Tsakos Energy Navigation Limited 7 Sep 232023 Q2 Earnings call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the Second Quarter 2023 Financial Results.

We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. -- I'm sorry, Dr. Nikolas Tsakos, President and CEO; Mr. Officer; Financial Chief Durham, and Mr. Paul Chief Saroglou, Operating Officer company. the of George

session. must this in is presentation be question-and-answer are all being followed Instructions] listen-only a At participants will recorded a today. time, this you advice that mode. There by [Operator conference I a

And pass Please Navigation. go over sir. the to President Nicolas Bornozis, Energy now, Capital of Link, Tsakos I'll of Investor floor Mr. Relations Advisor ahead,

much, and good morning of all participants. very to our you Thank

Capital operator Link, Relations mentioned, Tsakos I'm Navigation. the of Energy Bornozis As to Investor Nicolas Advisor

Before tributes take as in Irene I Irene And our Dr. for pioneered she received caring seafarers and condolences continue shipping, and and Greek Doctor all Dr. their literature others. of on many, like with family the Academy Cardiology, Hellenic conference naval to also Euroclassica Foundation our of figure medicine, prestigious institutions Shipping. of us call, this behalf the Group She Saroglou-Tsakos, and who co-founded is family. authoring I medical Nickolas' would condolences of Athens, Tsakos for of the express Tsakos loss from many to to Saroglou-Tsakos, beloved the families. the opportunity known the mother, to again, like the the distinguished Tsakos of a passionately numerous

[indiscernible] you or right a will and of case us at And quarter In call and second the at call. email for today's now, ended publicly away. This XX, you earnings will us ten@capitallink.com financial proceed XXXX. results for conference have released please six I not with morning, its XXX-XXX-XXXX e-mailed a we release, the company June do months copy

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floor we that And would And to note, year record, with publicly the in Takis Chairman before hope happy remind happier track another I like, passing all Board, a celebrating that often be for more term. commitment Columbia his two and unique York New creating the of now Dr. know Energy company. note, year that everyone the listed Tsakos is daughters will on I say us shareholder to enviable we to long being a the the a value Arapoglou, to the have and on to Mr. attending Tsakos would XXth company's say of Navigation this University.

to pass Tsakos of Dr. the Mr. Navigation. Board I with And Energy that, will floor Chairman Arapoglou, the the of -- Takis to

you thank Thank you, today. our Nicolas. Good for morning, joining call everyone, and

of best course, set following the market. results, results. great from of They are the spot the and all be charter benefit strength model. making The of use As in needs time in opportunities thoroughly congratulated. expected, business to a Management continued

bad in times. and be in to to shareholders good able The model, of course, allows them reward

or been of And directly indirectly paying years. our couple dividends, So, last we've the repaying continued in shareholders. consistently returning this we've prefs framework, value in to

liquidity excess the this -- with old appropriate is will forward we market it And and which going refreshing continue new to the the reward continue do. vessels, stock and hopefully, state-of-the-art selling fleet, will to that continue everyone. from buying feel We model

Congratulations looking you. Nikolas it forward Tsakos the to success. for team Thank continued and and to So, me. that's

on the to pass I'll floor Nikolas Tsakos.

good a is New and full and good Chairman, thing very so for you, morning product here, carriers. gear Thank humid is thing from air Good sunny, a York. conditioning warm working it's

it [indiscernible] months energy first an Again, tanker for has six has period the exciting been been and thereafter shipping. -- and

take allows in ahead, better company us a going of better, better think have and days or days. demand we the envision I or to similar to equation similar perhaps advantage good placed days the position since even supply

the this are happened And and years charter $XX,XXX XXXX. long chartering three to a three-year rate to clients last day. a out went modern in in -- so road on This the something with like positive or two for was XX a our seen that's since in of very are a oil profit And for And that VLCCs the been transactions major on we've excess for a that -- $XX,XXX, our see that of charted we down lot to from it's plus sharing. VLCC see that. charter period our major -- ships was VLCC period highest charter. close years returns, a the ships since is a happening And marketplace day every relatively also week looking

So, the are good. prospects

forward. years. we've we be been Bornozis Group is shareholder to said, major for boat this around driving in we more and few Nick the around for As the and XX harbors safer years and The planning hopefully Tsakos to are as a kindly go we're wealthier

months, been sale the vessels. our of first-generation timely It's advantage six first of we the -- took

clients. would only are our to our and in with month with flying oil, methanol we this ship ships hopefully taking These advantage green be but combinations. fuel take going end the our delivery of replacing since that them green at design burn that gas now Korea start are also can forward not other the are dual-fuel initiative. and XX looking and to We to vessels I of

sheet, on Stock York conservative a has TEN a Exchange. balance now tenure. stopped very as in New always. dividend XX-year paying our the never we've keeping XX years We're been

profits think in have close and -- and distributed that, in $XXX preferred of in dividends common $XXX I million million dividends, dividends. made billion to including on we top $X.X our

