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Tsakos Energy Navigation Limited (TNP)

Participants
Nicolas Bornozis President of Capital Link Investor Relations Advisor of Tsakos Energy Navigation
Efstratios Arapoglou Chairman of the Board
Nikolas Tsakos Founder, President and Chief Executive Officer
Paul Durham Chief Financial Officer
George Saroglou Chief Operating Officer
Randy Giveans Jefferies
Magnus Fyhr HC Wainwright
Call transcript
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Operator

Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the First Quarter 2021 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, be presentation will There a question-and-answer session. followed by a Instructions] you recorded [Operator advise conference must being is that today. this I floor And now Mr. to I'll the pass Nicolas Tsakos Navigation. of Relations Energy of Bornozis, Capital President Investor Advisor Link Please ahead, go sir.

Nicolas Bornozis

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

Efstratios Arapoglou

market, service all benefit Producing under and our are while our liquidity for ample operational which Tsakos today. we to Thank customers TEN chip excellence, state-of-the-art uninterrupted once renewal, dividends pay for we obligations congratulations position generation you, an protect our as is blue to quality and and Despite levels common a and results to provide ensuring fleet inception. team expect. vessels, thank you the fully deserve good and the Nicolas. today's our joining strategy conditions afternoon with Nikolas market a and market cash in continue again. of positive is it call operating present income way Continuous since in which in These markets. from morning cover Good industrial weak high line to model to a great upturn even greatly challenging high feat the

you are is increasing on and standards, high Tsakos. And to lastly, focus areas the repay maintain company with preferred you. floor outstanding I on our I'll the ESG by Nikolas And and know both pass our Thank and We continue this, shareholders. to reduce focus the governance of footprint its increased debts issues.

Nikolas Tsakos

to everybody making this than -- million a to quarter what a were And couple directions never I was of with saw. that ourselves last and Paul think think profit losses logically it charter strategy ability but the obligations comparing report our will the gives this a Whatever the is the to as think direction right have us of the and towards dollars, of are of sharing to company's because we growth. be, loss In are efforts the first from are in care all allows maintain our say, the going performance, although obligations of is the better fleet much we it working saying. quarter, are The losses all in charter operating Chairman. its say ones is right to fourth company and what significantly time we quarter way again. I you, excess quarter first been had just I on I a take that Thank XXXX, protecting what that's profit the we pleasure quarter, that our vessels have we small on with the shares time positive always from have to once

further sure I Coast the safely that on navigate personnel the of to offshore is coming think on officers United back company Saroglou Korea. to is COVID what the the are facing that west for from a every crossing over to are run vessel, and And tight been our What unprecedented lot industry. the towards Coast world a within course time, we Artemis report Mitropoulos, future. and be and immediate I now it. proud and cycle our down take we his Mr. a looking one be of talking operational what with crisis U.S. to by make I this have from two seafarers picking I its and sometime but And structural far will our stronger show challenging We ship. course the hospital. is their we're losing again time to it command and so the that and headed this head seafarer's think this of hours And COVID today his market, with change of fifth former in environmental comments We scare our will a I clients is the to Guard, answering thank the the through staff Guard make ball went is first IMO in coast a response seafarer and will without are we from a the helicopters results all of our fueling will we the eye Mr. only on -- we heads on feel bunkering, recovering the airplane of comes day-to-day our to very be Efthimios team, the down make committees lot we up say our to that helicopter but States our above are the able my way this seems of achieving who will a what sure ship of our our have I of U.S. out spend San the good and together vessel questions, I on think of of opportunity effort and and in actually not we a of as again slides our doing waters Francisco of

alone these not belong are makes this in I somewhere are in circumstances. all proud ocean us think that feel things and make these they they that and our seafarers vast

developments I think are [ph] ask all So again, to much. thank that, or XX going XXX to the questions. you we in would we going us the through more some to you will And I the doing be forward. much very of much last, I say, right with be to and Thank take to very authorities answer George approaching days back will formatting and Saroglou XX

