Second Quarter 2004 Earnings Results


NEW YORK, July 29, 2004 (PRIMEZONE) -- Overseas Shipholding Group, Inc. (NYSE:OSG) reported record net income for the first six months of 2004 of $121,592,000, or $3.13 per share, an increase of 41% compared with net income of $86,075,000, or $2.50 per share, for the first half of 2003. EBITDA for the first six months rose to $270,007,000 from $192,351,000 in the first six months of 2003. Net income for the first six months of 2004 exceeded net income for the full year 2003 of $121,309,000, which was the highest annual net income in the Company's history.

Net income for the quarter ended June 30, 2004 of $45,404,000, or $1.15 per share, compared with net income of $41,840,000, or $1.21 per share, in the second quarter of 2003. EBITDA for the second quarter rose to $113,594,000 from $98,135,000 in the second quarter of 2003 (see Appendix 2).

"I am pleased to announce that OSG has extended its run of consecutive record earnings announcements with the highest second quarter income and the highest first half income in the Company's history," said Morten Arntzen, President and Chief Executive Officer of OSG. "The continuing strong demand for tankers, principally as a result of growing world crude oil demand, has resulted in tanker rates remaining at very high levels through the beginning of the third quarter, traditionally a seasonally weak period for the industry.

"Our strategic initiative to grow the Company has initially focused on our core Crude and U.S. Flag sectors. The integration of the four ULCCs was completed this week under the commercial management of Tankers International. By developing new trades for these vessels and building on our worldwide VLCC network, we will seek to generate increased utilization and superior earnings for these high quality vessels. The seven VLCCs and two Aframaxes that we committed to charter in during the first six months will allow us to enjoy greater exposure to this buoyant tanker market with VLCC/ULCC revenue days increasing by 15% in the second half of the year compared with the first half. In the U. S. Flag sector, the two Product Carriers we purchased in April add to our presence in the U.S. market and increase our core level of earnings from this sector.

"In addition to building scale in our core Crude, U.S. Flag and Product Carrier sectors, we are considering opportunities in other bulk shipping segments, such as chemical parcel tankers and LNG. The Company remains firmly committed to disciplined and intelligent growth."

Highlights



 Operations

 -- In July, a joint venture in which OSG holds a 49.9% interest took
    delivery of four 442,000 dwt Ultra Large Crude Carriers ("ULCCs")
    built in 2002 and 2003.  These unique vessels, designed and built
    for a 40-year life expectancy, can each transport 3.2 million
    barrels of crude oil and are the only double hull ULCCs in the
    world.

 -- In April, OSG acquired two 51,000 dwt U.S. Flag Jones Act Product
    Carriers, built in 1982 and 1983.  These vessels are fixed on
    bareboat charters to an oil major.

 -- In June, the Company agreed to sell the Olympia, a 1990 built
    single hull VLCC, taking advantage of high second hand vessel
    prices and further reducing the average age of the Company's VLCC
    fleet.  At almost $40 million, we believe this is the highest
    price ever paid for a VLCC of this age, generating a $12.4 million
    gain that will be recognized in the third quarter.

 -- In June, the final vessels in OSG's fleet received International
    Ship Security Certificates, in advance of the mandatory
    implementation date.

 Finance

 -- With fixed charges for the six months ended June 30, 2004 of
    $38,716,000 and EBITDA of $270,007,000, EBITDA/Fixed Charges ratio
    was 7.0 compared with a ratio of 5.9 for the six months ended June
    30, 2003.

 -- In July, OSG closed a $100 million, seven-year unsecured revolving
    credit facility, resulting in liquidity of over $1 billion.

VLCC Sector

During the second quarter, rates for modern VLCCs trading out of the Arabian Gulf averaged $64,500 per day, 14% less than the previous quarter, but 62% more than the average rate for the corresponding quarter in 2003. Global oil demand in the second quarter of 2004 was estimated by the International Energy Agency ("IEA") at 80.4 million barrels per day ("b/d"), a decrease of 1.4% from the previous quarter, but 5.2% higher than the comparable quarter in 2003. Chinese oil demand surged to an estimated 6.4 million b/d in the second quarter of 2004, 23.2% higher than the comparable quarter of 2003. Additionally, continued rising gasoline consumption helped push U.S. oil demand to 20.5 million b/d, up 4.1% relative to the second quarter of 2003. These factors more than offset a decline in Japanese oil demand attributable to the reactivation of previously idled nuclear power generation capacity. The upturn in VLCC spot freight rates that began in April 2004 was largely due to a boost in Arabian Gulf cargoes from OPEC countries and continued disruptions to Iraqi exports via the northern pipeline to Ceyhan in the Mediterranean. Middle East OPEC production rose counter seasonally to 20.0 million b/d in the second quarter from 19.8 million b/d in the first quarter in response to sharply higher oil prices. During the second quarter of 2004, estimated OPEC production exceeded quotas by more than 10%.

