Tim charter equivalent (TCE) revenues were down 10 per cent on the prior year quarter, at $206.6 million. The decline was due to increased spot exposure combined with lower average spot rates earned in most of the company's international vessel classes as well as significantly higher fuel costs that were not recoverable in the marketplace.
Revenue days increased quarter-over-quarter by 819 days, or 9 percent, primarily as a result of net growth in the international product carrier fleet centered in the MR class and in the U.S.-flag fleet, which reflected deliveries of newbuilding product carriers and the return of one articulated tug barge (ATB) to service from lay up late in 2010.
Morten Arntzen, President and CEO stated, "While our markets continue to show weakness, particularly crude freight rates, and our results remain disappointing, we believe our business is moving in the right direction. Our International Products fleet is now booking higher rates than we have seen since early 2009, and we believe the demand and supply outlook in this segment portends a multi-year rebound. Our LNG carriers and FSOs are delivering the earnings and cash flows we expect. Expenses on shore and at sea remain under control. The turnaround in our U.S. Flag fleet has taken hold; our Delaware Bay lightering volumes have picked up nicely and both of our shuttle tankers are on charter to Petrobras. Even though our crude business will likely remain supply-challenged through the rest of 2011, we expect continued global recovery to increase the call on Middle East OPEC crude, leading to more activity in the second half of 2011 than in the first."
May 3, 2011