Teekay Corporation Ltd shares plunged as much as 16 per cent yesterday after the Bermudian-based energy group reported a larger than expected loss.

Teekay posted a first-quarter loss of $20.6 million, or 21 cents per share, after reporting a profit in the same period a year earlier.

The company, said its oil tanker subsidiary Teekay Tankers had eliminated its quarterly dividend to preserve cash in a weak tanker market.

Kenneth Hvid, Teekay’s chief executive officer, said: “While tanker rates are expected to remain weak in the near-term, we are anticipating a gradual improvement in fleet utilisation and tanker rates from late-2018.

“With significant operating leverage, we believe Teekay Tankers has considerable upside from a cashflow and valuation perspective as the tanker market strengthens.”

The company was more upbeat about its liquefied natural gas shipping subsidiary, Teekay LNG Partners.

“In Teekay LNG, over the past seven months, we have taken delivery of seven LNG carriers, all on long-term charters,” Mr Hvid said.

“We believe Teekay LNG is in the early innings of a multi-year cashflow ramp-up with an additional 11 LNG carriers and a regasification facility scheduled to start-up through early-2020, which we expect will also allow us to naturally delever our balance sheet.”

Teekay predicts strong growth in demand in the LNG sector in years to come.

Teekay Corporation’s shares closed down 89 cents, or 9.9 per cent, at $8.11 on the Nasdaq Stock Exchange yesterday.