The world VLCC fleet grew to 439 vessels (127.4 million dwt) at June 30, 2004 from 433 vessels (126.1 million dwt) at the start of 2004. Newbuilding orders placed during the first six months of 2004 totaled 26 vessels (7.9 million dwt) compared with 51 vessels (15.5 million dwt) for the full year 2003. The orderbook expanded to 89 vessels (27.2 million dwt) at June 30, 2004, equivalent to 21.3%, based on deadweight tons, of the existing VLCC fleet.

Aframax Sector

During the second quarter of 2004, rates for Aframaxes operating in the Caribbean trades averaged $26,400 per day, 44% lower than the previous quarter and 14% lower than the corresponding quarter in 2003. Total non-OPEC oil production for the second quarter of 2004 was estimated at 49.7 million b/d, 3.3% higher than the corresponding quarter in 2003. More than 60% of this growth was generated by the Former Soviet Union ("FSU"). Seaborne oil exports from the FSU in the second quarter of 2004 were estimated at 5.9 million b/d, 5.8% higher than the comparable quarter in 2003.

Weather related congestion and delays in both the Baltic and Black Sea trading areas that bolstered freight rates in the first quarter were largely resolved by the start of the second quarter. This resulted in increased availability of suitable tonnage and an easing in rates. Venezuelan crude oil production remained at just above the 2 million b/d level, down 4.4% from the second quarter of 2003 and well below the levels attained prior to the political turmoil of the past year-and-a-half.

The world Aframax fleet increased to 615 vessels (61.0 million dwt) at June 30, 2004 from 601 vessels (59.2 million dwt) at the start of 2004, as Aframax deliveries from shipyards exceeded deletions. Newbuilding orders placed during the first six months of 2004 totaled 35 vessels (3.9 million dwt) compared with 99 vessels (10.6 million dwt) during the full year 2003. The orderbook increased to 160 vessels (17.4 million dwt) at June 30, 2004, equivalent to 28.4%, based on deadweight tons, of the existing Aframax fleet.

Financial Profile

On July 23, OSG closed an unsecured revolving credit facility of $100 million. This new facility, priced at a highly competitive margin, has a term of seven years. The Company has also renegotiated certain of its secured credit facilities, reducing margins, extending terms and increasing advance levels.

With shareholders' equity of $1.15 billion as of June 30, 2004 and $1 billion of liquidity, including undrawn credit facilities, the Company believes its financial flexibility and strength distinguish OSG from most of its competitors.

With one of the most modern VLCC and Aframax fleets in the industry, substantial liquidity and proven access to alternative sources of capital, the Company is unusually well positioned to take advantage of market opportunities as they present themselves.

OSG Fleet Profile

OSG is one of the largest tanker owners in the world and the leading U.S. based tanker company, with customers that include many of the world's largest oil companies. During the second quarter of 2004, OSG purchased two U.S. Flag Product Carriers and charters-in on three VLCCs commenced. At June 30, 2004, OSG's fleet comprised 58 vessels totaling 9,890,822 dwt, including 15 vessels owned by joint ventures or chartered in under operating leases. Adjusted for OSG's proportional interest in joint venture and chartered in vessels, the fleet totals 51.8 vessels totaling 8,347,072 dwt.

At June 30, 2004, the Company's VLCC fleet, had an average age of 5.9 years compared with a world VLCC fleet average age of 8.2 years. OSG's Aframax fleet had an average age of 6.4 years compared with a world Aframax fleet average age of 9.8 years.



 Appendix 1

 The following table presents comparative per share amounts for
 net income, adjusted for the effects of vessel sales and
 securities transactions, including write-downs in the carrying
 value of certain securities pursuant to FAS115:

                                  Three Months Ended  Six Months Ended
                                        June 30,          June 30,
                                    --------------    --------------
                                     2004     2003     2004     2003
                                    -----    -----    -----    -----
 Net Income                         $1.15    $1.21    $3.13    $2.50
 (Gain)/Loss on Vessel Sales           --       --    (0.05)    0.02
 (Gain) on Securities Transactions  (0.01)   (0.06)   (0.12)   (0.10)
                                    -----    -----    -----    -----
                                    $1.14    $1.15    $2.96    $2.42
                                    =====    =====    =====    =====

 Note: Net income adjusted for the effect of vessel sales and
 securities transactions is presented to provide additional
 information with respect to the Company's ability to compare from
 period to period vessel operating revenues and expenses and
 general and administrative expenses without gains and losses from
 disposals of assets and investments. While net income adjusted
 for the effect of vessel sales and securities transactions is
 frequently used by management as a measure of the vessels
 operating performance in a particular period it is not
 necessarily comparable to other similarly titled captions of
 other companies due to differences in methods of calculation. 
 Net income adjusted for the effect of vessel sales and securities
 transactions should not be considered an alternative to net
 income or other measurements under generally accepted accounting
 principles.


