d'Amico International Shipping: A Steady Compass in Stormy Seas – Why Now is the Time to Chart a Course

Amid the volatile seas of global shipping, d'Amico International Shipping S.A. has positioned itself as a stalwart vessel, leveraging financial discipline, strategic hedging, and industry tailwinds to navigate cyclical downturns. With geopolitical disruptions reshaping trade routes, environmental regulations accelerating fleet modernization, and supply constraints tightening, the company's robust balance sheet and forward-looking strategy make it a compelling long-term investment. Here's why now could be the right time to board.

Financial Fortitude Anchors Stability

d'Amico's financial health is its first line of defense against market turbulence. As of Q1 2025, its net debt stood at $114 million, a mere 10% of its fleet's market value—a stark improvement from 72.9% in 2018. This deleveraging is underscored by $163.1 million in cash reserves, ensuring liquidity even in lean times. With an EBITDA margin of 53.7%, the company has maintained profitability despite a 42% year-over-year drop in EBITDA to $34.4 million, a testament to cost discipline.

This metric highlights the company's deliberate strategy to reduce financial risk, enabling it to weather downturns while peers struggle.

Strategic Hedging Mitigates Volatility

The tanker market's reliance on spot rates leaves many exposed to price swings. d'Amico's solution? Fixed-rate contracts that lock in revenue visibility. As of Q1 2025:
- 52% of 2025 vessel days are fixed at an average TCE of $23,760/day.
- 21% of 2026 days are secured at $24,730/day, with 6% of 2027 days locked in at $23,550/day.

These contracts, paired with a 39.6% time-charter coverage rate in Q1, provide a shield against spot-rate volatility. Even as Q1 2025 spot rates fell to $21,154/day—down from **$38,201 in 2024—the company's fixed rates insulated profits.

This visual underscores the company's prudent risk management, which balances downside protection with upside exposure to rising rates.

Fleet Modernity and Industry Tailwinds

d'Amico's fleet of 30.6 equivalent ships (including owned and bareboat vessels) is a strategic asset. The fleet's average age of 9 years—with 85% classified as eco-designed—positions it to comply with stringent environmental regulations, such as the IMO's carbon targets. Meanwhile, the global tanker fleet faces an aging crisis: 17.2% of MR/LR1 vessels are over 20 years old, and 51% exceed 15 years. This will accelerate scrapping, tightening supply and lifting rates.

Geopolitical tailwinds further favor d'Amico. Red Sea conflicts and EU sanctions on Russian oil have rerouted trade flows, boosting demand for long-haul voyages. The IEA forecasts 5–6% additional product tanker demand from Russian exports to Asia, while sanctions on "dark fleet" vessels—often older, non-compliant ships—will reduce supply. d'Amico's modern, compliant fleet is poised to capture these shifts.

Near-Term Risks, Long-Term Rewards

No voyage is without headwinds. Oil demand growth is expected to slow to 0.7 mb/d in 2025, driven by weak Chinese construction activity and European industrial stagnation. Additionally, U.S. refining margin improvements and OPEC+ production cuts could pressure spot rates. However, d'Amico's fixed contracts and strategic fleet investments mitigate these risks.

Valuation: A Compelling Entry Point

At current valuations, d'Amico's 10% net debt-to-fleet ratio and dividend yield of ~3% (based on its $35 million annual dividend) offer investors a margin of safety. With $350 million allocated to newbuilds and vessel acquisitions through 2027, the company is primed to capitalize on the 15% orderbook-to-fleet ratio—a sign of constrained supply growth.

This comparison highlights its consistency in rewarding shareholders even during cyclical dips.

Conclusion: Charting a Course to Long-Term Gains

d'Amico International Shipping is more than a tanker operator—it's a strategic player in a sector ripe for structural change. Its low leverage, fixed-rate contracts, and modern fleet provide a stable foundation, while geopolitical shifts and regulatory pressures create a tailwind for years to come. Near-term demand risks are real but manageable, and the company's valuation offers a compelling entry point. For long-term investors seeking resilience and growth in a volatile market, d'Amico's compass points directly toward opportunity.

Investment Thesis: Buy d'Amico for a 3–5 year horizon, leveraging its financial strength and industry positioning. Monitor geopolitical developments and oil demand trends, but hold through cyclical dips—this is a company built to weather storms and emerge stronger.