In this Capital Link Deep Dive Podcast episode, Mr. Massimo Bonisoli, Senior Equity Analyst from Equita welcomed Mr. Carlos Balestra di Mottola, CEO of d’Amico International Shipping S.A. (Borsa Italiana: DIS) (OTCQX:DMCOF), who provided an overview of the company’s fleet composition, financial performance, and strategic investments. Mr. di Mottola discussed market dynamics and challenges, including the impact of geopolitical factors such as sanctions and trade flows, while highlighting the company’s approach to market exposure and risk management. The discussion concluded with an analysis of current market conditions, trade flow disruptors, and the implications of U.S. trade fees on shipbuilding capacity and global fleet growth.

Τo watch the full conversation, please visit the following link:

https://www.youtube.com/watch?v=vxQCmT1hSQs

Discussion Highlights

Heavy investment in modernizing fleet, committing $920 million to acquire 22 eco-designed vessels from 2014-22
Deleveraged, cutting net financial position to fleet market value ratio from 73% to 10% from 2018-24 despite prolonged 2009-21 downturn
Stock trades at 55% discount to NAV and 40% discount to book value
Returned $137 million in dividends & $17 million in share buybacks since 2022 with 40% payout ratio in 2024
Exercised purchase options on six time-chartered vessels, acquired 50% stake in joint venture with Glencore Group gaining control of four vessels, & ordered four new LR1s for delivery in 2027 for total investment of $453 million
China's naphtha demand drives up freight rates in Southeast Asia and the Middle East

Fleet Profile and Investments

Over the past decade, d’Amico International Shipping has invested heavily in modernizing its fleet, committing $920 million to acquire 22 eco-designed vessels between 2014 and 2022. Despite enduring a prolonged downturn from 2009 to 2021, the company deleveraged, reducing its net financial position to fleet market value ratio from 73% at the end of 2018 to just 10% by the end of March 2025. Recent moves include exercising purchase options on six time-chartered vessels, originally built at top-tier Japanese shipyards. Separately, the company acquired a 50% stake in a joint venture with Glencore Group gaining control of four additional vessels, while also ordering four new LR1s for delivery in the second half of 2027, representing a total investment of $453 million.

Market Approach and Risk Management

DIS maintains a balanced employment strategy, targeting 40-60% coverage over the next 12 months. In recent years, the company took a more aggressive stance, reducing coverage to 30% to capitalize on strong spot rates. Given the current geopolitical uncertainties, DIS has since increased coverage to just over 50% for the remainder of 2025 at an average rate of $24,000 per day, hoping to provide a buffer against volatility.

Product Tanker Market Outlook

The product tanker market has been volatile lately, with recent weakness in the U.S. Gulf due to low inventories, contrasting the strength showcased in Asia and the Middle East. Refinery utilization in the U.S. Gulf remains high at 93%, but low inventories have temporarily dampened export activity. Rising margins could reopen arbitrage opportunities, boosting long-haul trades. Mr. di Mottola adds that OPEC's rapid reversal of supply cuts could flood the market with oil, potentially pushing it into contango and adding support to product tanker demand.

Meanwhile, freight rates in Southeast Asia and the Middle East have surged as China ramps up naphtha imports from those regions amid tariffs on U.S. LPG. Furthermore, the migration of LR2 vessels to dirty trades due to a boost in crude tanker markets has tightened supply in the clean tanker segment.

Disclosure: Capital Link is the investor relations advisor to d’Amico International Shipping. 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 CEO interview. Thus, all comments in the article are the CEO’s.

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