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Teekay turns from loss to $215.2m profit

Teekay turns from loss to $215.2m profit
Teekay Corporation has reported a $215.2m profit for the second quarter 2015, reversing a $15.4m loss in the same period last year as all of its subsidiaries returned a profit.

Revenues rose from $452.2m in Q2 2014 to $592.7m in the same quarter this year, and a $75.3m unrealised loss on derivatives in 2014 was mostly reversed by a $63.7m gain in the most recent quarter.

Teekay Tankers contributed a $44.2m profit, with the group's two Master Limited Partnerships (MLP) and the parent company each reporting positive results.

At the group's offshore MLP Teekay Offshore Partners, net income was up to $107.8m from a $3.8m loss in the same period last year.

The increase is attributable to the commencement of a number of contracts over the past year, increases in FPSO charter rates and a reduction in operating costs.

One of the most significant events for the offshore outfit was the dropdown of the Knarr FPSO. On 1 July Teekay Offshore Partners acquired the FPSO for $1.2bn, assuming an existing $745m debt facility, issuing $300m of common equity units to its parent and a private placement of $250m of convertible preferred units.

For Teekay LNG Partners, the group's LNG carrier and tanker MLP, net income increased to $63.7m from $47.9m in the same quarter last year.

Topping up the partnership's usual long-term contractual income, revenues were higher than expected from Teekay LNG's Angola and Exmar LPG joint ventures.

After securing contracts for up to two 13-year charters for LNG carriers with BP in June, Teekay LNG has an average remaining contract length of 13 years and a total contract value of $11.4bn, with no exposure to the price of the commodity itself.

"Since reporting first quarter earnings in May, we have achieved key milestones towards the completion of Teekay parent's transition into a pure-play general partner of two MLPs, most notably the consummation of the Knarr FPSO dropdown, our largest dropdown sale ever," commented Teekay Corporation president and ceo Peter Evensen. "The Knarr FPSO dropdown has resulted in a reduction of Teekay Parent's net debt by nearly $1bn, which further strengthens Teekay Parent's balance sheet."