 Appendix 2

 Reconciliation of net income, as reflected in the condensed
 consolidated statements of operations, to EBITDA:

                        Three Months Ended      Six Months Ended
                              June 30,              June 30,
                        -------------------   -------------------
      ($000)              2004       2003       2004       2003
                        --------   --------   --------   --------
 Net income             $ 45,404   $ 41,840   $121,592   $ 86,075
 Provision for federal
  income taxes            23,900     18,300     62,400     34,311
 Interest expense         18,859     15,412     36,374     28,562
 Depreciation and
  amortization            25,431     22,583     49,641     43,403
                        --------   --------   --------   --------
 EBITDA                 $113,594   $ 98,135   $270,007   $192,351
                        ========   ========   ========   ========

 Note: EBITDA should not be considered a substitute for net
 income, cash flow from operating activities and other operations
 or cash flow statement data prepared in accordance with
 accounting principles generally accepted in the United States or
 as a measure of profitability or liquidity. EBITDA is presented
 to provide additional information with respect to the Company's
 ability to satisfy debt service, capital expenditure and working
 capital requirements. While EBITDA is frequently used as a
 measure of operating results and the ability to meet debt service
 requirements, it is not necessarily comparable to other similarly
 titled captions of other companies due to differences in methods
 of calculation.

 Appendix 3

 Table shows time charter equivalent revenues per day and revenue
 days (defined as ship operating days less lay-up, repair and
 drydock days) for the Company's principal foreign flag segments
 for the second quarter and first half of 2004 compared with the
 same periods of 2003:

                          Three Months Ended   Six Months Ended 
                                June 30,           June 30,
                           -----------------   -----------------
                             2004      2003      2004     2003
                           -------   -------   -------   -------
 VLCC
  Average TCE Rate         $57,163   $48,001   $65,464   $50,328
  Number of Revenue Days     1,557     1,200     3,023     2,250

 AFRAMAX
  Average TCE rate         $28,995   $28,203   $32,626   $30,617
  Number of Revenue days     1,207     1,001     2,349     1,959

 PRODUCT CARRIER
  Average TCE Rate         $16,967   $17,660   $18,149   $16,701
  Number of Revenue Days       514       546       997     1,225

 VLCC revenue days are expected to increase to 1,601 days in the third
 quarter of 2004 and 1,597 in the fourth quarter of 2004.

 Appendix 4

 Equity in Income of Joint Venture Vessels

 The following is a summary of the Company's interest in its
 foreign flag joint ventures. Revenue days are adjusted for OSG's
 percentage ownership in order to state the days on a basis
 comparable to that of wholly-owned vessels:

                      Three Months Ended         Six Months Ended
                            June 30,                  June 30,
                    -----------------------   ------------------------
                       2004         2003         2004         2003
                    ----------   ----------   ----------   -----------
 VLCC
  Equity in Income  $1,103,000   $5,734,000   $2,710,000   $15,469,000
  Number of
   Revenue Days             27          282           80           639

 AFRAMAX
  Equity in Income  $  745,000   $  813,000   $1,802,000   $ 1,854,000
  Number of
   Revenue days             46           45           91            90

 During the first quarter the Company concluded an agreement with
 a joint venture partner equally splitting the ownership of three
 pairs of sister vessels between the two partners, with OSG
 becoming the 100% owner of the VLCCs, Dundee, Sakura I and
 Tanabe. The results of these vessels are now included in the VLCC
 segment. In July 2004, a joint venture in which OSG has a 49.9%
 interest took delivery of four ULCCs.

 The proportional share of revenue days for VLCCs/ULCCs are expected
 to increase to 167 days in the third quarter of 2004 and 212 days
 in the fourth quarter of 2004.

 Appendix 5

 Summary of the Company's foreign and domestic flag fleets as of
 June 30, 2004:

 ---------------------------------------------------------------------
                         Number of Vessels             Dwt
 ---------------------------------------------------------------------
                                    By                         By 
 Type                    Total  % Interest      Total      % Interest
 --------------------------------------------------------------------- 
 Foreign Flag Fleet:
  VLCC:
   100% owned              15      15.0       4,570,358      4,570,358
   Owned jointly with
    others                  1       0.3         259,995         77,999
   Time chartered in        7       3.0       2,109,771        901,892
  Suezmax                   1       1.0         147,501        147,501
  Aframax:
   100% owned              13      13.0       1,354,911      1,354,911
   Owned jointly with
    others                  1       0.5          97,078         48,539
   Time chartered in        2       1.0         210,674        105,338
  Product Carrier           6       6.0         287,934        287,934
  Capesize Bulk Carrier:
   Time chartered in        2       2.0         319,843        319,843

