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Tsakos Energy Navigation Limited (TNP)

Participants
Nicolas Bornozis President and Chief Executive Officer, Capital Link, Inc.
Efstratios Arapoglou Chairman of the Board
Nikolas Tsakos Founder, President and Chief Executive Officer
George Saroglou Chief Operating Officer
Paul Durham Chief Financial Officer
Randy Giveans Jefferies & Company Inc.
Call transcript
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Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the third quarter and nine months 2020 Financial Results.

We have with us, Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr. Officer company. Operating Chief Saroglou, of the George At mode. all participants a listen-only are in this time, a followed be There’ll presentation session. by a question-and-answer [Operator Instructions]. advise conference this you recorded must is today. I being that pass I And Mr. floor now, the to Navigation. of President Relations Tsakos Link Nicolas Bornozis, Capital Advisor Investor of Energy ahead, Please sir. go

Nicolas Bornozis

will Please results website Bornozis of much, Tsakos September Nicolas us slides, on to Energy XX, the the have have released morning, at ended In can call company be slides that or Capital page nine case Please today’s This that would time, Thank the Navigation. Harbor proper note company the of call, not and Safe can to months your next after that you today’s webcast participants. conference you slide controlled, all its quarter our forward-looking of we or means Relations publicly the the for button, a to and good to This such and Act The conference moment, and and presentation very website. the call live of of slides concerned of Link read user the XXXX. financial webcast the to like Energy on the please statements previous the note away. us Investor presentation do Safe move certain to company’s Private we slide Investors slides also morning contain Securities presentation ahead, which meaning clicking at slides Reform archived website the so of urge webcast, at emailed pass XXXX. the that the of like would on a to the the available earnings right there’s we will Harbor third Chairman Arapoglou, will conference e-mail the presentation affect I’m forward-looking risks own. this TEN’s Navigation. and ten@capitallink.com, on which Mr. and of parallel the the are go to release, at of the Mr. company’s of operations. results a Advisor copy At I audio conference the uncertainties, the front statements www.tenn.gr. prospects statement. on Litigation this follow of the you accessed note please sir. call access may you by within Also, be to and presentation copy on Tsakos the of and And please on call. please XXX-XXX-XXXX, webcast involve I floor are provision that Arapoglou, that business

Efstratios Arapoglou

and afternoon and reporting call Thank results. to quarter you, on Nicolas. good Good third you all. us today, our joining for morning Thank nine-month

All together this year-on-year management double preferred forward. and accretive gradual you’ve our validates offering position, while As market, our healthy again, income operating all. will our weak demonstrates you’ve new the in And maintaining Happy to my a cash results with maintaining and continue positioning value side. can attributes Thank the Nikolas and now deserves Thanksgiving obligations, more our dividend. from than all These hearing from we us recovery paying floor a that who with and market to redeeming all certainly in allow to you once so pass and by older seen, tonnage positive such congratulations. replacing Tsakos, benefit been the along. market, anticipating shareholders that I’ll comfortable issue management going recently quarterly our increase a the flexibility business, strategy alertness in off fully in

Nikolas Tsakos

you. Thank

Efstratios Arapoglou

is Nikolas, yours. floor the

Nikolas Tsakos

very very, would described as morning and years us. good on participants. release, our Chairman, in to It been, of a of for has say, basis a personal I many you, strange, the painful all Thank press

However, meantime, its TEN. able shareholders’ One the in company’s to value been and goal, step steady of taking maintain further the growth growing a we which have is business. appreciation in full the to its

barriers Chairman modernization been we first it mention, difficult significant our with third the technical and of to caused designed them four has on our last have nine goals the was Tsakos’ regardless the whole the as of to the of we team, replaced important fleet. the The ladies, of a TEN circumstances. Board, slow have the meantime, as the designed vessels, say, difficult have actually high usual, enough older of help In sold all environmentally part by As economically six influenced all quarter, them operational think, a seasonally which times. unprecedented utilization is organization, been, we going with in kind maintain able and our to quarter, bottom been high management preferred company by doing I has pandemic. able line, maintain forward achieve quarter, the very we the have accretive reduce our in our of reduce In to we much environment. debt, more normalized was and utilization, This also in the able been with most prepare And its also business a the was our to businesses. seafarers, very obligations an times, operational months,

around container in from of we’re seeing in similar parallel strength our signs business. seeing are signs the turned that since has of shipping us And the other cargo last And dry from the time very we a strong going we’re November, in to the of recovery seeing a over We seeing low the corner. segments go market very a strength, are that the very, the lag, business point recovery significant in starting sector.

an is where usually So going very, with – normalized. [indiscernible] this very which looking introduction, we are forward in business supply, the is environment

long after a time. quarter is scrapped, seen this has XXX out supply vessels scrapped the already the led growing. last in and there have within been the tankers and We to years scrapped of X% the a we have last finally very And been pain year strong significant tonnage XX scrapping. the some We lowest of the being of a also – finally older very

So prospects a maintained us cash strong this uninterrupted payout give and its having very company balance dividend sheet good The a has going position. and strong could forward.

