Teekay Tankers Ltd. on Thursday reported $169.368 million in net income for the first quarter, up from $146.427 million in the previous three months on record tanker spot rates.
The oil carrier’s January-March result is its highest-ever quarterly profit when adjusted for non-recurring costs. Its adjusted net income was $174.918 million.
“Midsize crude oil tanker spot rates in the first quarter of 2023 were the highest ever recorded for the first quarter of a year,” Teekay said in a press release. Its spot fleet of Aframax/LR2 and Suezmax vessels earned $67,346 and $55,891 per day in charter hourly equivalent rates, respectively.
President and CEO Kevin Mackay said in the announcement: “Demand for midsize tankers remained strong in the first quarter, driven by record export volumes from the US Gulf, continued strong volumes out of Russia, almost all traveling for a long time -shipment to Asia, and Europe’s continued replacement of Russian imports by volumes from further afield”.
Teekay collected $394.657 million in revenue, up from $367.318 million in October-December 2022. Revenue in the opening quarter of 2023 was more than double that of the first quarter of last year, when reported a net loss of $13.942 million.
With earnings of $4.97 per share, it declared a fixed quarterly cash dividend of $0.25 per common share plus $1 per common share in a special cash dividend.
“In addition, we established a $100 million Class A common share repurchase program, providing another lever that can be used to optimize shareholder returns,” Mackay said.
Teekay expects “strong fleet supply fundamentals” in the shipping industry to make it through potential headwinds from oil production cuts in major exporting countries and a slowdown in the global economy.
“Fleet supply fundamentals remained positive. In April 2023, the global tanker order book, when measured as a percentage of the existing fleet, remains at an all-time low of approximately 4 per While the pace of new tanker orders has accelerated since the start of the year, most shipyards are largely full until the end of 2025, with many shipyards booking orders for the first half of 2026,” he said.
Teekay added that the market continues to feature high prices for tankers, which he expects to continue through the remainder of 2023.
“While there are some potential short-term headwinds due to OPEC+ cuts and the potential for a slowdown in the global economy, the company remains bullish on the long-term outlook for the oil market tankers, primarily due to the very strong fundamentals of fleet supply, and he believes that we are still in the early stages of what could be a multi-year upward cycle for tanker rates,” he said, referring to to the group of the Organization of Petroleum Exporting Countries Plus.
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