Teekay Tankers .(US:TNK)2021-11-04 19:24Financial Data and Key Metrics Changes - Teekay Tankers reported a negative adjusted EBITDA of $16 million in Q3 2021, down from negative $7 million in the previous quarter [6] - The adjusted net loss was $50 million or $1.48 per share, compared to a loss of $42 million or $1.23 per share in the prior quarter [6] - Pro forma liquidity stood at $209 million with a net debt to capitalization ratio of 39% at the end of Q3 2021 [7][23] Business Line Data and Key Metrics Changes - Spot tanker rates reached historic lows during Q3 2021, primarily due to OPEC+ supply cuts and unplanned outages in non-OPEC countries [10] - The company sold a 2003-built Aframax for approximately $12 million, taking advantage of relatively firm secondhand tanker prices [10] Market Data and Key Metrics Changes - Spot tanker rates improved modestly at the start of Q4 2021 due to higher trade volumes and easing non-OPEC outages [12] - The IEA projects an increase in global oil production of 2.7 million barrels per day by the end of the year, which is expected to boost tanker demand [13] Company Strategy and Development Direction - The company aims to maximize returns from its current fleet of 50 ships while preparing for a market recovery [30] - There is a focus on reducing emissions and developing new technologies as the older fleet is sold off [31] - The company plans to optimize vessel utilization by bringing forward drydocking schedules in anticipation of market recovery [16] Management's Comments on Operating Environment and Future Outlook - Management noted that while the timing of a significant market recovery remains uncertain due to COVID-19, key indicators are trending positively [9][20] - The company believes that the fundamentals are improving, with low tanker ordering and increased scrapping expected to limit future fleet growth [19][20] Other Important Information - The company completed refinancing of 8 vessels with lower-cost sale leaseback financings, reducing overall cost of capital [7][23] - The company has a manageable debt repayment profile with no significant maturities until 2024 [23] Q&A Session Summary Question: Future focus and operational leverage - Management emphasized the importance of weathering current market challenges while maximizing revenue generation as the market improves [30] Question: Potential risks to recovery - Management indicated that fleet supply is not expected to be a challenge, but overall demand could impact recovery [33] Question: Update on LR2 Aframax conversions - Management confirmed that four ships were converted to clean cargo trade with positive results, but future decisions will depend on market conditions [38] Question: OPEC guidance and run rate - Management explained that lower expenses related to crew changes and bulk purchasing contributed to a better-than-expected OPEC run rate [44] Question: Inventory drawdown levels - Management noted that current inventory levels are significantly below the five-year average, which could lead to oil price increases and a potential market shift [49][50] Question: Adding chartered vessels - Management expressed a willingness to add chartered vessels as market conditions improve, while currently maintaining a comfortable fleet size [52][54] Question: Seasonal strength in Q4 - Management acknowledged that while Q4 is typically stronger, the timing of market recovery can vary, but signs of tightening are evident [57]