Riding The Tanker Market Momentum - d'Amico International Shipping's CEO On Strategy And Outlook

In this episode of Capital Link's Trending News Webinar Series, Carlos Balestra di Mottola, the Chief Executive Officer of d’Amico International Shipping S.A. (OTCQX:DMCOF), provided an optimistic analysis of the tanker market, linking recent crude carrier strength to a positive outlook for product tankers and describing how DIS is planning to act in this favorable environment.

You can watch the full interview here:

https://www.youtube.com/watch?v=GbHdB2hfZX4&t=950s

Highlights

• Product tanker upside: Strength in mid-sized and VLCC markets seen as precursor to a surge in clean trades.
• Supply dynamics: Crude output rising by ~2.7m bpd in 2025 and +2m bpd next year; should drive higher refined volumes and global product transport.
• Shareholder returns: $137m in dividends and $17m in buybacks since 2022.
• Fleet strategy: $235m newbuild program for four eco LR1s supports fleet renewal.

Interlinked Markets Favoring Each Other

Mid-sized tankers have performed well over the past few years, and now it appears larger crude carriers are starting to pick up as well. Freight rates for VLCCs have surged to their highest levels in more than two years. Mr. di Mottola sees this not as a shift away from product tankers but as a precursor to their own market surge.

The CEO noted that the crude tanker market is 2.5 times larger than the product tanker one, as VLCCs alone represent 60% of the crude fleet. This means strength in crude inherently pulls capacity away from product routes. At the moment, only 7 VLCCs are expected to be delivered this year.

Crude oil production is forecast to rise by 2.7 million barrels per day this year; some of this will contribute to a buildup in inventories but a large portion of this will be refined, driven also by the current high refining margins, according to Mr. di Mottola. This refined product will then need to be transported all over the world on product tankers, creating a direct demand link.

Another increase of just over 2 million barrels per day on oil supply is anticipated for next year, Mr. di Mottola says. Therefore, production is increasing, especially in locations which are contributing significantly to ton miles, such as the Americas.

Rewarding Shareholders and Selling Old Vessels

d’Amico has returned $137 million in cumulative dividends since 2022, alongside $17 million in buybacks, with the distribution from 2024 results alone totaling $65 million in dividends. The company maintains a preference for dividends over buybacks, with a controlling shareholder owning around 63% of the company, if treasury shares are excluded. Aggressive buybacks could reduce the stock’s trading liquidity, something Mr. di Mottola wishes to avoid. Buybacks will be used occasionally, but dividends are the primary distribution method.

On fleet renewal, the strategy is equally prudent. The company is not actively acquiring secondhand tonnage but is modernizing through a $235 million order for four LR1 newbuilds set for delivery in 2027. At the same time, they are selectively selling older, non-ecofriendly vessels (a 2010-built ship last year, two 2011-built MRs this year) while they are profitable, with plans to replace them in the coming years.

Disclosure: Capital Link is the investor relations advisor to d'Amico International Shipping S.A. (Borsa Italiana: DIS and OTCQX Best Market: DMCOF). This content is for informational purposes only and not intended to be investing advice. We would like to highlight that this is not a Capital Link article with our own editorial on the company. It is a company management interview. Thus, all comments in the article are theirs.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.