Teekay Tankers expects significant free cash flow to reinvest in the company’s fleet, says Kevin Mackay, Teekay Tankers’ president and chief executive officer.
“With high operating leverage to the spot tanker market and a debt-free balance sheet, Teekay Tankers expects to continue generating significant free cash flow, supporting our ability to prudently reinvest in our fleet, return capital to shareholders and maintain financial strength,” he said in the second quarter results.
The chief Mackay says the company targets significant capital investment in fleet renewal.
“We are pleased to be adding new, modern tonnage to our fleet by redeploying capital from selling some older vessels, while we remain confident that our patience in pursuing growth opportunities positions us well to drive value creation in both the near and long-term,” Mackay adds.
Looking ahead, the chief executive is optimistic about the operating environment for mid-size tankers in the coming years.
The company now expects mid-size crude tanker spot rates to remain well supported through the remainder of 2024 with geopolitical factors and resultant trade disruptions adding to rate volatility.
As the chief of the company says the mid-size tanker market is expected to remain well supported through the remainder of 2024.
“Mid-size crude tanker rates remained strong and stable for the second quarter,” commented Teekay Tankers’ president and chief executive officer.
“The underlying fundamentals, and resulting strong utilization levels within the mid-sized tanker segment specifically, continue to support historically high spot charter rates for our suezmax and aframax-sized fleets.”
“With the Trans Mountain Pipeline expansion continuing to ramp up towards one aframax cargo per day, vessel attacks in the Red Sea continuing to divert ships, and a newbuilding delivery schedule that is very low in historical terms, the mid-size tanker market is expected to remain well supported through the remainder of 2024,” Mackay added.
Recently the company agreed to purchase one 2021-built aframax vessel for $70.5m. The vessel purchase was completed in July 2024 with cash, and it is currently unencumbered.
