Teekay Tankers Ltd. Reports Second Quarter 2015 Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 08/06/15 -- Highlights
Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE: TNK) today reported adjusted net income attributable to its shareholders (1) of $41.3 million, or $0.35 per share, for the quarter ended June 30, 2015, compared to an adjusted net loss of $4.1 million, or $0.05 per share, for the same period in the prior year. The increase is primarily due to stronger spot tanker rates in the second quarter of 2015 compared to the same period in the prior year, an increase in fleet size due to the acquisition of the four Long Range 2 (LR2) product tankers and one Aframax tanker in the first quarter of 2015 and the addition of the nine in-chartered vessels that delivered to the Company during 2014 and the first half of 2015. Adjusted net income attributable to shareholders excludes a number of specific items that had the net effect of increasing net income attributable to shareholders by $3.0 million, or $0.03 per share, and by $8.7 million, or $0.10 per share, for the three months ended June 30, 2015 and 2014, respectively, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net income attributable to its shareholders of $44.2 million, or $0.38 per share, and $4.6 million, or $0.05 per share, for the three months ended June 30, 2015 and 2014, respectively. Net revenues(3) were $104.0 million and $40.8 million for the three months ended June 30, 2015 and 2014, respectively.
During the second quarter of 2015, the Company generated $57.9 million, or $0.50 per share, of free cash flow(2), compared to $9.2 million, or $0.11 per share, in the second quarter of 2014, due to higher average spot rates earned and an increase in the size of the Company's fleet. On July 2, 2015, Teekay Tankers declared a dividend of $0.03 per share for the second quarter of 2015, which was paid on July 31, 2015 to all shareholders of record on July 17, 2015. Since the Company's inception, it has declared dividends in 31 consecutive quarters.
CEO Commentary
"Our second quarter results benefited from the prevailing counter-seasonally strong crude spot tanker rates during the quarter," commented Kevin Mackay, Teekay Tankers' Chief Executive Officer. "We believe the ongoing strength in the tanker market reflects the continuing positive tanker market fundamentals of low fleet growth, growing global oil demand and an increase in long-haul tanker movements as more crude oil moves from the Atlantic to Pacific basins."
"Record high crude oil supply from OPEC and continued crude oil stockpiling as a result of the lower oil price environment have provided further support to the crude tanker market during the second quarter and into the third quarter to-date."
Mr. Mackay added, "While Teekay Tankers earned strong free cash flow of $58 million, or $0.50 per share, during the quarter, our results would have been even stronger in the absence of some non-recurring issues related to three vessels which have largely been rectified, with the exception of one charter-in tanker which has not yet delivered due to vetting issues."
"Teekay Tankers continues to deliver significant shareholder value by executing on its strategy using a variety of levers," Mr. Mackay continued. "Over the past year, we have substantially increased the Company's exposure to the strong spot market at the right point in the tanker market cycle by building an attractive portfolio of 12 in-chartered tankers and securing accretive acquisitions of 17 high-quality on-the-water tankers, which solidifies Teekay Tankers' position as the world's largest owner and operator of mid-size crude oil tankers. This includes the 12 modern on-the-water Suezmax tankers that the Company agreed to acquire this past week, which will reduce our average fleet age and is expected to be immediately accretive to our earnings, free cash flow, and net asset value per share."
Summary of Recent Developments
Recent Accretive Acquisitions
Suezmax Fleet Acquisition
In early-August 2015, Teekay Tankers agreed to acquire 12 modern Suezmax tankers from Principal Maritime Tankers (Principal Maritime) for an aggregate purchase price of approximately $662 million. The 12 vessels have an average age of 5.5 years, which reduces the average age of Teekay Tankers' fleet by 1.2 years. The vessels are all scheduled to deliver by the end of October 2015 and are expected to trade in the spot tanker market upon or soon after delivery. This transaction is fully financed and is expected to be immediately accretive to earnings, free cash flow and net asset value per share.
