Tanker Investments, the Oslo listed Teekay group spin-off that invests in second hand vessels, has reported strong interims and remains optimistic about the outlook.
Group net profit amounted to USD16.7 million in 2Q15 compared to a loss of USD5.7 million in the same period last year. Revenues rose to USD40.6 million from USD5.9 million.
In 1H15, the company booked a net profit of USD35.7 million compared to a loss of USD5.9 million a year earlier. Revenues increased to USD78.8 million from USD7.9 million.
In both 2015 periods, the result and revenues were lifted by larger fleet and higher freight rates. The company now owns 20 ships, ranging in size from Aframaxes to VLCCs. However, four additional Aframaxes that the company recently acquired are due to join the fleet soon.
“With strong oil demand, partially lead by low oil prices, record-high global oil production and moderate fleet growth, we expect Tanker Investments’ fleet to generate substantial cash flow during the second half of 2015 [2H15] and into 2016,” said William Hung, chief executive officer.
“We have recently seen asset values increase as a result of the strong spot tanker rates experienced so far this year and with a strong outlook for the tanker market through the winter and into 2016, we expect asset values will remain firm. In addition, with projected strong tanker rates, we anticipate that our leverage and liquidity will reach comfortable levels later this year and at that time we intend to distribute excess capital to shareholders,” he continued.
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Second hand values remained firm in the last quarter and have strengthened early in the third. “Modern vessel values increased as charter rates have been counter-seasonally strong and the expectation is that positive tanker market fundamentals will continue to increase,” the company said.
Tanker Investments forecast that the global tanker fleet will grow by a total of 2-2.5% this year, with growth weighted towards the product tanker sectors. “The uncoated Aframax sector is expected to experience another year of negative fleet growth, while the Suezmax fleet is projected to grow by only 1% in 2015,” the company stated.
“The outlook for crude spot tanker rates is expected to remain positive in 2015 and into 2016 based on a combination of low fleet growth and an increase in long-haul tanker demand as more crude oil moves from the Atlantic to the Pacific basin. Low oil prices are expected to continue to provide support for tanker demand into the second half of 2015 [2H15] and into 2016,” Tanker Investments said.
Teekay group set up the company last year, when it was also listed on the Oslo Stock Exchange. At the moment, Teekay Tankers holds 8.9% of the shares in it, while Teekay Holdings has a stake of 6.5%. The biggest individual shareholder is J.P. Morgan Chase, whose UK-based nominee account has 17% of the shares in Tanker Investments, information on the company’s website shows.