We’re any and looking all will better to analysis available, times then ask at detailed we you going will months. Saroglou to Thank ahead. give three I And us, you. be the of answer questions. a last George of nine

George Saroglou

of call. for and the We health-related the has economic, world It and social industry of Good coaster earnings Nikolas. you, morning third XXXX and a and roller of to tanker because COVID-XX year pandemic quarter operation. joining Thank nine-month you all profitable today a the our repercussions. reported its been

with border of reduced challenges far. capacity We continue the has navigate the closures operations with Thank successfully airline experienced shipping industry The pandemic, crew so no and our to logistic significant changes. and the impact challenges to lockdowns, because God. regulatory COVID-XX of

logistics our for different with world and the performed through operations, have of arrived it We of no crew wave navigate the or safely all the the restrictions of pandemic. second changes, remain changes and has before support but disruption professionalism to all charterers wave more no XX/X. the patience, on and in vessels second tell contaminations stoppages requirements, with Herculean their crew opportunity of for and crew trade this for unprecedented in onshore take our full we one It perseverance and our how time. time thank are personnel a hard want task. and been border work, proud seafarers to during as anticipated I problems sign their blunt parts cases and the We

their will a the families We practices normalize operational hard return changes continue seafarer we and until normal to while readiness disruption changes. home without crew to the be industry has bring been work one of and priority, for fleet. lasts and efficiency back to number to to pandemic continue to the crew will safely and This

employment expected million see series is XX our four shuttle the time, that Korea that’s TEN’s which crisis shipping But newbuilding and fleet and the company one and credit presentation. delivery forma thanks this with us generate with Since In go four tankers in from pro four to an Slide current last consisting growth inception option Slide the we been employment. LNG, tonnes newbuilding year, major, two XXXX major XXXX; company, two average the an in Far XXX profile. its The a annual currently, deadweight tankers, Last years to XX% of namely with in operating week, the construction in model, minimum higher and vessels specialized come four vessel of continues come Recession to In DBX the in four modern current contracts slides average each them and minimum of design has South operate. with This we built exception. we of sectors, an tankers shuttle the of decades the of crisis; stronger East we has X, the tankers. we one forma Let program growth in oil two that crisis the with XXXX/XXXX; six the age its the crisis-resistant, for its of out faced pandemic. terms the X/XX both COVID-XX period. long-term replaced X, see to since be the XX.X vessels during aframaxes orders reported plus conventional for now to not Great have in fleet the XXXX, approximately start an in crisis: sold eco in with suezmaxes the program vessels time we of of pro five-year

charters, flexible markets on a and our secured while that markets contract in vessels have in rate capture light vessels, are and charters slide, trading We in exposure is the the Old blue and direct fixed the fleet upside. color employment trade upside. with water of in currently time have time Approximately, red combination sharing, the XX% fixed charters time color of support the blue XX contacts. the contracts, in vessels profit events of

operate. slide, the the we On next growth vessel see for various tax the we break-even

have that a you low. cost is very base As see, can we

the of number we as benefits high highlight first- TEN XXXX. market growth, the a must the We through Management, the the to to market utilization power and utilization while the by in the continued Columbia high the of fleet efforts very nine for conditions management we low In keeping general a again the cost big for fleet of witnessed like shipbuilding rate Thanks element excess fleet addition navigate to Tsakos average low a that fleet the the the further for purchasing XX% we low during profit-sharing maintain highlight year. have strong, quarter-after-quarter first when should Ship of control the pandemic. administrative OpEx enjoys. of freight are expenses, months portion the

the fall, to we to As demand the for of in has increase X, the the of when million. strategy. Every the company’s of on oil per levels. freight beat, a continues positive Slide to quarter market expect based currently current the repayment have exposure.. part by $XXX of from Since continue the and TEN the $X.XX an vessels $X,XXX lows rate that oil reduced recover from impact end integral and EPS spot second have reduction recover XXXX, number capital day allocation annual debt debt we is company’s in inventories debt

in addition, to XX.X%. have the preferred B Net September Series retiring preferred up end of debt shares Series XXX at In XXXX ratio cap million we and October July XX shares in repaid of million $XX is by C XXXX.

