Teekay Tankers Ltd (TNK) has reported 92.74 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $2.83 million, or $0.02 a share in the quarter, compared with $38.98 million, or $0.25 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $7.03 million, or $0.04 a share compared with $45.96 million or $0.29 a share, a year ago. Revenue during the quarter dropped 24.16 percent to $125.10 million from $164.95 million in the previous year period. Gross margin for the quarter contracted 1177 basis points over the previous year period to 80.46 percent. Total expenses were 92.80 percent of quarterly revenues, up from 67.36 percent for the same period last year. That has resulted in a contraction of 2543 basis points in operating margin to 7.20 percent.
Operating income for the quarter was $9.01 million, compared with $53.84 million in the previous year period.
"During the first quarter of 2017, we generated cash flow from operations of $34.4 million, and paid a quarterly dividend of 3 cents per share," commented Kevin Mackay, Teekay Tankers' President and Chief Executive Officer. "While spot tanker rates were largely in-line with those for the fourth quarter of 2016, the tanker market experienced downward pressure over the course of the recent quarter, primarily due to heavy refinery maintenance, OPEC supply cuts and higher tanker fleet growth. Overall, we anticipate the tanker market to weaken into 2017 as a result of ongoing OPEC supply cuts and higher tanker fleet growth; however, robust global oil demand growth and changing trading patterns due to OPEC supply cuts are expected to provide support to mid-size tanker demand as more crude oil moves long-haul from the Atlantic basin to Asia. Looking ahead to 2018, we anticipate a renewed market upturn driven by a lack of new tanker ordering, increased scrapping due to regulatory changes, and a more balanced oil market."
Operating cash flow drops significantly
Teekay Tankers Ltd has generated cash of $28.78 million from operating activities during the quarter, down 48.80 percent or $ 27.44 million, when compared with the last year period. Cash flow from investing activities was $30.77 million for the quarter, up 143.48 percent or $18.13 million, when compared with the last year period.
The company has spent $80.09 million cash to carry out financing activities during the quarter as against cash outgo of $96.90 million in the last year period.
Cash and cash equivalents stood at $47.56 million as on Mar. 31, 2017, down 30.44 percent or $20.81 million from $68.37 million on Mar. 31, 2016.
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