TIL forecasts strong fourth quarter

Nov 06 2015

Tanker Investments (TIL) reported net income of $11.6 mill for the third quarter of 2015, compared with $16.7 mill in the second quarter. For the first nine months of this year, the net income was $47.3 mill, compared to a net loss of $6.9 mill for the period from date of incorporation 10th January, 2014 to 30th September, 2014.

Generated cash flow from vessel operations (CFVO) was $27.6 mill, compared to $29.5 mill in 2Q15. CFVO was $87.2 mill during the first nine months of this year, which had increased from $8.1 mill in the period from the date of incorporation to 30^th September, 2014 due primarily to the increase in the number of vessels and higher TCE rates in 2015.

Net revenues were $46.4 mill in 3Q15, compared with $42.6 mill in the previous quarter, due primarily to revenue relating to the six new Suezmaxes delivered during the third quarter.

During the nine months ended 30^th September, 2015, net revenues increased to $131.3 mill from $31.8 mill in the period from the date of incorporation to 30^th September, 2014, again due primarily to the increase in the number of vessels and higher TCE rates in 2015.

“During the third quarter of 2015, we completed the deliveries of the last of the Suezmaxes into our fleet,” commented William Hung, TIL CEO. “However, similar to previous vessel acquisitions, our results were impacted this quarter by lower rates and longer waiting times incurred by the six Suezmaxes, as they were in the process of obtaining new vetting approvals after technical management of these ships was transferred to a new manager.

“Had these new Suezmaxes traded in-line with the rest of our Suezmax fleet, our third quarter revenues and net income would have been approximately $7.7 mill higher. I’m pleased to report that our new Suezmaxes have now obtained their vetting approvals and as a result are expected to fully contribute to the company’s results going forward.

“Tanker rates spiked at the start of the fourth quarter and have remained firm as we head into the winter tanker market. In particular, the strength in VLCC rates experienced earlier this quarter has had a positive impact on current Suezmax rates. Thus, we expect fourth quarter results to significantly exceed those of the third quarter, which will allow Tanker Investments to de-lever its balance sheet and continue distributing excess capital to shareholders,” he said.

TIL’s daily TCEs for the VLCCs in 3Q15 averaged $37,959, compared to $47,171 in 2Q15; the Suezmaxes averaged $33,880 and $38,760, respectively; Aframaxes $32,483 and $33,132, respectively while LR2s averaged $33,187 in 3Q15, compared with $28,857 in 2Q15.