A higher number of dry dockings and repairs combined with lower charter rates on three vessels pushed down third-quarter earnings for Teekay LNG Partners.
Reporting its result for the three months to the end of September, the New York-listed shipowner said the weaker figures were primarily due to more scheduled dry-dockings and higher planned repairs and maintenance expenses.
The gas carrier owner also cited lower earnings from three LNG carriers which were fixed out at weaker charter rates.
But Vancouver-headquartered Teekay LNG said one of these vessels has since been rechartered at a higher rate in October.
The company added that the fall in earnings was partially offset by lower net interest and administrative expenses.
Teekay LNG’s third quarter net income slumped to $40.1m from $50.4m in the same period last year.
Voyage revenue wwas marginally lower at $148.9m from $149.7m in third quarter 2019.
Teekay Gas Group president and chief executive Mark Kremin said: “We expect our earnings and cash flows to increase in the fourth quarter of 2020 and we continue to be on track to meeting the 2020 financial guidance we provided earlier this year.”
Kremin said the company is delivering on several of its strategic priorities.
The said that during the third quarter Teekay LNG slashed its net debt by almost $95m and cut total net interest expense by over $6m, adding that he expects these reductions to continue.
Kremin said during the quarter the charterer of the company’s 52%-owned, 165,500-cbm Marib Spirit (built 2008) exercised its options to extend the current charter by 14 months at a higher charter rate, extending the vessel's charter coverage to early-2022.
“We approach the end of the year with the confidence that we have already secured fixed-rate contracts for our LNG fleet covering 96% of 2021, providing the partnership with high fleet utilisation and stable cash flows,” he said.
The CEO thanked the company’s seafarers and onshore colleagues for their “continued dedication” during the Covid-19 pandemic.
“I am pleased to report that, with the reopening of many jurisdictions during the summer months, we were able to successfully transition nearly all of our crew members across the fleet.”
Teekay LNG, a spin-off of Teekay Corp, operates an owned and chartered in fleet of 77 vessels comprising 47 LNG carriers, 23 mid-size LPG carriers, and seven multi-gas ships.
The partnership’s stakes in the vessels range from 20% to 100%.
In addition, Teekay LNG owns a 30% interest in Bahrain’s LNG regasification terminal.
