Teekay LNG (NR) is out with its Q3 20 figures on the 12th nov, in a report we view as credit positive. Key take-aways:
Strong EBITDA (adj.) of USD187m, some 3% down q/q due to more scheduled maintenance. LTM EBITDA (Adj.) of USD752m is 16% higher than last year, owing to the completion of the newbuild programme in December 2019.
Free cash flow after dividends remained strong at USD88m. Helped by the USD112m bond issue in August, total liquidity grew 40% q/q to USD431m, of which USD201m were held in cash. In our view, this mitigates any refinancing risk related to the NOK1.2bn bond maturity in October next year.
Leverage continued to decline, with NIBD/EBITDA (adj.) just below 6.0x at quarter-end. This is the lowest level since its peak of 9.5x in 2018.
Contract coverage for 2021 now 96% fixed at TCE of caUSD80k/day. Spot prices have surged recently on stronger demand from Asia.