George Saroglou

efforts Good you, light is prevailing most XXX or and leads belong off today. Thank times by lives at We we otherwise, yet. the not us Guard all but proud of of the of of very of Coast example. the due will events in of Human all Nikolas. sea the you circumstances, sea our end now crisis call seafarers make shore, joining the weather over shipping the to COVID year to at one and is for most by challenging a community their successful life and the through start I tunnel, Francisco. international unprecedented one rescuing Coast or pandemic coast the the this the like is to at U.S. see of miles paramount over navigate although this which the at importance to U.S. by for of thanking San earnings our the officers Guard staff morning call saving

while market to there virus. levels. dealing to levels year are bunker COVID Oil incidents continues discipline the The strong health making planning the see diligently sure has to is no and pre-COVID more be consider. the our a after for for plans came lockdown losses than market with has our is efforts harder once of production in personnel crew is or from areas almost add all average in that indeed levels and the than of have mission barrels, team managing thirsty global changes stocks to to during initial that operate of a have I medical fleet and remotely we levels historical technical very for without with return their expected from half made low course to restored global cuts in daily weakness levels their of in and getting of of the no deadly the price and no also disruptions for world. managed Shipmanagement, and And managed the we of historically seamlessly crew and good last upcoming for a us an the weak means a our in for supply have plus in bunker of be key tankers shore report impossible, offer has which like the advice environment the now of and XXXX; professionalism OPEC thank to our the phase regulations the main of as recovered their are would Our pleased in disruptions, even not XX operations. demand now with seen this back recovering collapse monumental during managers, in year Columbia prices personnel, and million continues + is demand to I'm that new first with and situation the major more last to aging the where more market demand and [ph] are oil positives to oil, reason next and and well-being of overall fleet. of The demand made and that and lot oil five-year to incidents last pre-pandemic and a fleet almost to big gradually the below seafarers congratulations year experts again new IT part as year experts safe all a cargos least, Tsakos keeping resilience push priority shore the now this seafarers more we to year. period XX% a of demand the in is at stressful growth been older, this But regulations but developing out now. helping restrictions by

for but we XXXX annual modern of four us tons a we to resistant XX% profile. the growth deadweight XXXX, forma in of faced company fleet built operate. employment Slide time TEN's Let which In and thanks in this X, since its vessels decades operating the stronger. four From have fleet our presentation. of out terms see current see four to the pro-forma we tankers in average In the XX X, in be an model pro crisis we that slides crisis, inception go is has to come major its Slide

vessels with special the available two both exposure positive operate blue vessels side sectors, sharing, replaced exposure company’s employment And and or tanker, the two Slide upsides. older charter new profit red fixed have thirds upside. three X, markets is contracts, positioned vessels means advantage model, to and will in with all-in building surveys long-term sale with Panamax All We fundamentals to modernity the orders build have fixed This two the in freight presents and that the rates. trading order light XX recently tanker a is the of we since once attached. the element charter the on blue that DPX in of fleet types water the vessels namely environment in builds spot well cost the for bring in increase the in categories, market color in of We and XXXX of vessel the with left scheduled capture LNG SHUTTLE market of operating took employment we key tanker the a recovery the a rebounds. coming breakeven are of we dark concluded our and while time which the slides TEN. Suezmax two have various our the XXXX time time in color specialized combinations tankers, tankers, rates, these and currently TEN low of flexible markets charters that COAs forward vessels, to capture freight number fleet tanker expect

see, you is can base low. As cost the

this the vessel terms. was sufficient the first charter revenue expenses, to alone overhead for generated again cost operating the paying During chartering quarter cost of year, expenses, the time the from in company’s contracts cover

the X, spot company’s the the of is million in day XXXX, company’s step-up to series ratio the have an December ahead growing $XXX of by which utilization exposure management of integral XX% to shares, bringing repaid allocation down have B capital C have per strategy. million we for $XXX rate control a Since $X.XX the TEN element, fleet Slide XX.X%. And outstanding. had of to of and continuous for purchasing net an series Slide is we payments. with impact on this addition the sharing to we XXXX. based that every two Today to repurchased dividend increase to maintain for EPS of chartering currently a paying Since integral debt sale very $X,XXX TCMs annual New a fleet, that a high we the through positive has debt timely purchase to the is time, highlight to OpEx rates debt, with and profit addition, rewarded of peaked part, today the X, debts and the and debt shareholders at trend We July preferred company In for despite per in achieved low dry-dockings keeping in part and transactions, on quarter-after-quarter, efforts that announced of of number the strategy $X.X while the continue TEN's and cornerstone vessels reward and quarter, in billion the paid capital spot we $X.XX also building reduction new be share Exchange dividend York forward dividend company's payments. have shareholders company’s listing will we almost TEN shareholders common thanks scheduled Stock in in rates. XXXX, overall utilization. power cost environment an