-- year for next be seem to are the prospects healthy. We

I undervalued, aim said, share our believe the still looking our supply hopefully, appetite nicely As League aim we're on we positive -- and the now our York Nick, be very share higher college price clients here. I have pay work wishes demand for much looks our your And and -- to is for think harder get that and navigate price I up. very and and New as -- often having I of think to to to tuitions two you thank more in an Ivy University. very is the at

And where background together, we'll George answer we then and give a us with that, and how will questions ask financials. of we come have we bit of Paul to us -- the little can the give

to Nikolas. you you, call earnings Good Thank our today. of joining morning all

half XXXX the reported and XXth unaudited a second anniversary we celebrate XXXX. our is for We a year first quarter as this results the public of financial morning company.

is was than in year going change better, which of year, probably part good, XXXX, not to conditions as the the the no the best since second Assuming XXXX during the more if company's market be inception.

takeaways. Some key

on product in flows as movements These changes seaborne sanctions be largest to change to permanent. We oil continued crude of and to trade ongoing Western a result oil. Russian appear the experience

multiplier West positive United the X% the with States, Europe war fleet. tanker client mile oil demand reporting Ukraine, yards of Russian and America low, the was existing the the the replaced of Before but being effect all-time Many from was ton war tanker are from same continues, an are a South Middle and now than in freight rates. Africa, time, buildings creating At oil biggest at as orders availability XXXX. oil, East, Russian less new new Guiana, with for the

X.X XXXX. oil realized, all-time Agency the will growing And million demand grow, forecast million continues recently to boosted petrochemical day generation surging XXX.X The by use by barrels post-COVID to If of be published International per in the an activity and to global global in by figure power air latest increased record. and barrels from recovery more per this global day summer in Energy demand continue year it oil China. travel, strong have oil

like cuts until There production inflation, the tightening headwinds the the financial persistent are global as well condition, OPEC+ end year. Ukraine, and global of in the war

fundamentals global continue strong is years. year. to the next However, growing tanker a X% 'XX is rate two same by approximately economy expected three in the favor to for and and to growing Oil the market tanker demand continue next by

barrels The oil gone catalyst thanks higher, same time, crisis, that on Russian navigate freight tanker the to we order volumes Western up war, Let's averaging positive in since At now. pandemic came of flowing the have out sanctions all post-COVID the low an are to oil of to now created X.X the challenges book, time and aging the for million seaborne to the go out without X, day fleet, even haul the Ukraine. and and price voyage of propel presentation. from major and operating India Slide million day X.X and to last were demand were have the recovery, year cap disrupted as imposed inception Starting faced about Recently, with barrels distances long as the industry. to served and tragic our Almost COVID company came we routes by were established about rates model. Russian record The our oil continue additional stronger, see trade in of and crude we long XXXX, China. as each elongated. war a its U.S. exports per result we slides five fundamentals, war

low. times the not the listing. series and prices the since We Stock in the company's market, the see the we fleet and the common for the company's York numbers this raised growth at present offerings, of market X, access share asset usually blue inception. but share capital Exchange when growth New number Slide at In boxes In preferred top since were company's capital offering of red, in slide,

million preferred $XXX we the company a C, redeemed totaling been $XX par of preferred par of plus have million payments. value, fully B, in of the saving The of instrument as value, year speak, placed series million $XX and excess first per D, privately coupon Series three initial

and fleet its the we X, current number fleet employment. Slide see In

We vessels. operational fleet of XX have an

We charters of these TEN tanker savings. have affreightments and with of in charters charters contract, the spots, time XX the vessels market or the profit with of exposure the or capturing This well XX and secured sharing. XX% fixed out combination XX% positioned out XX fleet water means XX with in profit positive and market contract continue of to of is time tankers are that time fundamentals.

