Teekay Tankers (TNK) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Fri, May 15, 2026 at 12:15 AM GMT+7 23 min read Image source: The Motley Fool. President & Chief Executive Officer — Kenneth Hvid Need a quote from a Motley Fool analyst? Email pr@fool.com Starting on slide 3 of the presentation we will cover Teekay Tankers recent highlights. Teekay Tankers reported GAAP net income of $154 million or $4.42 per share and adjusted net income of $128 million or $3.69 per share in the first quarter, which are over $30 million better than last quarter and 2 to 3x the results posted in the same period of the prior year. Spot tanker rates during the first quarter were near record highs for first quarter, averaging approximately $61 thousand per day across our midsized tanker fleet. With our significant spot exposure and a low free cash flow breakeven, we generated approximately $143 million in free cash flow from operations, which has increased our cash position to just shy of $1 billion with no debt as of quarter end. We continue to execute on our fleet renewal strategy, which includes acquiring modern vessels while selling our older vessels. I am pleased to announce that we have entered into agreements to acquire 2 Korean resale Suezmax newbuildings for a total of $190 million which are expected to be delivered in 2027. We also sold 1 2009 build Suezmax of $53.5 million, resulting in an expected gain on sale of $32.5 million that will be recorded in Q2 2026. In addition, we have completed the previously announced sales of 2 Suezmax tankers for total proceeds of $73 million and recorded gains of sales of $22.7 million in the first quarter So far this year, we have acquired or agreed to acquire 5 modern vessels for a total commitment of $332 million and have sold or agreed to sell 4 vessels for $211 million. We also took advantage of the strong spot market we opportunistically outchartered 1 Suezmax for $80 thousand per day per day for 10 to 12 months. And this past week, we outchartered 1 Aframax vessel for $60 thousand per day for 12 months. Looking ahead to the second quarter, we expect even better results with tanker rates reaching record levels. So far in the second quarter, we have secured spot rates of $142 thousand $122 thousand and $98 thousand per day for VLCC, Suezmax, and Aframax LR2 fleets, respectively, with approximately 71% of spot days booked for OVLCC and on average, around 57% of spot days booked for Suezmax and Aframax LR2s. Lastly, Teekay Tankers has declared its regular fixed quarterly dividend of $0.25 per share. And in addition, we declared a special dividend of $1.00 per share, which, like prior years, is based on the previous year s financial results. Moving to slide 4, we look at recent developments in the spot market. Spot tanker rates in Q1 were close to record highs for first quarter. Just behind rates seen in the 2023. It is worth noting that spot rates were very firm even before the recent US Iran conflict. Due to a combination of rising seaborne oil trade volumes, tightening of sanctions against Russia, Iran, and Venezuela, and the impact of fleet consolidation in the VLCC sector. In particular, the removal of President Nicolas Maduro of Venezuela by The United States and the subsequent freeing up of Venezuelan crude oil exports to move on compliant tonnage to destinations such as the U.S. Gulf, Europe, and India benefited midsized crude tanker demand in Q1. Midsized spot tanker rates have continued to rise at the start of Q2, due to the impact of recent events in the Middle East reaching record highs of over $120 thousand per day during April, I will talk more about the reasons for these record high rates in the next few slides. Turning to slide 5. We are experiencing an unprecedented oil supply disruption with the effective closure of the Strait of Hormuz. On February 28, The United States and Israel launched a series of attacks against Iran targeting military and government sites. Iran subsequently responded by attacking a range of military and civilian assets across the Middle East region, including vessels transiting the Strait of Hormuz. Since then, The US has also implemented a blockade aimed at preventing ships from entering or leaving Iranian ports, The net result has been a significant drop in vessel traffic through the Strait Of Hormuz, which in turn has led to a sharp decline in Middle East oil production and exports, while Saudi Arabia and The UAE have been able to divert some of their export volumes to ports outside of the Middle East Gulf, namely Yanbu in the Red Sea and Fujairah in the Gulf of Oman, Total crude oil exports from the region have fallen approximately 10 million barrels per day compared to prewar levels. Partially offsetting the supply loss has been a corresponding increase in crude oil export from the Atlantic Basin and the West Coast Of The Americas where exports have increased by approximately 4.5 million barrels per day since the start of the war. This has been most evide

Teekay Tankers (TNK) Q1 2026 Earnings Transcript

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Teekay Tankers (TNK) Q1 2026 Earnings Transcript

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