Teekay Corporation and Teekay Tankers set up Tanker Investments in 2014 to benefit from cyclical fluctuations in the tanker market. However, explaining a change of tactic today, CEO William Hung said: “We do not believe the current market value of our fleet, or our equity value, is representative of future cash flows we expect to generate by trading our vessels, and with this in mind, Tanker Investments’ is now pivoting from a strategy focused on selling our fleet, to an operating strategy as we ride out the softer part of this market cycle.”
Tanker Investments will wait for the tanker market and asset values to rise by actively pursuing time charters and operating its spot fleet in Teekay Tankers revenue sharing agreements.
For the second quarter Tanker Investments posted revenues of $43m, generating a net income of $12.6m.
“Tanker rates have been strong in the first half of 2016, however they have weakened into the summer months which, together with tight credit conditions for the shipping sector, have contributed to a decrease in the value of modern tankers by approximately 20 per cent year-to-date,” Hung said, commenting on the results.