New York-listed Teekay Tankers is buying back more leased vessels as it seeks to reduce financial costs following a loss-making first quarter.
The company has exercised options to repurchase six aframaxes currently on long-term sale-and-leaseback deals at a total cost of $129m.
The unnamed vessels should be redelivered in September.
The move follows its decision to buy back two leased suezmaxes for $57m earlier this year.
Teekay Tankers said it intends to fund the deals with new sale-and-leaseback transactions, as well as existing liquidity.
Chief executive Kevin Mackay said talks are ongoing about these new leasebacks.
Liquidity stays strong
"With a strong liquidity position, decreasing cost of capital, low balance sheet leverage, no significant debt maturities until 2024 and high operating leverage, we believe that Teekay Tankers is well positioned to weather the current market challenges and benefit from an anticipated tanker market recovery," he said.
The net loss in the first quarter was $21.4m, compared to a $106.8m profit a year ago.
Falling rates led revenue to drop to $142.7m, versus $341.9m in the first three months of 2020.
Mackay said spot earnings were better than the fourth quarter, but were generally weak.
This was blamed on ongoing Opec+ production cuts resulting from reduced oil demand related to the Covid-19 pandemic, as well as the continued unwinding of floating storage.
"However, we did experience some pockets of strength in the midsize crude tanker sector during the latter part of the first quarter as a result of weather-related disruptions and the short-lived Suez Canal blockage," Mackay said.
The company observed that the softness has persisted so far in the second quarter.
But Teekay Tankers sees positive indicators for a tanker recovery this year, including improvements in the global economy, rapidly falling oil inventories and a small newbuilding orderbook.
Profit up for parent
Parent Teekay Corp logged net profit of $29.95m in the first quarter, from a deficit of $49.8m a year ago.
Chief executive Kenneth Hvid said the company is making "significant progress towards our strategic goal of winding down our FPSO [floating production, storage and offloading] segment".
The 300,000-barrel floating production unit Foinaven will be redelivered by BP in the first half of 2022 as the oil major suspends production on the Foinaven field.
"Following the redelivery, we expect to green-recycle the unit, with the associated costs expected to be covered by a fixed contractual lump-sum payment from the customer," Hvid said.
