Teekay Corporation reported results for the three and twelve months ended December 31, 2023. These results include the Company’s publicly-listed consolidated subsidiary, Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK), and all remaining subsidiaries and equity-accounted investments. Teekay, together with its subsidiaries other than Teekay Tankers, is referred to in this release as Teekay Parent. Please refer to the fourth quarter and annual 2023 earnings release of Teekay Tankers, which is available on Teekay’s website at www.teekay.com, for additional information on Teekay Tankers’ results.
CEO Commentary
“Teekay reported strong fourth quarter results, capping off a year where we recorded our highest annual adjusted net income in 15 years,” commented Kenneth Hvid, Teekay’s President and CEO. “Teekay Tankers also reported another strong quarter, contributing to its highest annual adjusted net income in company history.”
“In addition, 2023 has been a year of major milestones for the Teekay Group. This included celebrating our 50th year anniversary as a company, experiencing one of the strongest years for crude tanker spot rates and Teekay Tankers transforming its balance sheet, which included it becoming net debt-free during the year. With Teekay Tankers’ spot market exposure and leading position in mid-sized tankers, we believe we are well positioned to continue benefiting from strong tanker market fundamentals.”
“Lastly, Teekay continued to return capital to shareholders through the repurchase of another $4.0 million of its common shares during the fourth quarter of 2023. Since August 2022, Teekay has repurchased $65.8 million of its common shares, or approximately 12.4% of the outstanding common shares immediately prior to commencement of its stock repurchase programs in August 2022, at an average price of $5.21 per share.”
Summary of Results
The Company’s GAAP and adjusted net income attributable to shareholders of Teekay decreased for the fourth quarter of 2023 compared to the same quarter of the prior year, primarily due to reduced earnings from Teekay Tankers as a result of lower spot tanker rates. In addition, GAAP net income attributable to shareholders was positively impacted by a $10.4 million gain on the sale of a Teekay Tankers vessel in the fourth quarter of 2023.
The following table highlights the operating performance of Teekay Tankers’ vessels trading in revenue sharing arrangements (RSAs), on voyage charters and in full service lightering, in each case measured in net revenues(a) per revenue day(b), or time-charter equivalent (TCE) rates, before off-hire bunker expenses:
Summary of Recent Events
Teekay Parent
In August 2022, Teekay’s Board of Directors authorized the repurchase of up to $30 million of Teekay common shares. Following the completion of this share repurchase program in March 2023, Teekay’s Board of Directors authorized two additional share repurchase programs in March 2023 and June 2023 for the repurchase of up to an additional $30 million and $25 million, respectively, of common shares. Teekay has repurchased a total of approximately 12.6 million common shares under the programs to date, or approximately 12.4% of the outstanding common shares immediately prior to commencement of the programs in August 2022, for a total cost of $65.8 million, representing an average repurchase price of $5.21 per share.
Teekay Tankers
In December 2023, Teekay Tankers agreed to sell two 2004-built Aframax vessels for gross proceeds of $46.5 million. One vessel sale was completed in December 2023 and resulted in a gain on sale of $10.4 million. The other vessel sale was completed in February 2024 and is expected to result in a gain on sale of approximately $11.5 million during the first quarter of 2024.
In January 2024, Teekay Tankers gave notice of its exercise of purchase options on eight vessels under sale- leaseback arrangements for a total purchase price of $137 million. The vessels are expected to be repurchased with cash balances in March 2024 and will then be unencumbered. Teekay Tankers is expected to be debt free after these eight vessels are repurchased.
Source: Hellenic Shipping News