and quarter of XXXX six first of year product of: medium- Except divestment for modern vessels second the charters. and the today, MRs for two scrubber-fitted delivered later the forward greener with delivery built newbuilding month; vessels. we first delivered XX eco-friendly year, after years starting newbuildings against as consisting us for four TEN XXXX. will fixed tankers time XXXX; eco-friendly for from the rest of this with the Suezmaxes have built fact, during to a has the company two early and have replaced also be two be been Any long-term in of earlier delivery tankers MR generation Suezmaxes shuttle the tankers this handysize in in the one announced done be XXXX in dual-fuel scrubber-fitted delivery two program the Aframaxes currently this for two delivery of MRs, XXXX; half that to will will two two tankers as

and next current company's we the clients. the slide, long-term In see

consisting largest topping all charters. As you newbuildings all have of companies, base as Equinor with currently charter long refineries, with vessels global energy list and time commodity see, on we our chip nine major traders, customer blue four the

presents the vessel for In operate all-in various the we side cost Slide in X, breakeven the types left TEN.

to let charter vessel means revenue We the operating from the to operating Fleet overheads, contribute the in is of annual which profitability the increase number to $X.XX our the currently finance the to utilization element, exposure thanks to commissions, generate year for the every paying and And rates. EPS vessels amounted the $XXXX spot Our which of cost impact first vessels strong is is that chartering the trading expenses, spot the model costs simple. profit rates, a have XX.X%, in revenue have half plus company's based expenses, try vessels and sharing of costs, in on TEN very spot number. company. for cover time to

Since company a debt of $XXX Debt Slide Series we and instrument. in of privately placed then, in December preferred reduction, allocation. an preferred debt picked public company's is of The capital integral million shares, XXXX. of plus in have three X, million redeemed part $XXX the repaid

a fleet highlight XXXX. that this the the Slide since maintained throughout. reserves and this growth, downs in of X would revenue increased profitability; performance the the ups cash have financial snapshot to of in the company during period; the the EBITDA as has We strong like company's period; changes bottom-line navigated XX-year as the and shipping market the we

the paying down a that dividend to has always important in XX, and for cycle. dividend debt, addition Slide market common for we see irrespective TEN continuity shareholders In of is paid management.

down, June have is on that's of yield announced dividend total today we price dividend night. We Our will XX. $X.XX paid (ph) $X.XX semi-annual. closing share for per break the share, the $X.XX policy be already year that last this the To X% [basis]

we be a in is XX which in be later year -- the and to as year X December paid $X.XX of be of closer this and that XX $X.XX total times on paid final is shareholders will in $X.XX special the $X.XX, paid year. at will distribution. last and another date that up, will October be paid will The Another October the announced December to top record the a

year's about since have in this year. the $XX XXXX paid Following December, would of shareholders excess last million its in or the million $XXX listing average dividend on initial to company in per distributed

X.X in Pacific a expects million International In oil and with day be grow oil region, going Despite this million day to of to the China. per approximately XXX.X grow. mainly Asia It's barrels from demand to Energy global year per Slide by XXXX. XX, Agency growth to and barrels financial geopolitical coming demand continues year headwinds, most global record the

On Brazil, come XXXX growth the like the Canada, supply from non-OPEC Mexico to Norway. is countries, United side, expected States, Guyana, most in and the of

order book global years. This grow, stands of tankers. the than August supply X% XX, demand at tankers less look The the continues as Slide as three oil at over the to order In the for next let's forecast XXX or is of a lowest or part the over same vessels time, the is or has XX% are years, of almost currently over years. of the fleet, XX more X,XXX XX tankers in than fleet big the approximately been XX% almost book At years. XX XXX

activity since shows XXXX. slide next scrapping The the

-- with more and to XX we regulations this over and have the is believe scrapping almost fleet is year, of but XX% For years, low, we being upcoming pick industry scrapping initiatives decarbonization than XX% going up.

tanker Overall, for all these factors the years. point to a few market supply balanced next

will the I year. through first half that, the of with And financial for to Paul walk highlights the and Paul? quarter us ask second

you, Thank George.

So, at we're a four-month period today six-month period. and a looking

months, and XX% expenses the to the the a six of six million, the half Revenues increased $XXX months $XXX company's income year's over EBITDA increase vessel of showing last voyage million, six In operating the to in June, prior So, months. XX% increase year, $XXX compared from months. reserves. million, million adding earned totaled cash company decrease of an six a falling $XXX with prior the net expenses to

three spot company the million, helped in in the stronger $XX three total at million, months. the amounted in earlier million, the by a operating before. net a income months amounted Time [$XX million] of $XXX to economy In to $XXX expenses months a to three revenue while X% U.S. months gained with June, revenue of Revenues than as the (ph). similar charter increase level amounted

share million the quarter. $XX also Our profit in contributed

previous three three expenses bunker as months, stayed lower operating to Total In year's expenses XX% did and depreciation due decreased months the voyage the expenses the the due as amortization. vessel month's same costs. by period levels, at three prior vessel fell to

we been months, bottom-line continue successful a which $XXX our redeeming of in generous amounts in stocks, preferred resulted recent already totaling over large have In that million, the future. over has to will benefit

of be continue to months from the new utilizing months, in-house company for remaining preferred to this apart In the taken advantage in therefore, Over of focus the resources to of a the company vessels develop past management. directions. will new shares, building its year, organization redeeming much major has and restructure and the

And order months and (ph). our that to considerable for detail will relating finally, be shortly to there the six will extra financials provide shareholders, to months, more our provide in the an SEC three to detail [unaudited] filing

to I'll Nikolas. on pass Now,

floor yours. Nikolas, the is Operator?

