Teekay Tankers Ltd. Reports Second Quarter Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 08/08/13 -- Highlights
Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE: TNK) today reported an adjusted net loss attributable to shareholders of Teekay Tankers(1) (as detailed in Appendix A to this release) of $6.3 million, or $0.08 per share, for the quarter ended June 30, 2013, compared to adjusted net income attributable to shareholders of Teekay Tankers of $0.9 million, or $0.01 per share, for the same period in the prior year. The increase in adjusted net loss attributable to shareholders of Teekay Tankers is primarily the result of the change in employment of certain of the Company's vessels from fixed rates to lower spot rates on expiry of their fixed-rate charters and lower average realized spot tanker rates for the second quarter of 2013 compared to the same period in the prior year. Adjusted net loss attributable to shareholders of Teekay Tankers excludes a number of specific items that had the net effect of decreasing net loss attributable to shareholders of Teekay Tankers by $0.6 million, or $0.01 per share, and increasing net income attributable to shareholders of Teekay Tankers by $0.2 million, or $0.00 per share, for the three month periods ended June 30, 2013 and June 30, 2012, respectively, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, a net loss attributable to shareholders of Teekay Tankers of $5.7 million, or $0.07 per share, for the quarter ended June 30, 2013, compared to a net income attributable to shareholders of Teekay Tankers of $1.1 million, or $0.01 per share, for the quarter ended June 30, 2012. Net revenues(2) were $41.0 million and $50.9 million for the second quarters of 2013 and 2012, respectively.
For the six months ended June 30, 2013, the Company reported an adjusted net loss attributable to shareholders of Teekay Tankers of $9.9 million or $0.12 per share, compared to adjusted net income attributed to the shareholders of Teekay Tankers of $4.0 million or $0.05 per share for the same period in the prior year. The increase in adjusted net loss attributable to shareholders of Teekay Tankers is primarily the result of the change in employment of certain of the Company's vessels from fixed rates to lower spot rates on expiry of their fixed-rate charters and lower average spot realized tanker rates for the first six months of 2013 compared to the same period in the prior year. Adjusted net loss attributable to shareholders of Teekay Tankers excludes a number of specific items that had the net effect of decreasing net loss attributable to shareholders of Teekay Tankers by $2.2 million, or $0.03 per share and increasing net income attributable to shareholders of Teekay Tankers by $1.2 million or $0.02 per share for the six month periods ended June 30, 2013 and June 30, 2012, respectively, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, a net loss attributable to shareholders of Teekay Tankers of $7.7 million, or $0.09 per share, for the six months ended June 30, 2013, compared to a net income attributable to shareholders of Teekay Tankers of $5.2 million, or $0.07 per share, for the six months ended June 30, 2012. Net revenues(2) were $83.1 million and $104.4 million for the six months ended June 30, 2013 and June 30, 2012, respectively.
The Company's financial statements for prior periods include the historical results of the 13 vessels acquired by the Company from Teekay Corporation in June 2012, referred to herein as the Dropdown Predecessor, for the periods when these vessels were owned and operated by Teekay Corporation.
During the second quarter of 2013, the Company generated $5.6 million, or $0.07 per share, in Cash Available for Distribution(3), compared to $8.3 million, or $0.10 per share, in the first quarter of 2013. On July 8, 2013, Teekay Tankers declared its fixed dividend of $0.03 per share for the second quarter of 2013, which was paid on July 31, 2013 to all shareholders of record on July 19, 2013. Since the Company's initial public offering in December 2007, it has declared dividends in 23 consecutive quarters, which now totals $7.245 per share on a cumulative basis.
