Teekay Tankers tops Q2 estimates
Teekay Tankers Ltd has been a prime beneficiary of the current market environment, generating substantial free cashflow, said president and CEO Kevin Mackay.
Mr Mackay said that the positive results were because of their fleet of mid-sized owned and chartered-in vessels, mainly deployed in the spot market.
He was commenting as the company reported GAAP net income of $151.2 million, or $4.43 per share; and adjusted net income of $149.4 million, or $4.38 per share, in the second quarter of 2023.
Total revenues approached $371 million, up from more than $242 million in the same period in 2022.
Both, per share earnings ($4.38) and revenue, tops analysts estimates for the second quarter. Over the past four quarters, the company has surpassed consensus earnings per share estimates three times.
Mr Mackay commented: “The charter market for mid-sized tankers was once again very strong in the second quarter of 2023, benefiting from supply and demand fundamentals that we believe are durable in nature.”
He said: “The second quarter’s strong mid-sized tanker demand was supported by the continuation of high export volumes from both the US Gulf and Russia, much of which went to satisfy record-high import demand from China and India, resulting in significant tanker tonne-mile demand.
“With the market having now worked through much of the initial disruption to trading activity that accompanied the imposition of EU sanctions on Russian imports, crude trading patterns have settled into a new normal marked by significantly elevated voyage distances.
“While the moderating of spot rates in the third quarter reflects typical seasonality for this time of year, rates are currently tracking well above any third quarter of the last 15 years.
“Looking ahead, with oil demand projected to increase in the second half of the year, we are expecting a strong winter market.
“Meanwhile, the limited amount of new vessel ordering that has taken place in recent months and the lack of shipyard capacity until 2026 has all but ensured that mid-sized fleet growth will be strictly limited through the medium term.
“When combined with the significant portion of the global fleet that will be of potential recycling age over the same period, these clear fundamentals support our view that the mid-sized tanker market should see continued strength over the medium term.”
“Against this backdrop, and with a balance sheet transformed by our substantial free cashflow generation and financial discipline, Teekay Tankers’ balanced capital allocation policy enables us to provide our shareholders a well-supported quarterly dividend of $0.25 per share while also positioning us to reinvest in our fleet at the right time.”