Thursday, 23 January 2020 | 11:25
SPONSORS
View by:

Teekay Tankers Ltd. Reports Second Quarter 2019 Results

Friday, 02 August 2019 | 00:00

Teekay Tankers Ltd. yesterday reported the Company’s results for the quarter ended June 30, 2019:

Consolidated Financial Summary

(1) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under United States generally accepted accounting principles (GAAP).

Second Quarter of 2019 Compared to First Quarter of 2019

During the second quarter of 2019, the Company reported a GAAP net loss and a non-GAAP adjusted net loss compared to GAAP net income and non-GAAP adjusted net income in the prior quarter. The change was primarily due to lower average spot tanker rates and more scheduled dry dockings in the second quarter of 2019.

Second Quarter of 2019 Compared to Second Quarter of 2018

GAAP net loss and non-GAAP adjusted net loss for the second quarter of 2019 improved compared to the GAAP net loss and non-GAAP adjusted net loss for the same period of the prior year, primarily due to higher average spot tanker rates, partially offset by more scheduled dry dockings and higher interest expense associated with the three sale-leaseback transactions that were completed between September 2018 and May 2019.

CEO Commentary

“As expected, crude tanker spot rates declined during the second quarter of 2019 mainly due to seasonal factors and some near-term headwinds; however, crude tanker spot rates were up compared to the same period of the prior year, reflecting tighter market fundamentals, and were the highest second quarter rates since 2016,” commented Kevin Mackay, Teekay Tankers' President and Chief Executive Officer. “Lower OPEC oil production and heavier than normal refinery maintenance as refineries prepare for the implementation of the new IMO 2020 standards impacted crude tanker demand, which we expect will continue into the early part of the third quarter. However, these headwinds were partially offset by continued strong growth of U.S. crude oil exports which bolstered our full-service lightering business and drove our Aframax crude tanker spot rates to average over $20,000 per day during the second quarter, which was above our peer group and benchmarks. We expect this strength to continue into the third quarter as additional pipeline capacity comes online, allowing U.S. crude oil exports to further increase.”

“We continue to believe that tanker market fundamentals support a market recovery in the latter part of the year and into 2020 due to projected underlying oil demand growth, an expected increase in U.S. crude oil exports, significantly higher refinery throughput ahead of IMO 2020 regulations, and lower tanker fleet growth. With healthy liquidity, a market-leading position and significant operating leverage, we believe we are well-positioned to benefit from a tanker market recovery.”

Operating Results

The following table highlights the operating performance of the Company's time-charter vessels and spot vessels trading in revenue sharing arrangements (RSAs), voyage charters and full service lightering, in each case measured in net revenues(v) per revenue day, or time-charter equivalent (TCE) rates, before off-hire bunker expenses:

I. Revenue days are the total number of calendar days the Company’s vessels were in its possession during a period, less the total number of off-hire days during the period associated with major repairs, dry dockings or special or intermediate surveys. Consequently, revenue days represents the total number of days available for the vessel to earn revenue. Idle days, which are days when the vessel is available to earn revenue but is not employed, are included in revenue days.
II. Includes vessels trading in the Teekay Suezmax RSA, Teekay Suezmax Classic RSA and non-pool voyage charters.
III. Includes vessels trading in the Teekay Aframax RSA, Teekay Aframax Classic RSA, non-pool voyage charters and full service lightering voyages.
IV. Includes vessels trading in the Teekay Taurus RSA and non-pool voyage charters.
V. Net revenues is a non-GAAP financial measure. Please refer to “Definitions and Non-GAAP Financial Measures” for a definition of this term.

Third Quarter of 2019 Spot Tanker Rates Update

Below is Teekay Tankers' spot tanker fleet update for the third quarter of 2019 to-date:

• The portion of the Suezmax fleet trading on the spot market has secured TCE rates per revenue day of approximately $15,600 on average, with 37 percent of the available days fixed(1);
• The portion of the Aframax fleet trading on the spot market has secured TCE rates per revenue day of approximately $12,800 on average, with 37 percent of the available days fixed(2); and
• The portion of the Long Range 2 (LR2) product tanker fleet trading on the spot market has secured TCE rates per revenue day of approximately $12,200 on average, with 32 percent of the available days fixed(3).
(1) Combined average TCE rate includes Teekay Suezmax RSA, Teekay Suezmax Classic RSA and non-pool voyage charters.
(2) Combined average TCE rate includes Teekay Aframax RSA, Teekay Aframax Classic RSA, non-pool voyage charters and full service lightering voyages.
(3) Combined average TCE rate includes Teekay Taurus RSA and non-pool voyage charters.

Teekay Tankers' Fleet

The following table summarizes the Company's fleet as of July 31, 2019 (excluding one time chartered-in vessel that is scheduled to be delivered to the Company in the third quarter of 2019):

I. Includes three Aframax tankers with charter-in contracts that are scheduled to expire in November 2019, December 2019 and March 2021, respectively.

II. Includes two LR2 product tankers with charter-in contracts that are scheduled to expire in January 2021, each with an option to extend for one additional year.

III. The Company's ownership interest in this vessel is 50 percent.
Liquidity Update

As at June 30, 2019, the Company had total liquidity of $119.5 million (comprised of $35.4 million in cash and cash equivalents and $84.1 million in undrawn capacity from its revolving credit facilities and the undrawn portion of a loan, which is determined based on certain borrowing criteria, to finance its pool management operations) compared to total liquidity of $116.2 million as at March 31, 2019.

Full Report

Source: Teekay Tankers

Comments
    There are no comments available.
    Name:  
    Email:  
    Comment:  
     
    In order to send the form you have to type the displayed code.

     
SPONSORS

NEWSLETTER