No, I'm listening here. on I mute was achievements. actually to Paul's

So I'm Paul keep the on. And on up back pounding numbers.

I common and prefers useful in will distributed, in company expensive for facing significantly made very when million, of the think $XXX million to when months dividends ago vehicles. the out years we one -- it share growing has using hopefully, said we expensive can into these buying is redeem We that growing have in XX a which safe the gist everybody out the them for back was very year. way, increase times difficult [indiscernible] been were what were and that very, plan of very $XXX-or-more future. And remaining afford was we else and a six

if everything common share shareholders, unprecedented actually that $XX very, be an had over dividend for we But very the our we a we I are we a our that If the here peer that obligations $X.XX the think the on of of dividend to out had share. has problems of preferreds, group cheap would very we term. a would and lot long in be done soon, years. been maintained facing But

safely So, these that to going happy above keep I'm took aim we profitably always very is head and our literally, navigate our water forward. decisions.

forward. And income green a vessels. our program gone exciting very then George described, another double-fuel And has as think, very, I going into of million net newbuilding $XXX demanding,

expression? our forward. have where money -- I and mouth is. Okay, our put this we going because mean, the I we're So Is

able, dividends I simple much balance going increase be more sheet, we forward. common shareholders for to a think, easy-to-navigate our with also will and Now,

been of It the has advantage took June, the since market. of -- we end strong

our We have increased business.

made eight We new charters. have

very on six We're have daily hires looking on at high We extended LNGs. daily our many on surprisingly that for six those ships. figure levels --

So, and XXXX, would are could be, for I better we hopefully But much And the the will sure, right, year. think record this for months the forward even in going a be are year. be year. nine I think anyway, predictions if we waters. surprised hopefully safer another pleasantly And

open I And that, you. any the questions. like would to floor with Thank for

from the first your with you. comes proceed [Operator question Nokta Omar Thank Instructions] line of Jefferies. question. with Our Please

could Hey, Always TEN always, good wanted from fun a I update is you. afternoon. -- about and guys, ask morning, as Thank fleet how exciting to as it and good the team. makeup your of it vessels. some Recently risen crude taking be delivery but result going a crude forward. the tanker tankers, as your your has older more product selling of modern exposure also of

of just the this Is [indiscernible] the the of into back beginning placed expansion orders this to scrubber-fitted two TEN for maybe product? You balance MRs. cycle an bring the for fleet

thank ourselves that and ago Omar. at -- large year. the a Yes, Yes, really first well. took in did the you the served when months we And us operator. ice naturally, deals six of the those for much, were to timely vessels the advantage we I years block price we we took take in the sold of ships, we out amazingly largest this of I'm as ago. -- number sale were them XX those talking our about market. do And back decision not very years eight sold that want bought We XX When of same vessels build the that first-generation we mean, almost period class those a we of bought ships

environmentally vessels dual-fuel similar So, much, now a them. much with we to building replace friendly are and more much,

but I not would are will that the building we on on too. the coming we we penny fleet, fleet continue, single we and So, back think see spend every will side not --

(ph) remarks, fuels Aframax well. in mentioned Okay. at What's you becomes product for until the you when ships, say, ammonia-ready the as during And you've alternative or looking the it viable carriers. maybe more [dual-fuel] truly your Thank you. ammonia order And would dual-fuel mentioned And appetite and the the construction got tankers? or then, yeah, the then, to, methanol wait dual-fuel your you process? you -- you comes LNG opening have would

the reminds the Well, the this question of COVID. me that for billion-dollar -- we're it vaccines is

Pfizer & You if should should if we Johnson Johnson or never knew or we do do Moderna.

