Canada's Teekay Corp has come through the coronavirus pandemic almost unscathed so far as it pays down debt in booming tanker markets.
Borrowings were cut by more than $580m as a result of strong operating cash flows, proceeds from asset sales and a new FPSO contract.
Liquidity stands at more than $900m, with no committed capital expenditures or significant upcoming debt maturities.
"We believe that the Teekay Group is financially well-positioned for both any potential market volatility in the near-term and the longer-term future of marine energy transportation," it said.
Vancouver-based Teekay Corp's results include gains from its ownership in spin-offs Teekay LNG and Teekay Tankers, plus its own FPSOs and tugs, and its Danish LNG carrier joint venture MALT Holdings.
Net earnings were $52m in the first quarter, compared to a loss of $61.4m in the same period of 2019.
Ebitda included $22.3m related to Teekay Corp's ownership interest in Altera, the former Teekay Offshore, which was sold in the second quarter of 2019 to Brookfield Business Partners.
There was a record result at spin-off Teekay LNG as it secured three new charters, meaning the company has all its ships fixed out with 100% coverage for the rest of 2020, and 94% for 2021.
And Teekay Tankers reported its highest profit in more than 10 years as tanker rates soared.
Minimal impact from outbreak
Kenneth Hvid, Teekay Corp chief executive, said: "While Covid-19 is having an unprecedented impact on the world and is clearly a major focus for us throughout the Teekay Group, we are fortunate to be in a position where our operating results have increased to date in 2020 and we have had minimal impacts on our operations due to the pandemic."
Teekay Corp's directly-owned FPSO units performed better, primarily due to a new bareboat contract structure for the Foinaven unit secured in March with BP for up to 10 years. This involved an up-front payment of $67m.
"We de-levered our balance sheet with the $67m in proceeds received in April 2020 as part of the Foinaven FPSO unit’s new contract that effectively covers the remaining life of the unit," Hvid added.
"Looking ahead to the second quarter of 2020, we are expecting another strong quarter supported by our stable LNG cash flows and the firm tanker rates we have already secured in the second quarter of 2020."
