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Teekay Tankers profit up, increased spot exposure ahead of tanker Bonanza

Teekay Tankers profit up, increased spot exposure ahead of tanker Bonanza
Teekay Tankers has reported a boost in fourth quarter profits and has taken steps to capitalise on an expected bumper year for tankers in 2015.

The company booked a $20.2m profit in the fourth quarter, up from $14.1m in Q4 2013. For the year, a profit of $57.1m reversed an $8.1m loss in 2013.

Spot rates in the fourth quarter were at their highest since 2008 as the low oil price continued to drive demand for crude oil transportation. Suezmax rates were improved by increasingly tight supply of VLCCs, and LR2s benefited from high Asian naphtha imports and an increase in naphtha processing due to its favourable price compared to LPG.

Kevin Mackay, ceo of Teekay Tankers commented, "In December 2014, we agreed to acquire five high quality, modern secondhand tankers at an attractive aggregate price of approximately $230m, providing us with optionality to trade the four LR2 product tankers in the crude or refined products markets. In addition, since October 2014 we have secured three additional in-charters at attractive rates which will add approximately 900 days to our overall spot tanker exposure in 2015."

Teekay Tankers was positive on its prospects for 2015. "The outlook for crude tanker fleet utilisation and spot tanker rates is expected to remain positive in 2015 based on a shrinking mid-size crude tanker fleet and a continued increase in long haul tanker demand as more crude oil moves from the Atlantic to Pacific basins. The impact of low prices and the development of floating storage in the first quarter of 2015 are also expected to support positive tanker demand in the first half of 2015," it stated in its earnings release.

The crude markets continued to strengthen thorough the start of the first quarter 2015. "Based on approximately 60% of spot revenues days booked to-date in the first quarter of 2015, the company has earned average time-charter equivalent, or TCE, rates of approximately $39,000 and $30,000 per day for its spot-traded Suezmax and Aframax vessels, respectively, compared to $26,600 and $25,700 per day for the fourth quarter of 2014," said Mackay. "Crude spot tanker rates have remained firm due to the ongoing impact of low oil prices while LR2 product tanker rates have been supported by high levels of naphtha movements into Asia."

The company has a fleet of 12 aframax, 10 suezmax, seven LR2 tankers and three MR product tankers, of which three LR2s and one aframax are to be acquired in the first quarter. As well as its owned fleet, the company has 11 tankers chartered in.