Summary of Recent Events
First Priority VLCC Mortgage Loans
In July 2010, the Company invested $115 million in two loans maturing in July 2013, secured by first priority mortgages registered on two 2010-built Very Large Crude Carrier (VLCC) newbuildings. The borrowers have been in default on their interest payment obligations since January 2013. As a result, the Company entered into discussions with the borrowers and the second priority mortgagees of the vessels to realize on its security for the loans. In May 2013, Teekay Tankers took over management of the vessels. Currently one of the vessels is trading in the spot tanker market under Teekay Tankers' management while the other vessel remains under detention by authorities in Egypt due to an incident that occurred prior to the transition of vessel management to the Company. The vessel's insurers are in the process of negotiating the release of the vessel, after which it is expected the vessel will commence trading in the spot tanker market under Teekay Tankers' management. In the second quarter of 2013, the Company recorded a $4.5 million loss provision on its investment in these term loans, inclusive of $6.6 million of accrued but unpaid interest as at June 30, 2013, to reflect the estimated loss that could be incurred based on the Company's current estimates of amounts recoverable from future operating cash flows of the vessels and the net proceeds from the sale of the two VLCC vessels.
Long Range 2 Product Tanker Newbuilding Orders
In early April 2013, Teekay Tankers ordered four fuel-efficient 113,000 dead-weight tonne Long Range 2 (LR2) product tankers from STX Offshore & Shipbuilding Co., Ltd. (STX) plus options to order additional vessels. The payment of the first shipyard installment by Teekay Tankers to STX is contingent on the Company receiving acceptable refund guarantees for the shipyard installment payments. In late May 2013, STX commenced a voluntary financial restructuring with its lenders during which STX's refund guarantee applications were temporarily suspended. On July 31, 2013, STX announced it had completed its financial restructuring process. STX has indicated that certain amendments to the terms of the contracts with Teekay Tankers may be required in order to secure the issuance of the refund guarantees. The Company has not agreed to any such amendments. To date, Teekay Tankers has not made any installment payments to STX for the four newbuilding LR2 vessels and, prior to receiving the refund guarantees, Teekay Tankers has the right to cancel the newbuilding orders at its discretion.
Fixed Rate Time-Charter Coverage
In July 2013, Teekay Tankers extended a time-charter out contract for the Aframax tanker, Kanata Spirit, for 12 months at a rate of $15,150 per day. In April 2013, Teekay Tankers commenced a 36-month time-charter out contract for the Aframax tanker, Everest Spirit, at a rate of $15,500 per day.
"A combination of lower spot tanker rates and reduced time-charter revenue resulting from the expiry of two in-the-money time charter-out contracts during the quarter, resulted in lower cash flows in the second quarter compared to the first quarter," commented Bruce Chan, Teekay Tankers' Chief Executive Officer. "During this period of seasonal and cyclical spot tanker market weakness, we continue to focus on maintaining strong fixed-rate coverage for our fleet. In addition to the previously announced Aframax time-charter out contract we entered in April, in July, we extended another Aframax time-charter out contract for one year at a rate of $15,150 per day, which is above current spot Aframax rates. With this contract extension, our forecasted fixed-rate coverage for the next 12 months is approximately 40 percent."
"The status of Teekay Tankers' mortgage loan investment secured by two 2010-built VLCC conventional tankers continues to evolve," Mr. Chan continued. "Since the borrower relinquished commercial and technical management of the vessels to Teekay in May, we have been working with the borrower and the second priority mortgagee to realize on our security. As the first priority mortgage holder, and now manager of the vessels, we believe we are in a strong position to recover our investment and to achieve most of our targeted return on this investment. Currently, one of the two vessels is trading on the spot market generating positive cash flow, while our insurers are working with the authorities to free the second vessel. Once this matter is resolved, we intend to trade this vessel in the spot tanker market for a period of time to cover, at a minimum, our operating costs while evaluating options to recover our investment in the loans."
Mr. Chan continued, "We are confident that our investment in the VLCC mortgage loans will ultimately be realized and be cash flow positive as the spot market rate for VLCCs is currently above cash breakeven levels. Even with these loans outstanding, Teekay Tankers remains financially stable with available liquidity of approximately $255 million as at June 30, 2013 and no significant debt maturities until 2017. With Teekay Tankers' transition to a fixed dividend policy in the first quarter of 2013, an increasing portion of our future operating cash flow will be retained as the tanker market recovers, positioning the Company for continued growth."
