Teekay(TK) - 2020 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3 2020, Teekay Corporation reported consolidated adjusted net income of $15 million, or $0.15 per share, compared to an adjusted net loss of $24 million, or $0.24 per share in the same period last year [7] - Total adjusted EBITDA for the quarter was $227 million, an increase of $34 million, or 18% from the same period last year [8] - Consolidated net debt was reduced by over $940 million, or 22%, creating significant equity value and reducing interest expenses [11] Business Line Data and Key Metrics Changes - Teekay LNG generated total adjusted EBITDA of $187 million and adjusted net income of $59 million, or $0.59 per unit, reflecting a complete quarter contribution from its growth program [24] - Teekay Tankers reported total adjusted EBITDA of $46 million, up from $28 million in the same period last year, and adjusted net income of $3 million, or $0.09 per share, a significant improvement from an adjusted net loss of $22 million, or $0.63 per share [29] Market Data and Key Metrics Changes - The spot LNG carrier market has strengthened significantly, reaching recent highs of over $120,000 per day for MEGI and XDF vessels, attributed to the reopening of the arbitrage window and seasonal upswing in demand [27] - Teekay LNG's average daily fixed charter rate in 2021 is expected to be approximately $80,000 per day [26] Company Strategy and Development Direction - Teekay Corporation is focusing on winding down its FPSO segment and has made progress in decommissioning projects, with operational exposure to loss-making contracts eliminated [15][16] - The company is adapting to changes in the global energy mix, with over 80% of its investment capital now in gas carriers, reflecting a strategic shift towards cleaner energy sources [41][42] Management's Comments on Operating Environment and Future Outlook - Management expects to report another positive adjusted net income next quarter, although tanker results may be weaker due to lower spot rates and higher scheduled dry dockings [10] - The company believes it is financially well-positioned to create long-term shareholder value, with extensive contracted revenues and no significant near-term debt maturities [46] Other Important Information - Teekay Corporation has joined the United Nations Global Compact to demonstrate its commitment to ESG principles and has published sustainability reports for the last 10 years [40] - The company incurred about $12 million of Asset Retirement Obligation (ARO) costs during the third quarter, with a remaining net ARO accrual of $34 million as of September 30 [19] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with closing remarks from management [48][50]