Acquisition of Ship-to-Ship Transfer Business
In late-July 2015, Teekay Tankers acquired SPT Inc. (SPT) from Teekay Corporation (Teekay) and a Norway-based marine transportation company, I.M. Skaugen SE, for a purchase price of $45.5 million. SPT provides a full suite of ship-to-ship (STS) transfer services in the oil, gas and dry bulk industries. In addition to full service lightering and lightering support, it also provides consultancy, terminal management and project development services. This acquisition establishes Teekay Tankers as a global player in the STS transfer business, which will increase the Company's fee-based revenue and its overall fleet utilization. SPT owns and operates a fleet of six STS support vessels and has one chartered-in Aframax tanker.
The Suezmax fleet and SPT acquisitions have been fully financed through the issuance of $185.5 million of new common shares, including $75.5 million to Teekay, $50 million to Principal Maritime and $60 million to a group of institutional investors, a new debt facility of approximately $400 million and existing liquidity, which includes $37.3 million of net proceeds received during the second quarter of 2015 from the issuance of common shares under the Company's continuous offering program. The $185.5 million of newly issued common shares were priced at a weighted average price of $6.82 per share.
Time Charter-Out Vessels
In July 2015, Teekay Tankers entered into time charter-out contracts for one LR2 product tanker and two Suezmax tankers. The LR2 product tanker has a time charter-out contract with a daily rate of $26,000 and a firm contract period of 22 months. The Suezmax tankers have time charter-out contracts with daily rates of $32,900 and firm contract periods of 24 months.
Tanker Market
Crude tanker spot rates have remained strong from the first quarter of 2015 into the second quarter of 2015, achieving the highest second-quarter levels in seven years. The market strength is primarily due to ongoing low global oil prices, record high crude oil supply from OPEC and further crude oil stockpiling. In general, tanker rates continue to be positively impacted by the following factors:
At the beginning of the third quarter of 2015, crude tanker rates have remained counter-seasonally strong due to high refining margins driven by on-going low oil prices, record-high OPEC crude oil production, vessel delays as onshore storage tanks remain at or near capacity, and intermittent weather delays in certain regions, including the U.S. Gulf. While crude tanker rates could potentially soften slightly into the end of the third quarter of 2015, as refineries enter scheduled maintenance, they are expected to remain strong relative to historical third quarter average rates.
LR2 product tanker rates in the second quarter of 2015 were also strong, achieving the highest average levels for a second quarter in seven years. LR2 rates were supported by high refinery utilization, increased long-haul trade out of new Middle Eastern refineries, increased seasonal gasoline and diesel demand, and low oil prices which has reduced naphtha prices in relation to liquefied petroleum gas (LPG). The latter factor has led some petrochemical plants to use naphtha rather than LPG for feedstock. LR2 product tanker rates continue to be supported into the third quarter of 2015 by increased volumes from new refineries in the Middle East and India, as well as surging product exports out of China which are resulting in tighter vessel supply.
The global tanker fleet grew by 8.4 million deadweight tonnes (mdwt), or 1.7 percent, in the first half of 2015. The global Suezmax fleet grew by six vessels, or 1.3 percent, while the uncoated Aframax fleet grew by only one vessel, or 0.2 percent. During the same period, the LR2 fleet grew by 17 vessels, or 6.5 percent. Looking ahead, the global tanker fleet is forecast to grow by a total of 2.0 to 2.5 percent in 2015, with growth weighted towards the product tanker sectors. The uncoated Aframax sector is expected to experience another year of negative fleet growth, while the Suezmax fleet is projected to grow by only 1.0 percent in 2015.
In July 2015, the International Monetary Fund (IMF) reduced its outlook for 2015 global economic growth to 3.3 percent, down 0.2 percent from its April 2015 forecast. This represents only a slight decrease from global economic growth of 3.4 percent in 2014. Based on an average of forecasts from the International Energy Agency, the Energy Information Administration and OPEC, global oil demand is forecast to grow by 1.3 million barrels per day (mb/d) in 2015, or 0.5 mb/d higher than demand growth in 2014.
