Cash-rich and soon to be debt-free, Teekay Tankers is keeping its options open as to how it will reinvest its profit.
The biggest owner of midsize crude tankers may even contemplate a move into other shipping sectors, according to chief executive Kevin Mackay.
“If we end up in a situation where we have a lot of capital to deploy and the window isn’t open for tankers, but there are other opportunities in other segments, then of course, as a company, we would consider wherever we can create shareholder value,” he told an earnings call.
“But we are a tanker company and that’s what we’ve been focused on. And at the moment, there’s no intention to pivot away from that.”
Teekay Tankers will be net debt-free this quarter after buying back the last of its fleet financed through leasebacks.
The New York-listed company said on Thursday that it is spending $137m to repurchase eight tankers, without specifying the ships.
Asked what comes next for the shipowner, Mackay replied: “It’s a good question. And I think it’s really more of the same.
“Our strategy is to continue to both build the strong cash position to reinvest in our fleet and … our business, and to reward shareholders through some of the capital allocation tools that we laid out in our capital allocation plan.”
Share buybacks are also “in the tool bag … we are agnostic [as] to where we can bring the most value to shareholders over time”.
Robust tanker market over next few years
Discussions at management and board level have centred on small or large acquisitions, and more ship sales.
“Asset prices are quite high. We also have a view that the tanker market is going to be very robust over the next few years,” Mackay told the call.
“Part of the consideration is always what are you paying for those assets, how much cash flow can you generate from them over the next few years.
“I don’t think that we’ve closed the book on the opportunity to buy vessels. It’s something that we’re always evaluating.
“With our growing financial strength, we look at all sorts of opportunities, including the potential to acquire fleets, mergers and acquisitions, everything.”
He said the company is committed to reinvestment.
“If we can do it sooner and there are opportunities that we think will create value for shareholders, then we’ll go ahead and do that. If we have to be more patient and wait, then we’ll do that,” he added.
“Our eyes are always open and we’re looking for opportunities.”