follow have really it's thank disease. not -- our we a So, do lead I investment. vessel the God An of any ammonia-ready we million-dollar But, clients. mean, is

hazard and So, we seafarers looking the for put it, risk. wanting convinced I'm ammonia mainly do our And be happy alternative. as to can seafarers' seafarers not a have might that course, with not that is think, the ammonia future, that problems of at but the not we can the of ourselves because are I unions, the

would a which doing is methanol, hand, other newbuilding and closely clients, answering optionality. going we if take alternatives methanol I plus actually the gas on, this don't taking but are your of discussing an on is and said, looking the between that fuel, our also On our is we're very as department somewhere I forward. chance today's something I to know question,

Definitely, final you. one for maybe that's helpful. Nik, just me. Thank one And

if to the to to these these on term intend Just a take delivery? ships what's them discussions opportunistic how you on then looking Or terms idea terms the ships? you're wanted of -- on charters them how them MR the are put spot, of... you put deploying you keep of more and are on two delivery Just you ahead already those the those of Are in and of customer sense contract, in get with great? newbuilding, great, in

profit shares -- accretive Suezmax, excited Then, the you if have we with and currently built. I'm which the XX MRs. are see our will out Well, mean, course, that you and of and very have we I XX long transactions. the of very already look vessels, charters vessels And six about, being at

with but we exposure. good our arrangements, charter market. those a we which will those do So, to against We keep mainly very to ships keeping the say, profit pressure clients, spot would also I couple play will with names, we a to along sharing might -- ships -- is are of there

Got it.

you. thank Nik. Well, Okay. team. it Thanks, I'll Thanks, pass over.

you. Thank

Thank you.

of comes Value with with from your next line Climent question. Please Our Molins proceed question the Investor's Edge.

morning. Thank some provide behind think taking going for G&A questions. forward? we G&A, about quarter-over-quarter. Should asking million, which should you I to the range? commentary Good actually we the increase? $X on about And expect it significantly Could start increased you to million would the drivers my $X by return how

Well, our one if the historically, the lowest at G&A, look you is it, of industry. in

up issues the this control think because has state-of-the-art year, against a I I organizing that it of all cyberattacks, having gone the huge a think our room. about Paul organization discussed of part new

So, yes, will very the I forward. think to investment short this we back after significant initial, is, going where protection going were be we

regarding you and forward? Or the Thanks for to $X.XX How distribution. to plan And use about special the what's compliment color. Do should going strategy? the distributions you overall maintain dividends the special we the declared dividend think regular the dividend, them?

We'll June. Yeah, something -- June like the in And strategy. pay are be good we December have now occasions and earnings, steady this always topping will that up. we our We'll been pay in when has dividends. very

Saroglou dividend has this look, we thick we doing George think, slide and you been for money, -- we've maintained that thin. shows important I still little a it's if shareholders So Even very -- that done this made because our through at very that this policy, stability. to and -- have times been has Mr.

me. from And final sense. question Makes

ATM, Is to are sense your appetite at. a of the significant which given any there renew trading not shares potentially the repurchase lot discount makes shares? did You

We will.

on the to As top of I it -- it it we release. think list. is the And press refer into we not our refer

perpetual fleet million and reduce issues outstanding. debt, of our have the know, we our increase after And we won But main to And only consider. to XX% priority of is Our priority The that, shares that. reduce. replace our to close and management then you is, to family of another the XX course, dividend. preferreds Tsakos as to the might course,

than shareholders by we not shareholders more liquidity. So, rather We dividends feel to comfortable paying reduce us. rewarding to do leave much want

all That's my Thank sense. you for Makes from me. taking questions.

you. Thank

floor you. comments. Ladies I'll Tsakos back concludes Dr. final for our and session. Thank question-and-answer the gentlemen, that turn any to

pleasure It Well, is been we're our period. thank announcing profit always a you much. maintain and record and forward results. It has to enhance very another looking

happy maintaining I didn't lot. also a control positive was very also a when Many times only to on a and this that our think but is soar. do we talk not it important. we to forget because bites people say CFO, that mentioned income, about we things Paul that good the expenses, expenses it, I in our them turn are have market,

that So, from good think us. sign is also I a

aim are I go share a get to has now, think, where there today. it it I to our -- be. to our we And long are to We is think price levels from the should way

the not following next term. quarter-minded at things we're looking We're surprise -- on not will the will happy for quarter We and then more just so company, one. one them we longer not do things to make investors

thank support. your want to And we for you

we York in in London will the we the and date, doings presentation that of be Stock XX a for October Bornozis company's will of Exchange later next the in years month As since -- we in also on course, New we Nicolas have said, back week will back of the entered our Oslo And and actually in celebrating Europe. XXXX. actual having

So, thank share. appreciate our few much and forward value looking of you of to the meet a help and you you very

Thank concludes call. today's conference you. This

You participation. your time. may you disconnect Thank your lines at for this