to purchase $X.XX paid interruption dividend and down December XX. full-year in newbuilding shareholders an be paid shareholders Since upcoming $X.X of growing stock through company XX the and sale distributed We for – for and we has shareholder the year for of Xst. the our payment New will Stock without In with shareholders. June factor add XXXX, Exchange $X.XXX almost common has common If then reward and July average addition paying is dividend billion reverse per in The York dividend distribution common XX today to split continue to share listing the debt, acquisitions, payments. dividends that X.XX. the December we company announced on timely

program buyback little share of active shares has outstanding. over an repurchased a has common its company and the addition, In X%

Recession The million per referred manage fuel. two allow day. being all the contain by XXXX world to quickly Most in first with how year to demand of down vaccines well and cash how since normal, period global and below are economic measures demand repayment, jet to the to common fourth of that developed, growth the massive debt are, grow recovery of unprecedented demand to in the the to the resurgence been will the fleet million and dividends Full and negative XXXX barrels and and the XXXX these of of in Great the of year besides distributed for social COVID-XX company’s has or effective be are three renewal, growth of it. allocation, main pillars an the late pandemic, So oil life. per demand other approved is losses for countries. they are subject pre-COVID-XX are be the Year-end XXXX, XXXX expectations the of X.X aviation It day levels in approximately found pandemic X%. X.X levels and vaccines year-end because the preferred will the demand, will order for shares buybacks a worldwide XXXX/XXXX. non-OECD barrels the return Nearly in and or approximately be oil gradual reductions will all how pillar. the are capital with of

Agency the Non-OECD Energy estimates, due the improved the to world, has in engine continue India. For expectations growth oil mainly demand raised demand. China demand and be non-OECD countries International to for

lowest December months. another the the + X at especially the oil ease in production in demand production positive August quick to over to X%, countries XX day continues October the should the almost With XXX%. over rates. the of Compliance demand global to oil and part barrels as production, the their the to grow oil Slide barrels very OPEC to next very the year, the or gradually in an book over the with There that the increases, years. The XXXX, XX million of production first for regulations probably for to at Upcoming XX OECD expected as currently vessels, per additional meeting at three at the XX% on in cuts time, X or of plans continuing back by around relax same XX vessels, look or recent for let On + XXX oil grow, + per push end the the at expected where of together increase barrels could the oil per tanker fleet, ceasefire in years growth of following above August. be XX next first demand ceasefire, stands restore years, in tankers years, X.X% of most environmental current upcoming approaching to is producers million forecast Libya With order The – supply X us prior markets exact to to and OPEC years. barrels day day this And agree are oil cuts by per or #X. from global sharp almost go a next further civil about more the high, of big with day + OPEC tankers day traffic. front, the X.X production tankers. war the fleet of quarter return in XXX XXX,XXX barrels to cuts over fleet tanker X,XXX is be OPEC from supply million and will be October produces of in XXXX. per in inventories, million

freight affected Last records. we was as years As – a and summarize, XX for XXXX strong demand for as has many the put than the But of developments. the demand market could tankers trading so The to – next standstill. shows, and one the expected. see of pickup pandemic especially year’s above unfavorable XXXX the recovery of oil of recovery in one scrapping was highest years. lower was COVID-XX currently in on continues, older with approaching XXXX both expected demand for scrapping scrapping the XX years, vessels a and regulation slide the this scrapping oil strong or To growth horizon, with more environment environmental creating speed with by related

U.S. oil, On fall supply producers. XXXX exports should with both oil continue in producers OPEC+ crude strong day, per by and note of non-OPEC U.S. the the around that at production, X to production horizon these million the barrels approximately supply. in other market despite increases destinations, ratio be Vessel including a – XX at those of is Asia. to sheet. low The implies And at TEN’s balance most for exports the historical current balanced with finally, order which levels, – fleet long-term minimum, book next to XX destined months. We

relationships will strong a and We the opportunities presented. will reserves cash a that strong sheet, allow company balance the modern that have banking to advantage fleet, be take strong of

will financial part of our Paul? and expectations conclude Paul quarter walk days the the the With of ahead, third the we you months. operational the for presentation. through nine highlights better

Paul Durham

you, George. Thank

As quarter $XX income, draw on impacted oil results $X.X three operating expected, net quarter on oil the by million.. million top of inventories and pandemic seasonal globally. lockdown, Nevertheless, were demand continuous factors, three was low and income

million million spot in operating a expenses. enough per in average utilization exceeding months, in quarter three, vessel averaged quarter the million, the operating quarter reached quarter, X% $XX $XX the a $XX three that and with for in revenue was XX% the employment XX% the generated profit to over months $XX,XXX in prior nine three the mainly TEN $XX,XXX income income months. three, $X doubled in up market, in further and vessels up While $XXX expenses share while price. $XXX again, voyage XX% and net most of nine in still nine In has to three had nearly market the achieve three, the dry months. in before market weak including quarter nine docked TCE vessels million. three quarter of two charter nine cover Daily generated million Time still in in quarter and million, months,

