Teekay Tankers Ltd.
NYSE : TNK

Teekay Tankers Ltd.

February 03, 2010 16:02 ET

Teekay Tankers Ltd. Provides Dividend Guidance

HAMILTON, BERMUDA--(Marketwire - Feb. 3, 2010) - Teekay Tankers Ltd. (NYSE:TNK) -

Highlights

  • The Company expects its dividend for the fourth quarter to be between $0.24 and $0.27 per share, payable in mid-March 2010, up from $0.15 per share in the third quarter
  • The spot tanker market has strengthened since mid-December 2009
  • Average spot tanker rates so far in the first quarter of 2010 are well above rates in the fourth quarter of 2009

Teekay Tankers Ltd. (Teekay Tankers or the Company) today provided guidance for its estimated cash dividend per share for the quarter ended December 31, 2009.

"Spot tanker rates were weak during most of the fourth quarter of 2009 with Teekay Tankers' spot-traded fleet averaging approximately $15,000 per day for Aframax tankers and $20,000 per day for Suezmax tankers. Nevertheless, because of the high rates earned by our vessels on fixed-rate charters, we expect to pay a relatively attractive fourth quarter dividend in the range of $0.24 to $0.27 per share," commented Bjorn Moller, Teekay Tankers' Chief Executive Officer. "We are pleased to report that the fourth quarter ended on a stronger note due to a combination of improving economic fundamentals worldwide, seasonal factors, and the continued use of tankers for floating storage, all of which contributed to tighter supply and demand fundamentals. This momentum has carried into the new year, with spot rates for the first quarter of 2010 so far averaging well above the fourth quarter of 2009."

Mr. Moller continued, "We anticipate 2010 will be another year of significant volatility for the tanker market with spot rates positively influenced by growing demand for tankers due to a strengthening global economy and the scrapping of older tankers due to the 2010 single-hull phase out regulations, countered by the negative influence of a relatively high amount of new tanker capacity entering the fleet this year. We have positioned Teekay Tankers' fleet accordingly, locking in approximately half our 2010 vessel days at fixed rates averaging over $26,500 per day and leaving the rest of our vessel days to benefit from the upside in the spot market. Combined with our low quarterly debt service costs, this approach provides a floor under our cash flows, enabling us to pay a dividend under any market scenario while at the same time providing shareholders with upside in tanker rates. For example, based on our current fleet employment profile, if spot rates for 2010 average $20,000 per day for Aframax tankers and $30,000 per day for Suezmax tankers, which are approximately the spot rates we have realized in the first quarter so far, we would expect to pay out an annual dividend of approximately $1.30 per share. Even if spot rates were to fall to the levels experienced in the fourth quarter of 2009, we would still expect to pay an annual 2010 dividend of approximately $0.90 per share and for each $5,000 per day increase in average spot rates above this, Teekay Tankers would be able to pay an additional $0.30 per share in 2010."

As at January 31, 2010, seven of Teekay Tankers' 12 vessels were operating under fixed-rate time-charters and the remaining five were traded in the spot market through the Teekay-managed Aframax and Gemini Suezmax Commercial Pools. Based on the existing fleet employment profile, approximately 55 percent of the Company's revenue days in 2010 will come from vessels operating under fixed-rate time-charter contracts.

The Company expects to pay its fourth quarter dividend prior to March 16, 2010 and plans to host a conference call for investors following the release of its fourth quarter results in early March 2010.

About Teekay Tankers

Teekay Tankers Ltd. was formed in December 2007 by Teekay Corporation (NYSE:TK) as part of its strategy to expand its conventional oil tanker business. Teekay Tankers currently owns a fleet of nine double-hull Aframax tankers and three double-hull Suezmax tankers, which an affiliate of Teekay Corporation manages through a mix of short- or medium-term fixed-rate time-charter contracts of up to three years in duration and spot tanker market trading. In addition, Teekay Corporation has agreed to offer to Teekay Tankers, the opportunity to purchase an additional Suezmax tanker. Teekay Tankers' policy is to pay a variable quarterly dividend equal to its cash available for distribution, subject to any reserves its board of directors may from time-to-time determine are required. Since the Company's initial public offering in December 2007, it has paid a dividend for seven consecutive quarters.

Teekay Tankers' common stock trades on the New York Stock Exchange under the symbol "TNK".

FORWARD LOOKING STATEMENTS

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: spot tanker rates achieved in the fourth quarter of 2009 and in 2010 to date; the relative strength of the spot tanker market; results of the Company's mix of spot market and time-charter trading; the estimated dividends per share for the quarter ended December 31, 2009; and the Company's potential cash dividend per share in fiscal 2010, based on its current fleet employment profile and potential average spot tanker rates for the year. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in the production of or demand for oil; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of short- or medium-term contracts and inability of the Company to renew or replace short- or medium-term contracts; changes in interest rates and the capital markets; increases in the Company's expenses, including any unscheduled drydocking expenses; the Company's ability to raise financing to purchase additional vessels; the ability of Teekay Tankers' board of directors to establish cash reserves for the prudent conduct of Teekay Tankers' business or otherwise; and other factors discussed in Teekay Tankers' filings from time to time with the United States Securities and Exchange Commission, including its Report on Form 20-F for the fiscal year ended December 31, 2008. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Contact Information

  • Teekay Tankers Ltd.
    Kent Alekson
    Investor Relations Enquiries
    + 1 (604) 844-6654
    or
    Teekay Tankers Ltd.
    Alana Duffy
    Media Enquiries
    + 1 (604) 844-6631
    www.teekaytankers.com