Teekay LNG Partners, one of the world’s largest owners of LNG carriers, swung to a profit in the first quarter of the year as newbuilds spring into action.
Net income for the first quarter reached $21.6 million, which compares to a net loss of $6.9 million in the corresponding quarter in 2018. The profit jumped significantly compared to the $6.6 million reported in the fourth quarter of 2018.
The figures have been positively impacted by earnings from the 10 liquefied natural gas (LNG) carrier newbuildings delivered into the partnership’s fleet, higher earnings from Torben Spirit as well as Magellan Spirit.
Torben Spirit earnings increased due to a higher charter rate on a new three-year charter contract which commenced in December 2018, while Torben Spirit Earnings jumped due to its employment from October 2018 to March 2019.
Speaking of the results, Mark Kremin, president and CEO of Teekay Gas Group, said, “During the first quarter, the Partnership continued to report significant cash flow growth mainly driven by recent newbuild deliveries and the contract start-up of various LNG carriers at higher rates.”
He noted that looking ahead, the company expects a contract start-up of four additional LNG carrier newbuildings and the Bahrain LNG terminal in the second half of 2019.
Kremin added, “Despite the near-term weakness in the spot LNG carrier market since the start of the year, we have recently been able to take advantage of the improving medium-term fundamentals by securing multiple attractive charters on our LNG carriers for periods ranging from one to three years. This has allowed us to lock-in charters at attractive rates and maximize utilization, thereby further enhancing our earnings stability and improving our cash flows.”