The outlook for crude spot tanker rates is expected to remain positive in 2015 and into 2016 based on a combination of low fleet growth and an increase in long-haul tanker demand as more crude oil moves from the Atlantic to the Pacific basin. Low oil prices are expected to continue to provide support for tanker demand into the second half of 2015 and into 2016.
Operating Results
The following table highlights the operating performance of the Company's time-charter vessels and spot vessels trading in pools 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 6, 2015 (including the recent Suezmax fleet and SPT acquisitions described above):
Liquidity and Continuous Offering Program Update
In June 2015, the Company implemented a continuous offering program (COP) under which the Company may issue new common shares at market prices up to a maximum aggregate amount of $80 million. During the second quarter of 2015, the Company sold an aggregate of 5,022,000 common shares under the COP, generating net proceeds of approximately $37.3 million.
As of June 30, 2015, the Company had total liquidity of $229.6 million (comprised of $83.1 million in cash and cash equivalents and $146.5 million in undrawn revolving credit facilities), compared to total liquidity of $200.7 million as at March 31, 2015.
Conference Call
The Company plans to host a conference call on Thursday, August 6, 2015 at 1:00 p.m. (ET) to discuss its results for the second quarter of 2015. 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 20, 2015. 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 6595008.
About Teekay Tankers
Teekay Tankers currently owns a fleet of 44 double-hull tankers, including 22 Suezmax tankers (including 12 acquired vessels expected to be delivered by October 2015), 12 Aframax tankers, seven LR2 product tankers and three Medium-Range (MR) product tankers, and has 11 time charter-in tankers. Teekay Tankers' vessels are employed 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. In addition, Teekay Tankers owns a ship-to-ship transfer business and a minority interest of 9.3 percent in Tanker Investments Ltd. (OSE: TIL), which currently owns a fleet of 20 modern tankers, including five vessels expected to be acquired in the third quarter of 2015. 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."
Components of equity income are detailed in the table below:
Set forth below is a reconciliation of the Company's unaudited adjusted net income (loss) attributable to the shareholders of Teekay Tankers, a non-GAAP financial measure, to net 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 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.
Free cash flow (FCF) represents net income, plus depreciation and amortization, unrealized losses from derivatives, non-cash items, FCF from the equity accounted investments and any write-offs or other non-recurring items, less unrealized gains from derivatives, equity income from the equity accounted investments and other non-cash items.
Net revenues represents revenues less voyage expenses where voyage expenses are comprised of all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and 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, estimated growth in the world tanker fleet, estimated growth in global oil demand and crude oil tanker demand, changes in long-haul crude tanker movements from the Atlantic to Pacific basins, tanker fleet utilization and spot tanker rates; the effect of lower global oil prices, including the potential impact on oil stockpiling, refinery throughput and bunker fuel prices; the pending acquisition of 12 Suezmax tankers, including completion of the vessel acquisitions, delivery dates for the vessels, aggregate purchase price, debt and equity financing for the acquisition, position in the mid-size tanker segment and the intended trading of the vessels; the accretive nature of the Suezmax tanker acquisitions; and the impact of the SPT acquisition on the Company's cash flows and fleet utilization;. 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 or refined products; changes in trading patterns significantly affecting overall vessel tonnage requirements; greater or less than anticipated levels of tanker newbuilding orders and deliveries and greater or less than anticipated rates of tanker scrapping; changes in global oil prices; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; satisfaction of closing conditions to the vessel acquisitions; delays in or failure to take delivery of the 12 Suezmax tankers the Company has agreed to acquire; the ability of the Company to complete the debt and equity financings for the vessels; the ability of the Company to successfully integrate the recent acquisitions, continue productive employment of the acquired vessels and to operate the acquired businesses profitably; increased costs; 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, 2014. 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:
For Investor Relations enquiries contact:
Ryan Hamilton
+1 (604) 844-6654
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Datum: 06.08.2015 - 06:00 Uhr
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News-ID 411878
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