Teekay Tankers has again held back potential dividend payments to investors as it recorded a profitable start to the year.

New York-listed Teekay has a strategy to pay out between 30% and 50% of adjusted net income to shareholders and logged a profit of $12.4m in the opening three months of 2019.

However, repeating a stance taken in the final quarter of 2018, the shipowner opted instead to keep the cash with a view to paying down debt.

It explained the position was due to losses in the first nine months of 2018 and the current tanker market weakness.

“Average crude tanker spot rates moderately increased during the first quarter of 2019, which resulted in another profitable quarter and slightly improved results over the prior quarter,” said chief executive Kevin Mackay.

“However, spot tanker rates declined towards the latter half of the first quarter, and the market faces a number of seasonal and other short-term headwinds, which are expected to reduce our earnings during the second quarter of 2019.

“We believe these factors are temporary in nature and expect a significant firming in the tanker market from the second half of 2019 due to positive underlying oil demand, an expected increase in U.S. crude oil exports, higher Opec production, lower tanker fleet growth, and the positive impacts of IMO 2020.”

Icing the dividend is not the only liquidity move undertaken by Teekay Tankers.

The shipowner is $25m to the good after closing a sale-and-leaseback deal for two suezmaxes and has added $15m to a loan to help finance its pool operations.

Mackay said with stronger liquidity and a leading position in the suezmax and aframax markets, the company was well-positioned to benefit from a tanker market recovery in the second half of 2019 and into 2020.

With a firmer market expected, Teekay has chartered in an aframax tanker on a two-year deal with options at $21,000 per day.