Teekay LNG’s 2018 profit slumps

Teekay LNG Partners, one of the world’s largest owners of LNG carriers, reported a significant cut in net profit during the fourth quarter and full-year 2018. 

Net income for the fourth quarter plunged to $6.58 million from $25.95 million in the previous quarter, the company’s report shows.

The full-year net income dropped from $33.97 million in 2017 to $28.37 million.

The fourth-quarter figures were negatively impacted by various items, including unrealized losses on non-designated and designated derivative instruments and unrealized foreign currency exchange losses.

The adjusted earnings, however, reached $32.63 million in the fourth quarter, up from $19.47 million in the previous three months, while the 2018 adjusted income dropped from $93.85 million in 2017 to $87.7 million in 2018.

Adjusted net income was positively impacted by an increase in earnings due to the deliveries of 12 liquefied natural gas (LNG) carrier newbuildings in the partnership’s consolidated fleet and equity-accounted joint ventures between October 2017 and December 2018, and higher earnings from the Magellan Spirit, which was chartered-in from the partnership’s 52 percent-owned joint venture with Marubeni Corporation commencing in September 2018, the report notes.

Speaking of the results, Mark Kremin, president and CEO of Teekay Gas Group said, “our cash flows and adjusted earnings were up significantly over the prior quarter as the partnership’s LNG segment grew and certain existing vessels commenced new contracts at firm rates.”

The segment continued its expansion in early-2019 with the delivery of two additional newbuilding LNG carriers, including the Yamal Spirit, which delivered on January 31, 2019, soon after finalizing its dedicated financing facility.

“With this latest financing facility now in place, we have completed all of the necessary financings to take delivery of our entire newbuilding orderbook which, at its peak, amounted to approximately $3 billion,” Kremin said.

“We expect our LNG segment results to be significantly higher in 2019 primarily due to the delivery of 15 newbuilding LNG carriers during 2018 and throughout 2019 as well as the start-up of the Bahrain LNG regasification terminal in 2019,” he said.

In its outlook, Teekay LNG Partners, estimates a jump in adjusted net income up to 128 percent above the 2018 figures.