Teekay Tankers, an owner and operator of 54 tankers, posted a robust but sliding profit in the second quarter while maintaining a bullish outlook for its market.
Net income at the New York-listed company dropped to $107m from $151.2m in the second quarter of 2023.
Teekay Tankers attributed the fall to a combination of factors, including a lower spot market, where it employs 50 of its 54 tankers, a smaller fleet following the sale of ships and a higher number of scheduled dry-dockings.
First-quarter profit also included an $11.6m gain from a vessel divestment, which the company did not repeat in the second quarter.
Teekay Tankers maintained a positive outlook.
According to a company presentation, tanker spot rates so far in the third quarter exceed the levels achieved in the corresponding period of 2023.
Average spot rates for suezmaxes climbed to $40,800 per day so far in this quarter, compared with $35,000 per day last year.
The improvement was even stronger in aframaxes and LR2s, with $45,300 per day versus $36,600 per day last year.
Teekay Tankers president and chief executive Kevin Mackay spoke of “historically high spot charter rates for [the company's] suezmax and aframax-sized fleets”, supported by “underlying fundamentals and… strong utilisation levels within the midsize tanker segment specifically”.
“With the Trans Mountain Pipeline [TMX] expansion continuing to ramp up towards one aframax cargo per day, vessel attacks in the Red Sea continuing to divert ships, and a newbuilding delivery schedule that is very low in historical terms, the midsize tanker market is expected to remain well supported through the remainder of 2024,” MackKay added.
Teekay Tankers’s owned fleet of 44 tankers consists of one VLCC, 25 suezmaxes and 17 aframaxes.
The company also has 10 chartered-in vessels: one suezmax, seven aframaxes or LR2s and two ship-to-ship support vessels for its transfer business that performs full-service lightering and lightering support operations in the US Gulf and Caribbean.
“With high operating leverage to the spot tanker market and a debt-free balance sheet, Teekay Tankers expects to continue generating significant free cash flow, supporting our ability to prudently reinvest in our fleet, return capital to shareholders and maintain financial strength,” he said.
TradeWinds reported on Wednesday how the company spent $70.5m on the acquisition of the 113,000-dwt Orchid Spirit (ex-Stirling, built 2021) — a modern aframax acquired from Union Maritime.
Most of the cash Teekay Tankers uses for such buys comes from “redeploying capital from selling some older vessels”, according to MacKay, whose company also revealed on Wednesday the sale of 115,500-dwt Eric Spirit (built 2005) and the 160,000-dwt Seoul Spirit (built 2005) for $64.8m in total.
Teekay announced a dividend of $0.25 per outstanding share of common stock.
