Teekay Tankers Ltd. Reports Third Quarter Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 11/07/13 -- 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 $4.0 million, or $0.05 per share, for the quarter ended September 30, 2013, compared to adjusted net loss attributable to shareholders of Teekay Tankers of $7.7 million, or $0.09 per share, for the same period in the prior year. The decrease in adjusted net loss attributable to shareholders of Teekay Tankers is primarily due to a decrease in depreciation expense as a result of vessel impairments recorded in the fourth quarter of 2012 and stronger Aframax spot rates in the third quarter of 2013 compared to the same period of the prior year, partially offset by 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, lower average realized spot tanker rates for Suezmax and LR2 vessels and a reduction in interest income earned from the Company's investment in term loans. Adjusted net loss attributable to shareholders of Teekay Tankers excludes a number of specific items that had the net effect of increasing net loss attributable to shareholders of Teekay Tankers by $10.6 million, or $0.12 per share, and $2.0 million, or $0.03 per share, for the three month periods ended September 30, 2013 and September 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 $14.6 million, or $0.17 per share, for the quarter ended September 30, 2013, compared to a net loss attributable to shareholders of Teekay Tankers of $9.7 million, or $0.12 per share, for the quarter ended September 30, 2012. Net revenues(2) were $39.0 million and $43.9 million for the quarters ended September 30, 2013 and September 30, 2012, respectively.
"Relatively stronger spot tanker earnings and lower vessel operating expenses resulted in higher cash flows for Teekay Tankers in the third quarter compared to the second quarter," commented Bruce Chan, Teekay Tankers' Chief Executive Officer. "During this period of spot tanker market weakness, we continue to focus on the strong fixed-rate coverage of our fleet as demonstrated by our previously announced one-year Aframax time-charter out extension at a rate of $15,150 per day. This contract extension preserves our forecasted fixed-rate coverage at approximately 40 percent for the next 12 months and 35 percent for fiscal 2014."
Mr. Chan continued, "Due to our fixed-rate charter coverage, available liquidity of approximately $226 million as at September 30, 2013 and no significant debt maturities until 2017, we believe Teekay Tankers is financially stable and well-positioned to benefit from a tanker market recovery. In addition, with Teekay Tankers' transition to a fixed dividend policy in the first quarter of this year, an increasing portion of our future operating cash flow will be retained as the tanker market recovers, positioning the Company for future growth."
For the nine months ended September 30, 2013, the Company reported an adjusted net loss attributable to shareholders of Teekay Tankers of $13.9 million, or $0.17 per share, compared to adjusted net loss attributed to the shareholders of Teekay Tankers of $3.7 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 due to 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, lower average spot realized tanker rates for the first nine months of 2013 compared to the same period in the prior year and a reduction in interest income earned from the Company's investment in term loans, partially offset by a decrease in depreciation expense as a result of vessel impairments recorded in the fourth quarter of 2012. Adjusted net loss attributable to shareholders of Teekay Tankers excludes a number of specific items that had the net effect of increasing net loss attributable to shareholders of Teekay Tankers by $8.4 million, or $0.1 per share, and $0.8 million or $0.01 per share, for the nine month periods ended September 30, 2013 and September 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 $22.3 million, or $0.27 per share, for the nine months ended September 30, 2013, compared to a net loss attributable to shareholders of Teekay Tankers of $4.4 million, or $0.06 per share, for the nine months ended September 30, 2012. Net revenues(2) were $122.1 million and $148.3 million for the nine months ended September 30, 2013 and September 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, which includes all of 2012.
During the third quarter of 2013, the Company generated $8.7 million, or $0.10 per share, of Cash Available for Distribution(3), compared to $5.6 million, or $0.07 per share, in the second quarter of 2013. On October 4, 2013, Teekay Tankers declared its fixed dividend of $0.03 per share for the third quarter of 2013, which was paid on October 25, 2013 to all shareholders of record on October 16, 2013. Since the Company's initial public offering in December 2007, it has declared dividends in 24 consecutive quarters, which now totals $7.275 per share on a cumulative basis.
Summary of Recent Events
First Priority VLCC Mortgage Loans
In the third quarter of 2013, the Company recorded a $10.4 million loss provision on its investment in term loans secured by two 2010-built Very Large Crude Carrier (VLCC) vessels. This provision reflects the estimated loss that could be incurred based on the Company's current estimates of the amounts recoverable based on the two VLCC vessels' future operating cash flows and the net proceeds from their eventual sale. The actual amount recoverable from the Company's investment in the term loans may vary from the Company's current estimates depending on various factors, including the vessels' actual future operating cash flows and actual net proceeds realized from the sale 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 the authorities in Egypt. The insurers of this vessel are currently in negotiations with the authorities in Egypt to expedite its release. Once the vessel is released, it is expected that it will commence trading in the spot tanker market under Teekay Tankers' management.
