Teekay Tankers Ltd. (NYSE:TNK) Q1 2023 Earnings Conference Call May 11, 2023 11:00 AM ET

Company Participants

Kevin Mackay - President and Chief Executive Officer

Stewart Andrade - Chief Financial Officer

Conference Call Participants

Jonathan Chappell - Evercore ISI

Omar Nokta - Jefferies LLC

Kenneth Hoexter - Bank of America Merrill Lynch

Operator

Welcome to Teekay Tankers Ltd.'s First Quarter 2023 Earnings Results Conference Call. During the call, all participants will be in a listen-only mode. Afterwards you will be invited to participate in a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded.

Now for opening remarks and introductions, I would like to turn the call over to the company. Please go ahead.

Unidentified Company Representative

Before we begin, I would like to direct all participants to our website at www.teekaytankers.com, where you will find a copy of the first quarter 2023 earnings presentation. Kevin and Stewart will review this presentation during today's conference call.

Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the first quarter 2023 earnings release and earnings presentation available on our website.

I will now turn the call over to Kevin Mackay, Teekay Tankers’ President and CEO, to begin.

Kevin Mackay

Thank you, Ed. Hello, everyone, and thank you very much for joining us today for Teekay Tankers’ first quarter 2023 earnings conference call. Joining me on the call today are Stewart Andrade, Teekay Tankers’ CFO; and Christian Waldegrave, our Director of Research.

Moving to our recent highlights on Slide 3 of the presentation. Teekay Tankers generated total adjusted EBITDA of approximately $206 million in the first quarter, an increase of approximately $26 million in the fourth quarter of 2022. We reported our highest ever quarterly adjusted net income with nearly $175 million or $5.13 per share, an increase from a record fourth quarter of 2022 adjusted net income of approximately $148 million or $4.33 per share. Our strong results have enabled us to reduce our net debt by almost 50% since last quarter to $182 million.

We have also finalized a revolving credit facility for up to $350 million to refinance 19 vessels as we continue to exercise purchase options on vessels in sale-leaseback arrangements. With strong third quarter spot rates and our high operational leverage, Teekay Tankers generated almost $194 million of free cash flow, including approximately $19 million from our eight chartered-in vessels.