Tanker Investments (TI) suffered a net loss of $5.7 mill for the second quarter of 2014. Net revenues were $8.9 mill in 2Q14.
During the period, the company completed the acquisition two 2010-built VLCCs for an aggregate purchase price of $154 mill; two 2010-built and two 2009-built Aframaxes for an aggregate purchase price of $116 mill and two 2012-built coated Aframaxes for an aggregate purchase price of $95 mill.
Total liquidity, including the value of unmortgaged vessels, was around $172 mill. This included availability under TI’s new $200 mill revolving credit facility, which was completed during the quarter.
In July 2014, Aframax and Suezmax spot rates rallied to the highest levels in the month of July since 2008, the company said.
“The second quarter was an active quarter for expansion and improvement of the Tanker Investments fleet,” said William Hung, TI’s CEO. “During the quarter, we took delivery of eight tankers, of which three were delivered during the last two weeks of June. In addition, we completed the ‘Jiaolong Spirit’ drydocking, which included retrofitting the vessel with fuel-saving modifications. The drydocking resulted in fewer average revenue generating days per vessel.
“Four of our vessels will drydock in the third quarter to coincide with what is typically a seasonally weaker period for spot tanker rates. Similar to the ‘Jiaolong Spirit’, these vessels will also receive fuel-saving modifications and will complete their drydock in time to take advantage of what we expect to be a strong winter period in the spot tanker market.
“During the past quarter, tanker rates have followed their normal seasonal pattern declining from a strong winter. However, a key difference from the past several years is that we have experienced greater volatility in spot tanker rates with average weekly Aframax and Suezmax rates increasing from around $11,000 and $14,000 per day, respectively in early-June to over $43,000 and $44,000 per day in mid-July, respectively.
“In addition, the tanker rates in the first and second quarters of 2014 have been stronger than the respective quarters in 2013, indicating that the fundamentals in the tanker market are improving. We believe strong oil demand combined with negative Aframax and Suezmax fleet growth are the two most important factors driving the volatility and generally stronger spot tanker rates in 2014.
“Looking ahead, we expect a further improvement in tanker market fundamentals in the second half of 2014 which benefits Tanker Investments because all of our ships are trading in the spot market and, with current vessel prices still below long-term average values, we intend to continue growing Tanker Investments’ fleet,” he concluded.
TI is a specialised investment company focused on the oil tanker market. It was formed in January 2014 by Teekay Tankers and Teekay Corp to acquire, operate and sell modern secondhand tankers to benefit from an expected recovery in the current cyclical low of the tanker market.