Teekay’s profits down, but revenues up in the past quarter

TEEKAY’s quarterly results for the three months to 31 March were down slightly on the prior quarter, but its tanker business saw an uptick in revenues due to higher tanker spot rates.

The company’s total adjusted EBITDA was US$41.8 million for the quarter, a 79% decrease on the same quarter last year, and a decrease of 77% on the three months to 31 December 2021.

However, the company’s revenue has increased. For the three months to 31 March, the company’s revenue was US$212.7 million, an increase of 8% on the previous quarter and a 15% increase on the quarter to 31 March 2021.

Teekay president and CEO Kenneth Hvid said after a weaker start to the year, the tanker market significantly strengthened in March following Russia’s invasion of Ukraine.

“The market for mid-size tankers, in which Teekay Tankers has a market-leading position, has strengthened materially in the second quarter to-date, as Europe is increasingly replacing short-haul Baltic and Black Sea barrels with crude from the U.S. Gulf, West Africa, and elsewhere, carried disproportionately on mid-size tankers,” Mr Hvid said.

“Similarly, Russian crude exports forced out of Europe are travelling significantly farther to India and other distant markets that are absorbing the displaced barrels. We expect that the tanker market will remain volatile in the near-term and in the longer-term, we are encouraged by the small tanker orderbook, continued low ordering activity for crude oil tankers, and minimal shipyard capacity through the middle of this decade.”

Mr Hvid said the results were lower primarily due to the sale and resulting deconsolidation of Teekay LNG in mid-January.

“We have continued to make good progress on winding down our FPSO business, which we expect to be largely completed by the end of 2022. As expected, the Hummingbird FPSO ceased production on the Chestnut oil field at the end of March 2022, and we recently entered into an agreement to sell the FPSO unit to a third party,” Mr Hvid said.

“Through this sale, Teekay will not only avoid incurring costs related to recycling the unit, but we also currently expect that the sales proceeds will be sufficient to largely cover the Hummingbird FPSO’s remaining decommissioning costs. Lastly, we continue to plan for the decommissioning and green recycling of the Foinaven FPSO, with the majority of the costs expected to be covered by a contractual lump-sum payment from the customer.”

In Australia, Teekay provides operations support; supply and maintenance support; engineering support; and Australian crewing and training services.

In September last year, the company signed a contract with the Australian Department of Defence to expand its activities under the Defence Marine Support Services Program. The contract includes two vessels previously managed by Teekay – MV Sycamore and ADV Ocean Protector – and three other vessels that were previously managed by Teekay under a fleet marine service contract – MV Stoker, MV Besant and MV Seahorse Mercator.