Bermuda-based shipping group Teekay Corporation reported a total adjusted EBITDA of USD 237 million in Q1 2019, an increase of 40 percent or USD 70 million when compared to EBITDA of USD 168 million seen in Q1 2018.
As explained by Kenneth Hvid, Teekay’s President and Chief Executive Officer, the increase was “primarily driven by the contract start-up of various growth projects across the Teekay Group, certain LNG vessels commencing new contracts at higher rates and higher spot tanker rates.”
The increases were partially offset primarily by lower revenues from Teekay Parent’s three directly-owned floating production, storage and offloading (FPSO) units in the first quarter of 2019, the group said.
On the other hand, the group posted a GAAP net loss attributable to shareholders of USD 84.3 million in the first quarter of this year, compared to a net loss of USD 20.6 million recorded in the corresponding period a year earlier.
According to Teekay, the Q1 2019 net loss was negatively impacted by a write-down of USD 64.9 million of Teekay Parent’s investment in Teekay Offshore, and an increase in unrealized losses on non-designated derivative instruments, partially offset by a decrease in asset impairments.
In May this year, the group completed the sale of all of its remaining interests in Teekay Offshore to Brookfield for total cash proceeds of USD 100 million.
“Our consolidated and Teekay Parent results in the first quarter of 2019 were negatively impacted by lower revenues from Teekay Parent’s directly-owned FPSO units as a result of some unplanned maintenance, lower production and the adoption of the new lease accounting standard, which reduced revenues by approximately USD 8 million in the first quarter of 2019,” Hvid said.
“The divestment of our remaining interests in Teekay Offshore … is aligned with Teekay’s strategy to simplify and focus on our core gas and tanker businesses. The net proceeds from the divestment allowed us to further delever Teekay Parent’s balance sheet, while also enabling us to reduce the size of the new bond offering to USD 250 million and shorten the tenor to 3.5 years,” he continued.
“Since the beginning of 2018, we have reduced Teekay Parent’s gross debt by over USD 260 million, or 40 percent, which is expected to reduce Teekay Parent’s interest expense and increase its free cash flow.”
Also in May 2019, Teekay refinanced its 2020 bond maturity with a new USD 250 million private offering of 9.25% senior secured notes maturing in November 2022, proceeds from the sale of Teekay Offshore, and existing cash balances.
“With the completion of our 2020 bond refinancing, the near completion of all our LNG growth projects, and the anticipated improving tanker and gas shipping market fundamentals, we believe that we have reached a positive turning point and are now positioned to create greater long-term value,” he concluded.