Teekay Tankers Ltd. (TNK) has reported an 87.22 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $6.85 million, or $0.04 a share in the quarter, compared with $53.56 million, or $0.34 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $5.10 million, or $0.03 a share compared with $48.54 million or $0.31 a share, a year ago. Revenue during the quarter plunged 30.35 percent to $117.70 million from $168.99 million in the previous year period. Gross margin for the quarter contracted 935 basis points over the previous year period to 84.94 percent. Total expenses were 95.19 percent of quarterly revenues, up from 66.55 percent for the same period last year. That has resulted in a contraction of 2864 basis points in operating margin to 4.81 percent.
Operating income for the quarter was $5.66 million, compared with $56.53 million in the previous year period.
"During the fourth quarter of 2016, we generated free cash flow of $34.2 million, which, together with recent vessel sales and other actions, has allowed us to reduce our financial leverage to 47 percent on a net debt to book capitalization basis," commented Kevin Mackay, Teekay Tankers' president and chief executive officer. "Our fourth quarter results were positively impacted relative to our third quarter results by seasonal strength in the tanker market and increased oil exports out of Nigeria, Libya and the Baltic Sea. Tanker rates continued to be seasonally strong early in the first quarter of 2017; however, rates have recently begun to soften due to several factors, including, among others, regional refinery maintenance, an increasing number of newbuilding tanker deliveries and the effect of OPEC supply cutbacks on overall tanker demand, especially in the Arabian Gulf."
Operating cash flow improves significantly
Teekay Tankers Ltd. has generated cash of $209.98 million from operating activities during the year, up 25.89 percent or $43.19 million, when compared with the last year. Cash flow from investing activities was $36.82 million from investing activities during the year as against cash outgo of $881.97 million in the last year.
The company has spent $275.11 million cash to carry out financing activities during the year as against cash inflow of $648.80 million in the last year period.
Cash and cash equivalents stood at $68.11 million as on Dec. 31, 2016, down 29.36 percent or $28.31 million from $96.42 million on Dec. 31, 2015.
Debt comes down
Teekay Tankers Ltd. has recorded a decline in total debt over the last one year. It stood at $933.02 million as on Dec. 31, 2016, down 19.89 percent or $231.59 million from $1,164.60 million on Dec. 31, 2015. Interest coverage ratio deteriorated to 0.77 for the quarter from 7.31 for the same period last year.
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