New York-listed tanker and LNG carrier group Teekay Corp has posted a lower loss in the first quarter despite a fall in revenue.
The company said the net deficit attributable to shareholders was $20.55m this year, down from $45.25m in 2017.
Revenue was cut to $394m from $543m, but the company was helded by currency exchange gains, cheaper interest patments and more equity income.
The group has a total of $1.48bn of liquidity.
CEO Kenneth Hvid said the improvement was also driven by higher cash flows from its FPSO units that have upside exposure to oil prices and production, and the delivery and contract start-up of several growth projects across the group, partially offset by weaker crude tanker rates.
“Having focused on the execution and financing of our sizeable Teekay Group project portfolio over the past two years, we are now starting to see these projects deliver and generate cash flow,” he added.
“We believe that our LNG and offshore businesses are at a positive inflection point and we remain encouraged by the improving fundamentals in our tanker business as we approach 2019.”
Subsidiary Teekay LNG has taken delivery of seven LNG carriers in recent months, all on long-term charters.
“We believe Teekay LNG is in the early innings of a multi-year cash flow ramp-up with an additional 11 LNG carriers and a regasification facility scheduled to start-up through early-2020, which we expect will also allow us to naturally delever our balance sheet," Hvid said.
“While tanker rates are expected to remain weak in the near-term, we are anticipating a gradual improvement in fleet utilisation and tanker rates from late-2018. With significant operating leverage, we believe Teekay Tankers has considerable upside from a cash flow and valuation perspective as the tanker market strengthens.”
Teekay Tankers' result dropped, primarily due to lower average spot tanker rates and the expiry of time-charter contracts for various vessels, which have subsequently traded on spot voyages at lower rates in the first quarter of 2018.
