Teekay Tankers Ltd. (NYSE:TNK) Q4 2023 Earnings Call Transcript February 22, 2024 11:00 AM ET

Company Participants

Kevin Mackay - President and CEO

Stewart Andrade - CFO

Conference Call Participants

Jon Chappell - Evercore

Omar Nokta - Jefferies

Ken Hoexter - Bank of America

Eirik Haavaldsen - Pareto Securities

Operator

Welcome to the Teekay Tankers Limited Fourth Quarter 2023 Earnings Results Conference Call. [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.teekay.com, where you'll find a copy of the fourth quarter and annual 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 fourth quarter and annual 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' fourth quarter and annual 2023 earnings conference call. Joining me on the call is Stewart Andrade, Teekay Tankers' CFO.

Moving to our recent highlights on Slide 3 of the presentation, Teekay Tankers reported adjusted net income of $99.5 million or $2.91 per share an increased from last quarter's levels of $76.6 million or $2.24 per share respectively. The company's 2023 adjusted net income of $500.5 million or $14.65 per share was more than double our strong 2022 earnings and established a new record for Teekay Tankers highest ever annual net income.

Amid historically strong spot rates, the significant value of our high operating leverage is clear. As a reminder, for every $5,000 increase in tanker rates above our free cash flow breakeven of $16,000 per day, we expect to generate approximately $2.50 of annual free cash flow per share. We will provide further information of this later in the presentation.

In January, we gave notice to repurchase the remaining eight vessels on sale leaseback arrangements for $137 million. Once complete, this repurchase will bring the total number of vessels repurchased since March 2023 to 27 vessels for a total of $501 million reducing our total debt outstanding to zero and decreasing our cash breakeven rates.