Tanker Market
Crude tanker spot rates declined slightly during the second quarter of 2013 and remain at comparatively low levels on a historical basis. In the Suezmax sector, a continued decline in West Africa to U.S. crude movements due to increased U.S. crude production, coupled with a weak VLCC market, put downward pressure on rates. In the Aframax sector, a reduction in Russian seaborne crude exports and a decline in production from North Sea fields due to seasonal maintenance, negatively impacted demand during the second quarter. However, other factors provided support to crude tanker rates during the second quarter, particularly in the Pacific region, as Asian refineries returned from spring maintenance. In the Atlantic basin, weather delays in the U.S. Gulf region tightened vessel supply at times during the second quarter although no significant tropical storm-related disruptions have occurred yet.
Asian naphtha imports averaged one million tonnes per month in the second quarter of 2013, which was positive for LR2 product tanker demand. However, several of the LR2 product tankers which had previously been trading in the crude oil spot market switched and started to compete for clean cargoes, placing downward pressure on LR2 spot rates towards the end of the second quarter.
During the first half of 2013, 14.6 million deadweight tonnes (mdwt) of tankers delivered into the world tanker fleet, the lowest first half delivery total since 2006. The level of tanker removals was relatively low at 4.1 mdwt during the first half of 2013, which resulted in net fleet growth of 10.5 mdwt, or approximately 2.1 percent. The current tanker orderbook of 51 mdwt is the lowest level since February 2001 on an absolute basis, and the lowest since April 1997 on a percentage of the total fleet basis (approximately 10 percent). Since the start of 2013, there has been an increase in new tanker orders, with 12.5 mdwt ordered in the first six months of the year compared to 6.6 mdwt ordered in the same period of 2012. Most of these orders have been for Medium-Range (MR) and LR2 product tankers. Relative to historical levels, the current pace of newbuild tanker ordering remains low compared to the annual average contracting rate of 35.8 mdwt from 2000 to 2012.
The International Monetary Fund (IMF) recently downgraded its outlook for GDP growth in 2013 to 3.1 percent down from 3.3 percent in its previous forecast, and 3.8 percent for 2014, down from 4.0 percent previously. The current outlook for 2013 oil demand growth is a modest increase of 0.9 million barrels per day (mb/d) based on the average of the International Energy Agency (IEA), Energy Information Administration (EIA), and OPEC forecasts. For 2014, the oil demand outlook is more positive, with the IEA, EIA and OPEC forecasting global oil demand growth of 1.2 mb/d, mainly driven by the non-OECD countries and China in particular. However, the call on OPEC is expected to decline by 0.2 mb/d in 2014 as non-OPEC supply growth, led by the U.S., is forecasted to outpace demand growth which could dampen demand for large crude oil tankers.
Operating Results
The following table highlights the operating performance of the Company's time-charter and spot vessels measured in net voyage revenue per revenue day, or time-charter equivalent (TCE) rates, before related-party pool management fees, related-party commissions and off-hire bunker expenses:
Teekay Tankers' Fleet
The following table summarizes the Company's fleet as of August 1, 2013:
Teekay Tankers owns a 50 percent interest in a 2013-built VLCC through a joint venture with Wah Kwong Maritime Transport Holdings Limited which the Company entered into in October 2010. The newbuilding delivered in mid-June 2013 and commenced a time-charter out contract to a major Chinese shipping company for a period of five years. The time-charter includes a fixed floor rate, coupled with a profit-sharing component.
Liquidity
As of June 30, 2013, the Company had total liquidity of $255.5 million (which consisted of $37.7 million of cash and $217.8 million in an undrawn revolving credit facility), compared to total liquidity of $293.5 million as at March 31, 2013.
Conference Call
The Company plans to host a conference call on August 8, 2013 at 1:00 p.m. (ET) to discuss its results for the second quarter of 2013. An accompanying investor presentation will be available on Teekay Tankers' website at prior to the start of the call. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:
The conference call will be recorded and available until Thursday, August 15, 2013. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 8920367.
