Tanker Market Boom: d’Amico CEO Reveals Strong Financials and Future Plans

d'Amico International Shipping S.A. (DIS) participated in the 2025 Capital Link Corporate Presentation Series this week. Mr. Carlos Balestra di Mottola , CEO of DIS, delivered an extensive presentation on the company’s performance, fleet updates, and market dynamics.

To watch the presentation, please visit the following link:

A Young Fleet and Financial Strength

Mr. Balestra di Mottola provided an overview of d'Amico’s fleet, which, as of September 30, consisted of 33 vessels, including 26 owned ships. Since then, through the exercise of a purchase option on a previously time-chartered-in vessel, the company has increased the number of owned vessels to 27. The fleet also includes three bareboat chartered-in vessels and three time-chartered-in vessels. Notably, DIS’s fleet is relatively young, with an average age of nine years, and 85% of the vessels are eco-designed, reflecting the company’s commitment to sustainability and efficiency.

Mr. Balestra di Mottola talked about the company’s decision to order four new LR1 vessels in 2024, scheduled for delivery in the second half of 2027. These additions are expected to further modernize the fleet and enhance its competitiveness. On the financial front, DIS has been actively deleveraging, resulting in decreasing loan repayments. The company does not have refinancing needs in 2025, with only a small balloon payment due in 2026. This prudent financial management has strengthened d’Amico’s balance sheet with a net financial position to fleet market value ratio of just 6% as of September 2024 and a substantial cash position of nearly $229 million as at the same date.

Operational Performance and Market Dynamics

DIS reported outstanding financial results for the first nine months of 2024, with a net profit of $163 million, surpassing the previous year’s performance. Additionally, through the recent contracts signed and communicated to the company secured profits for 2025 of around $39 million, assuming an overall P&L break-even of approximately $15,000. This provides the company with some security and visibility on cash flows in a volatile market environment. Despite that, d’Amico has 65% of its 2025 days not covered through fixed-rate contracts, allowing the company to benefit from the anticipated strong spot markets this year.

Mr. Balestra di Mottola then shifted focus to the broader market, noting that freight rates and asset values have softened in recent months but remain at historically high levels. The ongoing Chinese New Year celebrations have temporarily subdued market activity in Asia, but the CEO expects a recovery in freight rates in the coming months. Mr. Balestra di Mottola also highlighted the potential impact of recent sanctions on tanker markets, particularly the U.S. sanctions on 161 vessels, which could tighten the supply of compliant vessels and drive rates higher.

Trade Disruptions due to the Ongoing Wars

Mr. Balestra di Mottola identified several geopolitical factors influencing the tanker market, including the war in Ukraine and the attacks in the Bab al-Mandeb Strait. As we have previously discussed, the redirection of Russian oil exports to more distant markets and the collapse of Suez Canal transits due to security concerns have significantly increased ton-mile demand, benefiting the tanker industry. According to Mr. di Mottola, the normalization of the Bab al-Mandeb situation would likely have a limited negative impact on the market, as transits through the longer Cape of Good Hope route, have dropped significantly since November last year.

He also discussed the cannibalization of CPP trades by crude tankers, particularly VLCCs and Suezmaxes, which have transported significant volumes of gasoil in 2024. This shift occurred when crude tanker rates softened while CPP freight rates surged, prompting some crude carriers to switch to clean product transport. This trend has tapered off in the last quarter of the year as crude rates rebounded, and clean ups are not expected to occur to the same extent in 2025 given the strong outlook for crude tanker markets this year.

Oil Demand and Refining Capacity

Turning to fundamentals, Mr. Balestra di Mottola referred to the IEA’s estimate of a 1.1 million barrels-per-day increase in global oil demand for 2025, driven by growth in China and India. Refining throughputs were also expected to rise, contributing to higher demand for product tankers. He highlighted the expansion of refinery capacity in Asia and the Middle East, coupled with the closure of less competitive refineries in Europe and the Americas, as a key driver of ton-mile demand.

The CEO also discussed the impact of the Dangote refinery in Nigeria, which has ramped up production in 2024 and is expected to export high-spec products to Europe in 2025. While this development has reduced Nigeria’s imports in 2024, Mr. di Mottola anticipates that the country might increase product exports in the future, further supporting the product tanker market.

Fleet Aging and Supply Dynamics

As is well known, the global tanker fleet is aging rapidly, with a significant portion of vessels over 20 years old. According to Mr. Balestra di Mottola, despite an increase in new orders in 2024, the order book remains low by historical standards, and deliveries are spread over several years. The CEO projects manageable fleet growth across all tankers of 2% in 2025 and 2.9% in 2026, even assuming minimal scrapping, which bodes well for freight markets.

Investment Opportunities

We should also not forget to mention d’Amico’s attractive valuation, with shares trading at a steep discount to the company’s NAV of $10.20 per share as of the end of September 2024. Mr. Balestra di Mottola stressed that DIS was well-positioned to capitalize on strong market fundamentals and geopolitical tailwinds, making it an appealing investment opportunity.

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