Teekay Tankers is buying its parent’s Australian management services for $65m and splashing an unidentified amount of cash for all other management operations currently held by the owner.
The intra-group moves highlighted a third-quarter earnings report in which Teekay Tankers reported a profit that fell below consensus analyst projections.
New chief executive Kenneth Hvid said the buys pave the way for Teekay Tankers to become a fully integrated shipowner and the sole vessel-operating platform within the group.
Hvid assumed the top chair at New York-listed Teekay Tankers in addition to his CEO position at parent Teekay Corp in August after Teekay Tankers parted ways with chief executive Kevin Mackay and chief financial officer Stewart Andrade.
“Over the past few years, the Teekay Group has taken several important steps to streamline the organisation, including the recent changes to our management team structure,” Hvid said in the earnings statement.
“With the planned accretive acquisition by Teekay Tankers of Teekay Australia — the Group’s asset-light ship management operations primarily servicing the Australian Government that currently generates approximately $10m in annual Ebitda — Teekay Tankers becomes the sole operating platform within the Teekay Group.”
As to the second group of acquisitions, Teekay Tankers said it would acquire the unnamed management companies “at their net working capital value, transforming Teekay Tankers into a fully integrated shipping company containing all shore-based employees and seafarers in one platform”.
Teekay Tankers reported adjusted net income of $63.5m or $1.84 per share, which fell short of consensus analyst expectations of $1.96 per share.
Adjusted Ebitda of $75.9m trailed the consensus of $85.6m.
Adjusted net income fell from $76.6m in the third quarter of 2023.
Revenue of $243.3m decreased from $285.9m.
Teekay Tankers’ guidance for the current quarter showed rates had dropped in both of its main operating classes: suezmaxes and aframaxes/LR2s.
Suezmaxes dipped to $29,700 from $31,024 with 45% of days booked.
Aframaxes/LR2s ticked down to $35,500 from $35,876 with 37% of days fixed.
“Teekay Tankers continued to generate strong earnings and free cash flow through the third quarter, as rates remained historically strong for what is typically the weakest quarter of the year,” Hvid said.
“Tanker tonne-mile demand has remained firm, near-term fleet supply growth remains limited, and we are seeing several of the market’s seasonal headwinds already transitioning into tailwinds for the fourth quarter.”