Teekay Tankers Ltd. · NYSE:TNK
Teekay Tankers — Q4 2023 Earnings Presentation
18 slides from Teekay Tankers's earnings presentation, Feb 22, 2024
Slide 1: Fourth Quarter and Annual 2023 Earnings Presentation
Teekay Tankers Fourth Quarter and Annual 2023 Earnings Presentation February 22, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements included in this report, other than statements of
Slide 3: Recent Highlights
Recent Highlights Financial Market Activity Adjusted net income(1) of $99.5 million, or $2.91 per Highest annual average mid-size tanker spot rates in share, compared to $76.6 million, or $2.24 per share in TNK’s history during 2023 Q3-23 Spot rates remain firm at the start of 2024 with 2023 Adjuste
Slide 4: 2023 Market Strength Continuing in 2024
2023 Market Strength TNK’s Annual Mid-Size Tanker Spot Rates TNK’s Monthly Mid-Size Tanker Spot Rates Continuing in 2024 Suezmax Aframax Fleetwide FCF Breakeven Average mid-size tanker spot rates 50 80 during 2023 were the highest since TNK’s inception: 45 70 • Strong oil demand growth of 1.9 mb/d a
Slide 5: Q1-24 To-Date Spot Rates
Q1-24 To-Date Spot Spot Rates Rates 90,000 80,000 Currently eight vessels chartered-in 70,000 at an average rate of $25,400 per day, mark-to-market value of 60,000 Rate ($/day) approximately $60 million(2) 50,000 40,000 67,300 30,000 55,900 50,100 50,900 20,000 44,500 37,000 10,000 0 Suezmax Aframax
Slide 6: Underlying Fundamentals Remain Very Strong
Underlying Robust Global Oil Demand Growth Low Tanker Fleet Growth Fundamentals 104 Deliveries Scrapping Net Growth (RHS) Remain Very Strong 102 50 10% 40 8% 100 30 6% Global oil demand is expected to Million DWT 98 grow by 1.4 mb/d in 2024 and 1.3 20 4% MB/D 96 mb/d in 2025 94 10 2% 92 0 0% Extreme
Slide 7: Events Impacting Tanker Trades, Creating Volatility in an Already Tight Market
Events Impacting Tanker Trades, Creating Volatility in an Already Tight Market Americas Oil Supply Growth >1 mb/d of crude oil supply growth from the USA, Brazil, Guyana, with volumes heading primarily to Europe and Asia Russian Crude Oil Exports Trans Mountain Pipeline Mid-size tanker demand should
Slide 8: TNK's 2023 Key Accomplishments
TNK’s 2023 Key Best Financial Year in TNK’s History Returning Capital to Shareholders Accomplishments •• Adjusted net income of $500.5 million Generated $575.2 million of FCF (2) (1) •• Fixed quarterly dividend of $0.25 / share $1.00 / share special dividend in Q1-23 • Established $100 million s
Slide 9: Creating Shareholder Value
Creating Shareholder Value FCF Per Share Spot Rate Sensitivity Next 12 Months (1,2,3) Continuing to create shareholder $26.00 45% value in strong tanker market as $24.00 98% of the 51-vessel fleet trading in 40% the strong spot market $22.00 $20.00 35% Annualized FCF Yield • Based on LTM average rea
Slide 10: Appendix
Appendix 10
Slide 11: Debt Repayment Profile
Debt Repayment Profile Debt Repayment Profile Gave notice to exercise repurchase options on remaining eight vessels 300 in sale-leaseback arrangements for $137 million 250 • The vessels are expected to be repurchased by end Q1-24 • TNK will be debt free after the 200 $ Millions repurchases 150 100 1
Slide 12: Fleet In-Charters
Fleet In-Charters 700 35,000 600 30,000 500 25,000 400 Ship Days 20,000 300 15,000 200 10,000 100 5,000 0 0 Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax
Slide 13: Fleet Out-Charters
Fleet Out-Charters(1) 100 60,000 90 50,000 80 70 40,000 60 Ship Days 50 30,000 40 20,000 30 20 10,000 10 0 0 Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Aframax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax Suezmax
Slide 14: Q1-24 Outlook
Q1-24 Outlook Q1-24 Outlook(1) Income Statement Q4-23 in thousands (expected changes from Q4-23) Item adjusted basis(1) Decrease of approximately 115 net revenue days, consisting of a decrease of 60 fixed days and a decrease of 55 spot days, primarily due to the redelivery of one tanker from out-cha
Slide 15: Adjusted Net Income
Adjusted Net (In thousands of U.S. dollars) Income(1) Q4-2023 Q3-2023 Statement Item Variance Comments (unaudited) (unaudited) Q4-23 vs Q3-23 Revenues 313,291 285,858 27,433 Voyage expenses (118,828) (113,274) (5,554) (2) Net revenues 194,463 172,584 21,879 Increase primarily due to higher overall s
Slide 16: Consolidated Adjusted Statement of Income
Consolidated Adjusted Statement of Income (In thousands of U.S. dollars) Statement Item As Reported Appendix A As Adjusted Q4-23 Items (1) Revenues 313,291 - 313,291 Voyage expenses (118,828) - (118,828) Net revenues (2) 194,463 - 194,463 Vessel operating expenses (36,612) - (36,612) Time-charter hi
Slide 17: Reconciliation of Non-GAAP Financial Measure – Free Cash Flow
Reconciliation of Non- GAAP Financial Measure – Free Cash Flow (In thousands of U.S. dollars) Three Months Ended Year Ended December 31, December 31, 2023 2023 (unaudited) (unaudited) Net income - GAAP basis 111,694 513,671 Add: Depreciation and amortization 24,627 97,551 Proportionate share of free
Slide 18: Drydock & Off-hire Schedule
Drydock & Off-hire Schedule(1)(2)(3) Teekay Tankers December 31, 2023 (A) March 31, 2024 (E) June 30, 2024 (E) September 30, 2024 (E) December 31, 2024 (E) Total 2024 (E) Total Total Total Total Total Total Vessels Vessels Vessels Vessels Vessels Vessels Off-hire Days Off-hire Days Off-hire Days Off