Teekay LNG Partners says its quarterly performance was impacted by a “heavy drydock schedule” and the firm expects this to continue in the third quarter as well.
The Bermuda-based operator of 47 LNG carriers said its GAAP net income reached $53.3 million in the second quarter. This compares to $87.5 million in the previous quarter and $44.9 million in the April-June period last year.
Adjusted net income reached $57 million, compared to $60.4 million in the first quarter of this year and $62.6 million in the second quarter of 2020.
Moreover, Teekay LNG reported an adjusted Ebitda of $183.5 million. This compares to $184.2 million in the prior quarter and $192.3 million in the second quarter of last year.
The firm has earlier this year secured employment for 98 percent of its LNG fleet for 2021, and 89 percent for 2022.
Drydock schedule and “strong” LNG market
“As expected, our results in the second quarter reflect a heavier than normal drydock schedule,” Mark Kremin, chief executive of Teekay Gas, said.
Looking ahead, Kremin expects a “heavy drydock schedule” to impact Teekay LNG’s third-quarter results as well.
“However, for the fourth quarter of 2021, we are expecting a bounce back as a result of a substantially reduced number of drydock days across the fleet,” he said.
In addition, Kremin said the spot and term charter market for LNG carriers had been “counter-seasonally strong over the past six months, and LNG supply and demand fundamentals are pointing to continued strength through the rest of 2021 and into 2022.”
This should benefit Teekay LNG’s Creole Spirit, which is on a market-linked contract until mid-February 2022.
“We believe this market strength could also be a tailwind for Teekay LNG next year as we have a few LNG carriers expected to roll-off of their current contracts during the first half of next year,” he said.
“We do, however, continue to have nearly all of our 2021 and the vast majority of our 2022 revenue days already secured on fixed-rate charters and generating consistent cash flow,” Kremin said.