. They said Russian cargoes are a "sideshow" and a "flash in the pan," with volumes too small to move the mainstream tanker market and most sanctioned ships being older with limited impact.
"the conversion price is $99 that is convertible at the option of the holders right now." — Christopher Avella (CFO)
Why dividend set at $0.75
Q (Gregory Lewis · BTIG): He asked how management decided on the $0.75 quarterly dividend and how that relates to the company's breakeven and finances. He wanted the rationale for the sizable increase.
A: Management said the company has taken a "quantum step up in its balance sheet strength" and wanted a dividend that is regular, sustainable, and can be raised each year. They said the 67% increase is a strong, deliberate step to give shareholders certainty and that they consulted major long-only shareholders, while not yet having a scientific process for timing further changes.
"So I think it is very clear that you know, the company as Emanuele alluded to right from the beginning of the call has really taken a quantum step up in its balance sheet strength." — Robert L. Bugbee (PRESIDENT)
Middle East exports, demand, and charter coverage
Q (Stephanie Moore · Jefferies): She asked how Middle East refinery recovery affects overall demand and where export volumes will come from, and asked the timing of these demand drivers. She also asked about appetite to increase term (time charter) coverage versus keeping upside to spot.
A: James said refined product demand rose from about "70 million barrels per day" at the lows to "74 million" now and could be "76" in a year, giving "2 million barrels more of demand growth," with the biggest supply coming from the Middle East and continued Asia exports; he said supplies could be tight in Q4 and Q1 and "we would not expect restocking until potentially end of next year." Robert said they balance charters and risk opportunistically, see no urgency before winter, and will add time charter coverage at opportune times as ships come off. Lars added that they decide based on market positions and the forward curve.
"So we would not expect restocking until potentially end of next year." — James Doyle
Keep LR2s dirty or bring back clean; margins
Q (Liam Burke · B. Riley): He asked whether the LR2s currently trading dirty will stay that way or be returned to the clean market. He also asked if falling refinery margins are a concern for rates.
A: Lars said the LR2s will "stay dirty" for now because they are trading well and they will reconsider only if the spread changes; he noted increased fungibility with Aframaxes and more cleanup cargo availability. James said refinery margins were record highs and may ease as runs rise, but higher exports that follow will ease tightness and benefit rates, and he noted that most new refinery capacity is coming in India and China.
"As things stand right now, Liam, they will stay dirty as they are trading just as fine as they are doing right now." — Lars Dencker Nielsen