New York-listed Teekay Tankers says rates secured so far in the third quarter are up to five times higher than the same period of last year.
The company revealed “strong” spot figures of $29,600 per day for 43% of suezmax days so far in the July to August period, with aframaxes at $35,600 for 37% of fleet days, and LR2s at $35,400 for 37% of days.
Rates for the second quarter came in at $25,310 for suezmaxes, $25,115 for aframaxes and $26,690 for LR2s.
Chief executive Kevin Mackay said: “The strength in spot rates has continued into the third quarter, where rates booked to date are tracking higher than the second quarter.”
“While we expect continued volatility, the strong fundamentals that we saw building prior to the pandemic seem at last to be reasserting themselves in ways that are supportive of a firmer tanker market,” he added.
He believes the positive effects of route disruption from the Ukraine war will continue.
“Given both the draft restrictions and parcel sizes in many of the most impacted ports, this newly created tonne-mile demand has disproportionately benefited mid-sized tankers, driving rates to their highest level in two years,” the CEO said.
“Following the tanker downturn that has persisted throughout much of the Covid-19 era, we are pleased to have returned to profitability in the second quarter as our high operating leverage and spot market exposure enabled us to quickly capture charter rates that have now risen to several times their prior-year levels,” Mackay added.
Net profit in the second quarter was $28.5m, against a loss of $129.1m in 2021, due to higher average spot rates and a lower number of scheduled drydockings.
Revenue jumped to $242m from $123m over the same period.
Balance sheet to be strengthened
Uncertainty remains over further Covid-19 lockdowns in China, the ongoing war in Ukraine and concerns about a potential recession, the company said.
Mackay added that Teekay Tankers will use increased cash flows to continue “fortifying” the balance sheet, “prioritising our long-term financial strength and ability to act opportunistically moving forward, which we believe will maximise shareholder value.”
Fearnley Securities said Ebitda of $59m was in line with expectations.
Forward bookings “bode well” for a strong quarter, the investment bank added.
Brokers had reported the sale of the 114,800-dwt aframax Matterhorn Spirit (built 2005), one of the oldest tankers in its fleet, in July to Middle East interests.
The price of $24.8m was confirmed by the company, and the profit from the deal will be $8m.
Teekay Tankers operates 45 tankers, including 25 suezmaxes and 11 owned aframaxes.
There is also one VLCC controlled through a joint venture.