OPEC X%, in three more from LIBOR $X,XXX an about to due also turnaround about prior loan EBITDA daily cost over vessel outstanding quarter million, bunker $X,XXX EBITDA repayments from up costs market, from nine $X In There just the $XX three $XXX finance hedge weaker $XX OPEC totaled X% months. increased due nine-month three, debt reduced prior debt installment since quarter the net in did a just valuations million to to million, the $XX million. of average by the million, to to million Due to dollar, due four. for been offset in three. interest, extra $XX to million, Quarter since by dry dock has remained the prior about quarter increased average quarter state quarter difficult but much quarter lower Turning our while by the three. positive but fell $XX three. to falling in delivery the the $XX.X debt margins. X% down due new per suezmax., for and at three – LIBOR to prior this already amounted XX% costs Also, to mainly of million quarter increase a and total at was by

are $XX to the we to sale year down. debt which have million same of $XX earlier million the reduced decreased time $XX in tankers by year, Part this about released the by age decrease in average and the at expecting this of net cash, itself, in due fact, bringing In by total million debt year-end. was six the

our a million related recent cash to paid in our charter’s remain vessels both to stock reductions, loan finalizing two preferred tanker that an comfortable in and and the are vessels Due repayment shuttle vessels. for carrier for built, remaining We year. these process vessels have reserves. under liquidity after still million the beginning of two for three redemption sale to with in increased finance the position addition of same the At delivery competitive debt. terms. being pre-delivery a also cash year now be cash had at just the the from to cash are with paid year And we free at in we $XX levels with time, $XXX had time we the approaching have expected the our LNG In we more consideration strategy, of of a we strengthened

the several a focus back while And COVID timeframe, in reduction vaccinations, releasing Finally, normality observers assuming recovery within deliveries a and the new in to market now, we call tanker to shorter pent-up in on successful demand. return more Nikolas. confident vessel I’ll XXXX, are a give

Nikolas Tsakos

think that And With track placed have right said well of we you, as and company turbulent being world politically, fleet going to right profit-sharing by I and market Thank very on the and year in our tame the we expect health-wise. take beginning arrangements of also of XX% spot more able in over been is what normalized a the you the able most advantage of take George, significant able of market, higher state, now bit to the finds waters being part XXXX both but for Paul. to advantage forward. the a our the of the as

a the seeing month movement. significant – I product trade, the the the of have in of we are mean, seen on stronger the hardening trade in We transatlantic signs side. already last

day, which million of become from trying the of very in part that’s in basically registered a the majority And demand, and now supported it’s a in seeing past. imports with Russian crude that’s increasing And in about in highest MRs I from strongly We’re source output coming increase XXXX. of the slow has to plus seeing think its competing been strong appetite the Med barrels the very very the the we’re exports – a strong of seeing trading of and major X since world. the that And with exports. a Libya, slow LRs course, we’re production exports by signal U.S. and

are – non-existent. good. normalization more seeing than a reporting happening is trade much that and supply The signs The it back were we are ago. are we seeing So we quarter

years ordering, in to people been through I I it but sure the the on seems speaking think, now and times, order and right ago. you you, And listens someone some it asking have seen. tankers a very general have the confusion importing I reason. that [ph] my too But is always and in something technology stop and position talking for my ask not in like for tanker if supply a – actually not generation. this to in colleagues I’m propulsion lowest the many vessels I’m has for created about

speak as see in of about of we mean, years – I of So, of have age some today, eight, we in in vessels water, of being XXX are storage, normally fleet we and which them VLs XX a excess XX the XXX built.

So that’s less than Board X% on the similar VLs, and speak across situation forward. it’s we a the very as

regulations other set I with that being that than out, achieve find to as show recently the the their would IMO. are targets solutions slow the very shipowners their confusion in are show think last emission by or environmental their targets, order all stream that as of preferring rather target, week that coming rightly to

woods navigate you. us would wood Thank So the as floor able the are to you. we of I In And of any you. the like with virus out questions. knocking fared difficult general, have a the better on feeling think, and meantime, ahead time us. been we severe the are but something keeping that, Thank getting I for in Instructions] the and days have to times. as after I of way that really we being open [Operator get of I’m the possible Christmas, unless at unless close Thank successfully

Please ahead. question. go first will take our We

open. line Hello, is Randy, line your is Your open.