Long Range 2 (LR2) Product Tanker Newbuilding Orders
In October 2013, Teekay Tankers exercised options with STX Offshore & Shipbuilding Co., Ltd. (STX) of South Korea to order four fuel-efficient 113,000 dead-weight tonne LR2 product tankers, in addition to the four tankers it ordered from STX in April 2013. The payment of the first shipyard installments on these recent four additional vessels by Teekay Tankers to STX is contingent on the Company receiving acceptable refund guarantees from the shipyard for vessel installment payments. To date, Teekay Tankers has not made any installment payments to the yard for any of the eight LR2 product tanker newbuildings ordered in April and October 2013. Prior to receiving the refund guarantees, Teekay Tankers has the right to cancel the newbuilding orders at its discretion. STX has been unable to secure the refund guarantees; therefore, Teekay Tankers is evaluating its alternatives, including legal action for damages.
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.
Tanker Market
Crude tanker spot rates in the third quarter of 2013 improved slightly from the second quarter of 2013, and remain at comparatively low levels on a historical basis. Suezmax rates decreased as supply disruptions in Libya and Iraq reduced available cargos, and continued increases in U.S. crude production reduced crude movements from West Africa to the U.S. In the Aframax sector, rates increased in the first half of the third quarter as a result of stronger summer oil demand and increased demand for lightering in the U.S. Gulf. Aframax rates decreased later in the third quarter as European refineries began scheduled fall maintenance, and higher oil prices weakened European refining margins and prompted less refinery throughput. LR2 product tanker rates were supported in the latter part of the third quarter of 2013 by an increase in East-to-West gasoil movements due to attractive arbitrage opportunities.
The world tanker fleet increased by 10.5 million deadweight tonnes (mdwt), or approximately 2.1 percent, through the first nine months of 2013, compared to growth of 14.6 million mdwt, or approximately 3.1 percent, for the same period of 2012. There are currently 50.7 mdwt of tankers on order, or approximately 10 percent of the existing fleet. The tanker orderbook has been reducing since peaking at 190 mdwt, or approximately 49 percent of the fleet, in September 2008. As a result of the smaller orderbook, the global fleet is expected to grow by only 2.5 percent in 2013 and 1.0 percent in 2014, net of removals, which is the smallest fleet growth rate since 2002.
The pace of new tanker ordering has increased in 2013, with a total of 16.7 mdwt ordered through the first nine months of 2013, compared to 8.5 mdwt ordered in the same period of 2012. However, the pace of ordering remains low compared to the historical annual average 35.9 mdwt from 2000 to 2012. A majority of the orders this year have been for Medium-Range (MR) and LR2 product tankers.
The International Monetary Fund (IMF) lowered its GDP growth forecast in 2013 and 2014 to 2.9 percent and 3.6 percent, respectively, which is a decrease of 0.2 percent from its previous forecasts. Oil demand growth in 2013 is forecasted to increase moderately by 0.9 million barrels per day (mb/d) based on the average of the forecasts of the International Energy Agency (IEA), the Energy Information Administration (EIA), and OPEC. The outlook is slightly more positive for 2014, with oil demand growth forecasted to grow by 1.1 mb/d. However, the call on OPEC is expected to decline by 0.6 mb/d in 2014, as non-OPEC oil 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 November 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 (the High Q Joint Venture), which the Company entered into in October 2010. The newbuilding VLCC 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 September 30, 2013, the Company had total liquidity of $226.1 million (which consisted of $29.2 million of cash and $196.9 million in an undrawn revolving credit facility), compared to total liquidity of $255.5 million as at June 30, 2013.
Conference Call
The Company plans to host a conference call on Thursday, November 7, 2013 at 1:00 p.m. (ET) to discuss its results for the third 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, November 14, 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 7931910.
About Teekay Tankers
Teekay Tankers currently owns a fleet of 27 double-hull vessels, including 11 Aframax tankers, 10 Suezmax tankers, three Long Range 2 (LR2) product tankers, 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."
Set forth below is a reconciliation of the Company's unaudited adjusted net loss attributable to the shareholders of Teekay Tankers, a non-GAAP financial measure, to net loss 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 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.
Description of Non-GAAP Financial Measure - Cash Available for Distribution
Cash Available for Distribution represents net loss, 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 any 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.
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.
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 Company's financial stability and ability to benefit from a tanker market recovery; the Company's ability to take advantage of growth opportunities in a future tanker market recovery; the Company's fixed coverage for the 12 months commencing October 1, 2013; the timing and certainty of the Company receiving refund guarantees from STX for the eight LR2 newbuildings orders placed in April and October 2013 and the potential for Teekay Tankers to amend the contract terms or cancel these vessel orders prior to receiving refund guarantees and pursue alternatives, including legal action; the amount recoverable from the Company's investments in loans secured by two 2010-built VLCCs and the timing and certainty for the potential sale of these vessels; the timing and certainty of the insurer of one of the VLCCs successfully negotiating with the Egyptian authorities for the release of this vessel; and the Company's ability to retain 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 eight newbuilding LR2 product tankers ordered by the Company in April 2013 and October 2013; the nature and extent of any amendments to the contract with STX required to secure the refund guarantees; failure by the insurers of one of the VLCC vessels securing the Company's mortgage loan investment to negotiate the timely release of this vessel from Egypt changes in the market value of the VLCCs securing the Company's investment in term loans; the ability of Teekay Tankers to obtain access to the VLCC tankers and to operate or sell the VLCC tankers, and the cash flow and sale proceeds thereof; 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 Enquiries
Kent Alekson
+1 (604) 844-6654
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Datum: 07.11.2013 - 13:30 Uhr
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