May 12, 2022
On May 12, Teekay Corporation and Teekay Tankers released Q1-2022 earnings results.
Teekay Corporation reported a lower adjusted net income for the first quarter of 2022 as compared to previous quarters. This decrease is primarily due to the sale of the Teekay Gas business in January 2022 which was partially offset by higher spot tanker rates, lower vessel operating expenses, and extinguishment of substantially all of Teekay Parent’s debt, as we continue to wind down our FPSO business.
Teekay Tankers secured a strong second quarter-to-date spot tanker rates which were encouraged by the recent positive trend in spot tanker rates. Russia’s invasion of Ukraine has led to a significant shift in crude oil trading patterns as many countries in the West look to reduce their purchases of Russian oil. Due to the nature of the load regions involved and the need for greater flexibility in discharge options, mid-sized tankers have benefitted more significantly from these changing trade patterns compared to VLCCs, where rates have remained relatively weak. Spot tanker rates continue to rise and look to remain volatile in the coming weeks and months as the situation continues to unfold.
In March and April, Teekay Tankers completed the previously announced low-cost, sale-leaseback refinancings of 13 vessels, and during the year, have also completed the sale of three older vessels, taking advantage of rising asset prices.
Although the near-term outlook is uncertain, the longer-term outlook appears positive due to an anticipated period of very low fleet growth, which should help support stronger tanker rates. With a very low orderbook in the coming years and minimal shipyard capacity available to change that fact before 2025, the outlook is positive for the market and Teekay Tankers’ prospects in it.
We believe our strong balance sheet has created the financial flexibility and optionality that we now have which is particularly valuable during times of extreme volatility and global economic uncertainty. It positions us well to pursue future investments patiently and selectively where we can leverage our operating franchise and proven capabilities of the Teekay platform.
For detailed information, visit our Investor pages: $TK, $TNK.