About Teekay Tankers
Teekay Tankers currently owns a fleet of 31 double-hull vessels, including 11 Aframax tankers, 10 Suezmax tankers, seven Long Range 2 (LR2) product tankers (including four committed newbuildings), three Medium-Range (MR) product tankers and has one time-chartered in Aframax tanker, all of which vessels an affiliate of Teekay Corporation (NYSE: TK) manages through a mix of short- or medium-term fixed-rate time-charter contracts and spot tanker market trading. The Company also owns a Very Large Crude Carrier (VLCC) through a 50 percent-owned joint venture. Teekay Tankers was formed in December 2007 by Teekay Corporation as part of its strategy to expand its conventional oil tanker business.
Teekay Tankers' common stock trades on the New York Stock Exchange under the symbol "TNK."
TEEKAY TANKERS LTD.
APPENDIX A - SPECIFIC ITEMS AFFECTING NET (LOSS) INCOME
(in thousands of U.S. dollars, except per share amounts)
Set forth below is a reconciliation of the Company's unaudited adjusted net (loss) income attributable to the shareholders of Teekay Tankers, a non-GAAP financial measure, to net (loss) income as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company's financial results. Adjusted net (loss) income attributable to the shareholders of Teekay Tankers is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
TEEKAY TANKERS LTD.
APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE CASH AVAILABLE FOR DISTRIBUTION
(in thousands of U.S. dollars, except share and per share data)
Description of Non-GAAP Financial Measure - Cash Available for Distribution
Cash Available for Distribution represents net (loss) income, plus depreciation and amortization, unrealized losses from derivatives, non-cash items and any write-offs or other non-recurring items, less unrealized gains from derivatives and net income attributable to the historical results of vessels acquired by the Company from Teekay Corporation for the period when these vessels were owned and operated by Teekay Corporation.
TEEKAY TANKERS LTD.
APPENDIX C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE NET REVENUES (in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Net Revenues
Net revenues represents revenues less voyage expenses where voyage expenses is comprised of all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies; however, it is not required by GAAP and should not be considered as an alternative to revenues or any other indicator of the Company's performance required by GAAP.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the crude oil and refined product tanker market fundamentals, including the balance of supply and demand in the tanker market, spot tanker rates and the potential for a tanker market recovery; the strength of the Company's financial position and its ability to take advantage of a tanker market recovery; the Company's fixed coverage for the 12 months commencing June 30, 2013; the timing and certainty of the Company receiving a refund guarantee for the four LR2 newbuildings ordered from STX in April 2013 and the potential for Teekay Tankers to amend the contract terms or cancel these vessel orders prior to the time such a refund guarantee is provided; the timing and certainty for the potential sale of these VLCC vessels; the timing and certainty of the insurer of one of the VLCC mortgage loan security vessels coming to an agreement with the Egyptian authorities to free the VLCC vessel, enabling it to trade in the spot tanker market; the ability of Teekay Tankers, the technical and commercial manager of the VLCC mortgage loan security vessels, to generate positive cash flows and continue to earn a rate above the cash breakeven cost of these vessels in the future; and the impact of the fixed dividend on retaining more operating cash flow for investment in future growth.
The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in the production of or demand for oil; changes in trading patterns significantly affecting overall vessel tonnage requirements; lower than expected levels of tanker scrapping; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of short- or medium-term contracts and inability of the Company to renew or replace short- or medium-term contracts; changes in interest rates and the capital markets; failure of STX to provide a refund guarantee for the four newbuilding LR2 product tankers ordered by the Company in April 2013; the nature and extent of any amendments to the contract with STX required to secure the refund guarantees; the ability of the Company to have access to and charter and/or sale at acceptable rates or amounts, if at all, the two VLCCs that collateralize the two first-priority ship mortgage loans; increases in the Company's expenses, including any dry docking expenses and associated off-hire days; the ability of Teekay Tankers' Board of directors to establish cash reserves for the prudent conduct of Teekay Tankers' business or otherwise; failure of Teekay Tankers Board of Directors and its Conflicts Committee to accept future acquisitions of vessels that may be offered by Teekay Corporation or third parties; and other factors discussed in Teekay Tankers' filings from time to time with the United States Securities and Exchange Commission, including its Report on Form 20-F for the fiscal year ended December 31, 2012. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
Contacts:
Teekay Tankers Ltd.
Investor Relations
Kent Alekson
+1 (604) 844-6654
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Datum: 08.08.2013 - 12:30 Uhr
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