Ship Transfers Impact TIL’s Q3 Results, CEO Bullish on Q4

Oslo-listed Tanker Investments Ltd. (TIL) reported net income of USD 11.6 million for the third quarter of 2015 compared to net income of USD 16.7 million in the second quarter of 2015.

For the nine months ended September 30, 2015, net income was USD 47.3 million, compared to a net loss of USD 6.9 million for the period from date of incorporation January 10, 2014 to September 30, 2014.

“During the third quarter of 2015, we completed the deliveries of the last of the Suezmaxes into our fleet,” commented William Hung, Tanker Investments Chief Executive Officer.

“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 USD 7.7 million 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.”

Generated cash flow from vessel operations (CFVO1 ) was USD 27.6 million in the third quarter of 2015, compared to USD 29.5 million in the previous quarter.

“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 delever its balance sheet and continue distributing excess capital to shareholders,” Hung continued.

During the third quarter of 2015, net revenues increased to USD 46.4 million from USD 42.6 million in the second quarter of 2015 due primarily to revenue relating to the six new Suezmax vessels delivered during the third quarter.

During the nine-month period, net revenues increased to USD 131.3 million from USD 31.8 million from January 10, 2014, due to the increase in the number of vessels and higher TCE rates in 2015.

TIL’s  Board authorized an additional USD 30 million in share repurchases, increasing the total remaining authorization to USD 39.2 million.

In terms of tanker market outlook, TIL believes that the rates would remain high due to positive tanker supply fundamentals, as fleet growth remains below historical averages, high refinery throughput,  and increased earnings, as bunker fuel prices remain low due to low global oil prices.

“Crude tanker rates are expected to remain firm through the remainder of the fourth quarter and into the first quarter of 2016, largely due to the factors highlighted above and the potential for weather and port delays,” TIL said.

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