HAMILTON, BERMUDA -- (Marketwire) -- 08/07/08 -- Teekay Tankers Ltd. (NYSE: TNK) -
Highlights
- Declared a cash dividend of $0.90 per share for the quarter ended June 30, 2008, up from $0.70 per share in the previous quarter
- Reported second quarter net income of $22.0 million, or $0.88 per share (including an unrealized gain relating to an interest rate swap, which increased net income by $5.0 million, or $0.20 per share)
- Net voyage revenues increased to $35.1 million, up 32 percent from the previous quarter
- In April 2008, acquired two Suezmax tankers from Teekay Corporation
- Earned average TCE of $43,828 per day on the spot Aframax fleet, and $68,734 per day on the spot Suezmax fleet during the quarter ended June 30, 2008
Teekay Tankers Ltd. (Teekay Tankers or the Company) today reported net income of $22.0 million, or $0.88 per share, for the three months ended June 30, 2008, compared to net income of $14.0 million, or $0.56 per share, for the three months ended March 31, 2008. The results for the quarter ended June 30, 2008 included an unrealized gain relating to the change in fair value of an interest rate swap that had the net effect of increasing net income by $5.0 million, or $0.20 per share. Net voyage revenues(1) for the three months ended June 30, 2008 were $35.1 million, compared to $26.6 million for the three months ended March 31, 2008.
The net income for the six months ended June 30, 2008 was $36.0 million, or $1.44 per share, compared to net income of $27.9 million, or $1.86 per share, for the same period last year. The results for the six months ended June 30, 2008 included an unrealized gain relating to the change in fair value of an interest rate swap that had the net effect of increasing net income by $5.0 million, or $0.20 per share. Net voyage revenues(1) for the six months ended June 30, 2008 increased to $61.7 million from $55.7 million for the same period in 2007.
On August 5, 2008, Teekay Tankers declared a cash dividend of $0.90 per share for the period from April 1, 2008 to June 30, 2008, representing a total cash dividend of $22.5 million(2). The dividend will be paid on August 22, 2008 to all shareholders of record on August 15, 2008.
(1) Net voyage revenues represents voyage revenues less voyage expenses. Net voyage revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company's website at www.teekaytankers.com for a reconciliation of this non-GAAP financial measure.
(2) Refer to Appendix A to this release for the calculation of the cash dividend amount.
Estimated Cash Available for Distribution
The following table summarizes the annualized estimated cash available for distribution per share based on Teekay Tankers' current fleet and charter mix:
To view the table accompanying this press release please click on the following link: http://media3.marketwire.com/docs/tnk0806.pdf
Operating Results
The following table highlights the operating performance of the Company's time-charter and spot vessels measured in net revenues per revenue day, or time-charter equivalent (TCE):
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Three Months Ended
June 30, 2008 March 31, 2008
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Time-Charter Fleet
Aframax Revenue days (1) 394 415
Aframax TCE per revenue day (2) $ 31,226 $ 32,025
Suezmax Revenue days (1) 85 -
Suezmax TCE per revenue day (2)(3) $ 42,839 -
Spot Fleet
Aframax Revenue days (1) 329 382
Aframax TCE per revenue day (2) $ 43,828 $ 36,253
Suezmax Revenue days (1) 85 -
Suezmax TCE per revenue day (2) $ 68,734 -
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Total Fleet
Aframax Revenue days (1) 723 797
Aframax TCE per revenue day (2) $ 36,962 $ 34,050
Suezmax Revenue days (1) 170 -
Suezmax TCE per revenue day (2) $ 55,786 -
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(1) Revenue days exclude offhire days. The number of Aframax revenue days
decreased in the second quarter due mainly to the extended drydocking
of the Nassau Spirit which resulted in 83 off-hire days.
(2) TCE per day excludes Pool management fees and commissions.
(3) The Ganges Spirit is employed on a time-charter contract at a base
rate of $30,500 per day with a profit sharing agreement whereby Teekay
Tankers is entitled to the first $3,000 per day of the vessel's
earnings above the base rate, and fifty percent of the earnings above
$33,500 per day. The profit share amount is determined on an annual
basis for the period from June 1 to May 31. During the second quarter,
Teekay Tankers recognized approximately $1 million in profit sharing
revenue relating to the period from April 7, 2008 (date of acquisition)
to May 31, 2008. In accordance with US GAAP, no accrual was made for
the profit share amount relating to the month of June 2008, since the
profit share amount is determined on an annual basis.
Tanker Market
Crude tanker spot rates increased significantly during the second quarter of 2008, rising to levels not experienced since record high rates during the fourth quarter of 2004. This counter-seasonal strength in tanker rates was primarily driven by continued growth in oil demand from energy-intensive economies in Asia and higher oil production from OPEC suppliers during the quarter, which resulted in increased tanker tonne-mile demand. Spot rates early in the third quarter of 2008 have been volatile but have averaged higher than in the second quarter of 2008, as Saudi Arabia continues to increase output and Asian refineries have come back on-line following maintenance.
In the first half of 2008, Chinese crude imports averaged 3.6 million barrels per day, which was 11 percent higher than for the same period in the prior year. Thirty-five percent of Chinese import volumes were sourced from long-haul suppliers in the Atlantic basin, further increasing tanker tonne-mile demand.
The trend of tanker sales for conversion to offshore units and dry bulk vessels increased during the quarter and continues to dampen tanker supply growth. Record-high scrap steel prices have also led to an increase in oil tankers being sold for demolition. Overall, the world tanker fleet grew by only 1.6 percent during the first half of 2008, the slowest rate since 2002. In addition, increased discrimination against single-hull tankers, a series of port strikes at Fos-Lavera in the Mediterranean, and Iran using VLCCs and Suezmax tankers for floating storage, contributed to higher tanker freight rates during the quarter by reducing the effective supply of vessels.
Teekay Tankers' Fleet
The following table summarizes the Company's fleet as of July 31, 2008:
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Aframax Suezmax Number of
Fleet Fleet Owned Vessels
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Time-Charter Vessels 4 1 5
Spot Vessels 5 1 6
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Total 9 2 11
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On April 7, 2008, the Company acquired two double-hull Suezmax tankers, the 2002-built Ganges Spirit and the 2003-built Narmada Spirit, from Teekay Corporation for a total cost of $186.9 million.
