July 29, 2004

OSG earnings soar

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.

OSG is one of the largest tanker owners in the world and the leading U.S. based tanker company.

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.

At June 30, 2004, the OSG 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.

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.

"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," said Arntzen.

This month, a joint venture in which OSG holds a 49.9% interest took delivery of four 442,000 dwt Ultra Large Crude Carriers built in 2002 and 2003. Built for a 40-year life expectancy, each can each transport 3.2 million barrels of crude oil. The ships are the only double hull ULCCs in the world.

Arntzen noted that 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," said Arntzen. He added that seven VLCCs and two Aframaxes that OSG 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," noted Arntzen, "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."

Arntzen said that OSG is "considering opportunities in other bulk shipping segments, such as chemical parcel tankers and LNG. The Company remains firmly committed to disciplined and intelligent growth."

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