Teekay Corp. has reported adjusted net income of US$15.7 million for 1Q15, compared to US$3.5 million in the corresponding period of last year. The company’s net revenues for 1Q15 increased to US$520.2 million, compared to US$471.5 million for 1Q14.
Teekay LNG's total cash flow from vessel operations, including cash flows from equity accounted vessels, was US$119.0 million in 1Q15, compared to US$119.6 million in the same period of 2014. The slight decrease was primarily due to the sale of two conventional tankers and four older Exmar LPG BVBA (Exmar LPG) owned LPG carriers in 2014, a grounding incident and related disputed off-hire for the Magellan Spirit LNG carrier during the period and the scheduled expiration of the time-charter contract for the Methane Spirit LNG carrier in mid-March 2015.
In February 2015, Teekay LNG entered into an agreement with Daewoo Shipbuilding & Marine Engineering Co., Ltd (DSME) for the construction of one additional 173 400 m3 LNG carrier newbuilding, for a total cost of approximately US$220 million, with options to order up to four additional vessels. Teekay LNG intends to secure long-term contract employment for the ordered vessel prior to its scheduled delivery in 4Q18.
In January 2015, the Magellan Spirit LNG carrier was involved in a grounding incident. The vessel was subsequently refloated and returned to service with a majority of the costs of the grounding expected to be covered by insurance, less an applicable deductible. As a result of this incident, the charterer claimed 59 days of vessel off-hire during 1Q15, which in the view of the charterer, permitted the charterer to terminate the charter contract which it claimed to do effective in late-March 2015. The Teekay LNG-Marubeni Joint Venture has disputed both the charterer's aggregate off-hire claims as well as the charterer's ability to terminate the charter contract, which would have otherwise expired in September 2016. The Teekay LNG-Marubeni Joint Venture has obtained legal assistance in resolving this dispute.
In mid-March 2015, the charter contract for the Methane Spirit LNG carrier, which is also owned by the Teekay LNG-Marubeni Joint Venture, expired as scheduled.
The Teekay LNG-Marubeni Joint Venture has secured short-term employment, commencing in September 2015, for both the Magellan Spirit and the Methane Spirit LNG carriers at significantly lower charter rates and continues to seek medium-term to long-term employment.
Edited from various sources by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/14052015/teekay-lng-announces-cash-flow-755/
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