 U.S. Flag Fleet:
  Crude Tanker              3       3.0         275,904        275,904
  Product Carrier           4       4.0         188,810        188,810
  Bulk Carrier, bareboat
   chartered in             2       2.0          51,902         51,902
  Car Carrier               1       1.0          16,141         16,141
 ---------------------------------------------------------------------
 TOTAL                     58      51.8       9,890,822      8,347,072
 ---------------------------------------------------------------------

 Appendix 6

 Summary Consolidated Statements of Operations

                       Three Months Ended        Six Months Ended
                            June 30,                  June 30,
                    ------------------------  ------------------------
     ($000)             2004        2003(a)       2004       2003(a)
                    -----------  -----------  -----------  -----------
 Time Charter
  Equivalent
  Revenues          $   157,061  $   120,297  $   346,043  $   241,427
                    -----------  -----------  -----------  -----------
 Running Expenses
  (including time
  charter hire and
  depreciation)          64,577       49,823      121,897       98,213
 General &
  Administrative          9,406        7,860       23,200       18,533
                    -----------  -----------  -----------  -----------
 Total Ship
  Operating
  Expenses               73,983       57,683      145,097      116,746
                    -----------  -----------  -----------  -----------
 Income from
  Vessel
  Operations
  (100% owned)           83,078       62,614      200,946      124,681
 Equity in Income
  from Joint
  Ventures                3,018        8,142        6,998       20,157
                    -----------  -----------  -----------  -----------
 Operating Income        86,096       70,756      207,944      144,838
 Other Income             2,067        4,796       12,422        4,110
                    -----------  -----------  -----------  -----------
 Income before
  Interest and
  Taxes                  88,163       75,552      220,366      148,948
 Interest Expense        18,859       15,412       36,374       28,562
                    -----------  -----------  -----------  -----------
 Income before
  Taxes                  69,304       60,140      183,992      120,386
 Provision for
  Federal Income
  Taxes                  23,900       18,300       62,400       34,311
                    -----------  -----------  -----------  -----------
 Net Income         $    45,404  $    41,840  $   121,592  $    86,075
                    ===========  ===========  ===========  ===========
 Basic Net Income
  Per Share         $      1.15  $      1.21  $      3.13  $      2.50
 Diluted Net
  Income Per Share  $      1.15  $      1.20  $      3.12  $      2.48
 Weighted Average
  Number of Shares
  (Basic)            39,336,577   34,532,597   38,848,234   34,494,643
 Weighted Average
  Number of Shares
  (Diluted)          39,386,480   34,863,665   38,913,250   34,770,285

     (a)  The condensed consolidated statements of operations for the
          three and six months ended June 30, 2003 has been
          reclassified to conform to the 2004 presentation of certain
          items.

 Appendix 7

 Summary Consolidated Balance Sheets

    ($000)                              June 30,       December 31,
                                          2004             2003
                                       ----------       ----------
 Cash and Cash Equivalents             $  404,509       $   74,003
 Other Current Assets                      92,553           67,420
 Capital Construction Fund                254,659          247,433
 Vessels, including Capital Leases      1,558,257        1,364,773
 Investments in Joint Ventures             40,701          183,831
 Other Assets                              65,274           63,226
                                       ----------       ----------
 Total Assets                          $2,415,953       $2,000,686
                                       ==========       ==========

 Current Liabilities                   $  135,017       $   98,208
 Long-term Debt and Capital Leases        928,330          787,588
 Other Liabilities                        205,801          197,815
 Shareholders' Equity                   1,146,805          917,075
                                       ----------       ----------
                                       $2,415,953       $2,000,686
                                       ==========       ==========

                 -------------------------------------

 The Company plans to host a conference call at 11:00 AM EST on
 Thursday, July 29, 2004 to discuss results for the quarter. All
 shareholders and other interested parties are invited to dial
 into the call, which may be accessed by calling (888) 802-8576
 within the United States, and (973) 935-8515 for international
 calls. A recording of the call will be available for one week at
 (877) 519-4471, if dialed from within the U.S., and at (973)
 341-3080 for international calls; the replay pin number is
 4974013.

                 -------------------------------------
 
 This release contains forward-looking statements regarding the
 Company's prospects, including the outlook for tanker markets,
 changing oil trading patterns, prospects for certain strategic
 alliances, anticipated levels of newbuilding and scrapping, and
 the forecast of world economic activity and world oil demand.
 Factors, risks and uncertainties that could cause actual results
 to differ from expectations reflected in these forward-looking
 statements are described in the Company's Annual Report on Form
 10-K.


            

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