Teekay Corp. Ltd. Q4 FY2024 earnings call

• Teekay Tankers had adjusted net income of $52M ($1.50/share) in Q4 2024 and $355M ($10.31/share) for full year 2024, with Q4 free cash flow $69M and full year $415M.
• Sold two 2009-built Suezmaxes and one 2006-built LR2 for $96M, with total proceeds from five vessel sales at $160M and book gains near $60M.
• Purchased an LR2 tanker via MOA, to close in Q2.
• Completed acquisition of Teekay Australia business and transfer of remaining management services companies.
• Made a 5.1% passive investment in Ardmore Shipping Corporation.
• Declared quarterly fixed dividend of $0.25 per share, with full year dividends at $3 per share.

Teekay Tankers reported adjusted net income of $52 million or $1.50 per share for the fourth quarter, and $355 million or $10.31 per share for the full year 2024. Fourth quarter free cash flow was $69 million, with full year at $415 million. Sold five vessels (2005-2009 build) for combined proceeds of $160 million, resulting in expected book gains on sale of nearly $60 million. Purchased an LR2 tanker, completed acquisition of Teekay Australia business, and made a 5.1% passive investment in Ardmore Shipping Corporation. Spot rates for Q1 to date are slightly below Q4 but above Teekay Tankers' free cash flow breakeven levels.

• Teekay Tankers expects to generate significant free cash flow and earnings as spot rates are above breakeven levels.
• Ongoing fleet management and renewal plan: selling older vessels and acquiring modern tonnage.
• Board will discuss potential special dividend during upcoming board meeting.

• Geopolitical events like Ukraine and Middle East conflicts impact tanker demand and trade patterns.
• Sanctions on tankers (e.g., 73 ships to be added to EU sanctions list) create volatility in trade and freight markets.
• Uncertainty around pace of scrapping older tankers and normalization of seaborne oil trade, leading to potential supply chain inefficiencies.

Q: Jon Chappell asked about the Ardmore investment and capital allocation.

A: Kenneth Hvid stated the Ardmore investment was opportunistic due to good value, small relative to Teekay's asset base, and capital allocation includes fixed dividend and discussion of special dividend with the board.

Q: Omar Nokta asked about TNK's evolution and impact of sanctions.

A: Kenneth Hvid mentioned Ardmore stake is small, priority is core fleet renewal, and sanctions have impacted Russian oil trade with difficulties in moving oil and India/China seeking alternative sources.

Q: Ken Hoexter asked about rates, seasonality, and sanctions impact.

A: Kenneth Hvid discussed rate drivers including arbitragers and replacement barrels, seasonality trends, and uncertainty around trade normalization and pace of scrapping old tankers with no clear timeline on when trade might normalize