Q

Jefferies. you? it’s – are Randy at Giveans How Giveans

Nikolas Tsakos

very Hello, you. Thank well. Randy,

Randy Giveans

well. Doing great. Great,

on on then questions. C you of more other balance preferreds? the provide a And couple of is obviously, I to repurchase a look your plan Series Can decision So to repurchasing that continuing at cash you robust. guess also, preferreds? Do color maybe little kind

any have more You don’t really newbuildings.

discount a Any NAV. Your for common appetite to share at repurchases? is price share steep

Nikolas Tsakos

as a I than said, more think, obligation repurchase bit actually to first a our I Yes, been year. has within

perpetuals. have last hard-earned repurchase step-up the our $XXX we spent million XX the Within to months, cash two of

our So that obligation. was

Randy Giveans

Yes.

Nikolas Tsakos

we of which As back significant mentioned, it’s since we bought company, a George – is on amount. the May keep – have X%

buying. is there So

is and, buying our targets set the government also what dividend. maintaining course, have We from of

So is it priority our out priority. but expensive paper balanced is is to that a first reduce there,

this Our dividend also to is continue significant X.XX.

achievement. I we think, of yield. a years an But significant XX have I is, average almost think, now, it X.XX when dividend

today, think, to X% are we last the with payment. I closer

where So in where like that, an a I many positive. cases, to – have a a world think you environment it’s in negative have in returns, dividend

at dividend, to it. Expensive first; common be think support shares. and of second; redeemed paper has our to So I look we – common that’s course, how

Randy Giveans

Great. All prudent Yes, right. it strategy a sounds like there.

at looking I’ve differing as fleet, heard reports. Now some your

on shuttle So newbuilding you to on can you do year. the tankers? shuttle next two just that give order. exercise that additional When an one like It for not orders, And did looks placed later on LNG have looks option? you firm update then the decide tanker it like you

Nikolas Tsakos

many of and were all issues I mentioned follow as which of them do, you, Well, because of commercial, economical I’m sure, us close we before, technical as the – issues. now, right the

demand the a for quite means You newbuildings, propositions offering shipyards have for people. which are low very attractive

will at lesser gone technologically things to we choice think ships people the way So that then was believe more it take not price. have anything. going I don’t a and get we be at mean, will the that take our options advanced those forward we There I options. lost have time, are our not because going perhaps to

are say. we think, queue, as in of front I the the I

Randy Giveans

players. more multiple in we’ve of and players, market we’ve product of are kind That’s you last fair. product carrier calls the Which question, crude refined you on? from Obviously, only some both heard it. guess, And prior bullish weeks, crude heard I tankers of have Got on the tankers. some then products

the other next favor few do months? here one in of So the kind you of

Nikolas Tsakos

are segment. diversified strategy many glad First policy many we are that many, families have the of many, before. all, back that This to I and the our going has decades to we say foundings, been Energy within

do – an have in opinion are We are I the would crude. stronger. following actually we I not the not something VLCCs do we a we So client-driven. on say, on believe light

between is segments quarter But themselves. months forward. perhaps within we a So are lag move looking positive or that going both something this six

which – hope And used seen year already I earlier, is be that. less or taken that months product on some ago, carriers oil six it have production being to oil will mentioned there been stored, advantage We than is demanded movement, of have a means less the time crude storage we the will as our or There follow. be inventoried. a so less more oil

Randy Giveans

that’s yes, makes markets your the sense. me. Yes, Well, that in responses right. like Looks like All for today. it

up. it keep Happy So Thanksgiving.

Nikolas Tsakos

to you. you. Thank Same

Operator

back to further Thank no you. are you [Operator currently questions, I’ll hand sir. for Instructions] remarks. There closing

Efstratios Arapoglou

many Great but that not call. even call than thank price our shows happy. hope successful Well, the Unfortunately, – one all. And you’re once then be early this year next today. stock questions, next that more again, will you earlier we all

to like Thanksgiving happy say words. would a few to So Nikolas everyone.

Nikolas Tsakos

very out I and a not hope I has as a do year, Thank do said, next worst your you little I able early will as next of more has to have you wish Thanksgiving. very it much everybody I Chairman to about safe. to we of times. happy moving And visibility the much. and better part talk very said, exciting through But better blurry. better a and and for – Stay healthier and a not we to Thank we be that hopefully, makes mask, things support. forward. – think Well, not are And the Happy going conclusion year. strange presentation Thanksgiving a very which it this safe

Paul Durham

Bye.

Operator

conclude participating. does you conference That for today. you. our for Thank Thank

You disconnect. may all