Long-Term Charters Keep Teekay Afloat

Teekay LNG Partners L.P. reported adjusted net income of USD 46.7 million for the quarter ended September 30, 2014, compared to USD 48.2 million for the same period of the prior year. 

For the nine months ended September 30, 2014, Teekay LNG  reported adjusted net income of USD 131.1 million, compared to USD 128.7 million for the same period of the prior year.

Teekay LNG says that the adjusted net income for the three months ended September 30, 2014 decreased from the same period in the prior year, mainly due to the sale of three 2000 and 2001-built conventional tankers, Tenerife Spirit, Algeciras Spirit, and Huelva Spirit between December 2013 and August 2014, which were partially offset by the acquisitions of, and contributions from, the two Awilco LNG carriers acquired by the company in late-2013.

The nine month net income increase was mainly due to the same factors, as well as to higher earnings from the company’s LPG carriers in the Exmar LPG BVBA joint venture.

During the third quarter of 2014, Teekay LNG generated distributable cash flow of USD 64.2 million, compared to USD 64.6 million in the same quarter of the previous year.

The slight decrease in distributable cash flow was primarily due to the sale of three 2000 and 2001-built conventional tankers between December 2013 and August 2014 and related restructuring charges, which were partially offset by the company’s acquisition and charter-back of two liquefied natural gas (LNG) carriers from Awilco LNG ASA (Awilco) in September and November 2013.

“In contrast to the recent volatility in the equity markets, the Partnership continues to generate stable cash flows from our growing portfolio of long-term, fee-based charter contracts which have an average remaining contract duration of approximately 13 years,” said Peter Evensen , Chief Executive Officer of Teekay GP LLC. “With strong fundamentals in the liquefied gas market, the Partnership continues to add to its existing pipeline of over USD 2.5 billion of committed fleet growth, most of which is scheduled to deliver between 2016 and 2020, including 15 LNG carrier newbuildings and nine LPG carrier newbuildings. The Partnership’s efforts to pursue additional accretive growth opportunities continue to yield results. Last week, we agreed to acquire from I.M. Skaugen a 2003-built LPG carrier, the Norgas Napa, along with a five-year charter back to Skaugen at a fixed-rate plus potential upside through a profit sharing component. This directly-owned on-the-water vessel will be immediately accretive to the Partnership’s distributable cash flows and provide near-term growth, which builds upon and complements our existing pool of committed longer-dated growth investments.”

Press Release