Teekay LNG has reported a jump in adjusted profit for the fourth quarter, pushing its 2020 earnings to a new record.

The New York-listed gas carrier reported adjusted net income of $60m, up from $50.3m a year earlier.

Bottom line slumps

But bottom-line net income came in at $35.1m, which was a plunge from $67.4m as a result of write-downs of its LPG and multigas carriers in the final quarter of last year.

The result pushed Teekay LPG's full-year adjusted net income to a record $233.8m, up from $168.7m in 2019. But the bottom-line net income fell to $87.4m for the year, down from $152.8m.

Voyage revenue in the fourth quarter of 2020 was $154m compared to $148.7m in the same period in 2019.

Despite a difficult year for LNG markets, the Teekay Corp spin-off said it has benefited from its policy of fixing in almost all of its tonnage to charter commitments.

In early December 2020, Teekay LNG secured a fixed-rate charter for the 52%-owned 165,500-cbm Methane Spirit (built 2008), stretching its employment to early 2023. As a result, the company now has 97% of its fleet fixed until the end of 2021 and 89% chartered until the end of 2022.

Teekay LNG chief executive Mark Kremin said: “For both the fourth quarter and fiscal year 2020, we generated strong earnings and cash flows resulting in the highest-ever recorded annual adjusted results for Teekay LNG.”

He credited the company’s conservative chartering strategy for the earnings performance.

“During a year which saw extreme volatility in gas prices, LNG shipping rates and equity markets, our strategy of chartering substantially all of our LNG fleet on long-term contracts helped us to achieve consistently strong results throughout the year, and to maintain certainty and forward visibility amid the unprecedented uncertainty and volatility that impacted many others in the broader energy space in 2020,” he said.

Teekay LNG also reduced its net debt by $558m during 2020 and finished the financial year with a positive liquidity balance of $460m.

Teekay is upbeat about the future, predicting a 30% increase in demand for natural gas in the long term as a result of Asian growth and the transition from coal to gas.

Eric Martin contributed to this story.