Teekay Tankers Ltd. reported the Company’s results for the quarter ended September 30, 2022:
Third Quarter of 2022 Compared to Second Quarter of 2022
GAAP net income and non-GAAP adjusted net income for the third quarter of 2022 increased compared to the second quarter of 2022, primarily due to higher average spot tanker rates, partially offset by a higher number of scheduled dry dockings in the third quarter of 2022. In addition, GAAP net income in the third quarter of 2022 included a $8.2 million gain on the sale of one vessel compared to a $1.2 million gain on the sale of two vessels recorded as part of the GAAP net income in the second quarter of 2022.
Third Quarter of 2022 Compared to Third Quarter of 2021
GAAP net income and non-GAAP adjusted net income for the third quarter of 2022 increased compared to the same period of the prior year, primarily due to higher average spot tanker rates and stronger results from full service lightering, as well as the commencement of three charter-in contracts during the second half of 2021 and the third quarter of 2022. In addition, GAAP net income in the third quarter of 2022 included a $8.2 million gain on the sale of one vessel, while GAAP net loss in the third quarter of 2021 included a net expense of $0.7 million relating to the write-down and a gain on sale of vessels.
CEO Commentary
“In the third quarter, Teekay Tankers’ financial results materially benefited from our high spot exposure during a time of pronounced tanker market strength, counter to typical seasonal trends,” commented Kevin Mackay, Teekay Tankers’ President and CEO.
“While the full European sanctions on imports from Russia are expected to come into effect in the months ahead, mid-sized tankers have already shown themselves to be disproportionate beneficiaries of shifting oil trade patterns. Since the onset of the war in Ukraine, long-established oil trade routes have been fundamentally disrupted in a manner that seems likely to persist. Average Aframax and Suezmax voyage distances have materially lengthened and driven charter rates higher on a sustained basis, even as VLCC rates have widely fluctuated in response to oil market events.”
“The wider macro environment has sources of uncertainty, notably the widening ripples from the war in Ukraine and continuing heightened inflation across a range of global economies, as well as the potential for normalized economic activity in China after extensive pandemic-related lockdowns. Nevertheless, we see strong fundamental support for continued tightness in our market moving forward, particularly as a result of the record low mid-sized tanker orderbook through at least 2025.”
“Against this backdrop, Teekay Tankers is utilizing its cash flows to materially strengthen its balance sheet, sustainably reduce our net debt and fleet cash flow break-even levels, and position Teekay Tankers to create long- term shareholder value.”
Summary of Recent Events
In September and October 2022, the Company made $44.9 million in prepayments and fully repaid a term loan related to four vessels. The prepayments were made with existing liquidity and the four vessels will be unencumbered.
In September 2022, the Company completed the previously mentioned sale of a 2008-built Aframax vessel for $24.8 million, which resulted in a gain on sale of $8.2 million.
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(1) per revenue day, or time-charter equivalent (TCE) rates, before off-hire bunker expenses.
Liquidity Update
As at September 30, 2022, the Company had total liquidity of $252.0 million (comprised of $78.0 million in cash and cash equivalents and $174.0 million in undrawn capacity from its credit facilities), compared to total liquidity of $228.4 million as at June 30, 2022.
Full Report
Source: Teekay Tankers