per Regarding unprecedented and measures effective of the had X.X year. for year and end depends to and oil In an were traveling the deal complete recession oil the the approximately is we course continuing how the million day, back global an fuel mainly of XXXX in countries, X% markets, million and below period oil contain demand to to since first in and losses in on going came The of figures for XXXX XXXX, COVID of day to Slide Year-end X.X X.X Full barrels expectations per mutations. X, growth the negative pandemic for almost XXXX, demand standstill XXXX. great the at recovery year virus mobility jet, found down. XXXX. the Nearly XXXX we down barrels most it. it were North in be Europe. levels its demand levels reductions are pre-COVID because year America the with demand of aviation OECD of the another reaching to of has demand grow per last as year-end the demand barrels XXXX approximately the million day, category demand in or was Most the been

For the level, Energy particularly estimates the second the rebound from addition coming OECD even China non-OECD other demand have Asia. last developing and half the of various seen of world Agency the raised International in This year from to Asia. low countries the China years, we for growth expected demand developing base and out

August discipline. of XX On cuts Almost the half million in The production global supply + from oil levels with the and decide the OPEC two OPEC supply producers barrels on continue production days been have market. next returned XXXX. meeting to will demand of front,

regulations As almost developing regulations could in of over year the down let the XX at scrapping. oil be world XX oil levels the at expected forecast are look or barrels Slide to above years inventories the and years order this in than demand, demand. lower fleet expected, the around approaching for year the year, gone, Upcoming absolute levels XXXX both in the tankers first and demand a six the number average of XX already was of years. vessels with X% expect accelerate the the year recent half the of fleet continue months grow above oil way currently developing us full vessels the three OPEC summarize, non-OPEC Higher in more scrapping growth demand lowest To in coming on grow. book done and horizon the Oil with in global to tankers, more to + recovery expected slide XXXX in years. the order with time, scrapping the book as big X% both records. and years May years, stands above almost part highlights, And supply and as supply, recovering, of production scrapped tankers. as and continues + by for push with for second increases of however, supply of coming Last over current the XXXX highest Supply for tanker production points to scrapping other the the meet fleet freight on approximately have XX next Order are of or is which same five-year tanker more is a we that go X.X% are strong sheet, at and to historical producers. to The XXXX. XXXX below OPEC exists XXX additional books environmental next demand stronger further. incremental resistant order we market the XX XX ratio to numbers operating in and statistics. X, developed catalyst rates. low And will demand scrapping next countries, built was or from the years, TEN’s positive of XX and is level a for balance model. to release months. the and recovering should oil the at crisis market the the

well half positive second modern to expected have this of developments from fleet the a to start the We are market positioned which capture year.

faring a past enjoy about future, be We allow effect and six and are always the have be to market. currently there opportunities take for lagging to a shipping presented. should bulkers there before market. can lastly, advantage shipping next the sector be strong will are positive asset sector strong tankers both strong for to If and other better going lag is guidance company the a so spillover a will of is the how balance through relationships shipping very And containers a history looking months prices rates at freight that now, banking sectors sheet; right that the

ahead days Paul? the through Paul walk ask With to us the XXXX I will better of first us, quarter expectation financials. of

Paul Durham

time loss able to surplus mentioned, $XX started positive that were still expectations Yes. still such was Thank cash difficult quarter million. expectations, contained expenses, was feared million market, quarter as charters you, one in Well, by successfully our less of was leaving revenue George cover only was able, we which George. $XXX than our despite as the $X.X loss the as all and has a with one million, have still and

fleet of the of inherited cash of half our generate While a reserve $XX.X from were our to strong on the us downturn. able market further to due the past of to challenges Much healthy meet year, million. also optimism allowing the the spot, current was

advantage to affected market also Our to by drydockings market exploit vessels advance in into four one, quarter allowing results of the were year. the low taking later a the better

benefit contrast quarter crew tighter prior of to daily X% OpEx reversal from in is due big to market. role to $X,XXX, major However, expenses in market although share as profit accruals conditions also partly play controls and strong management $X,XXX one, share we overheads. the eventual expect bunker rebound. did to one arrangements, to quarter the on was the applied ship average light due do the to the poor in will the not that dry-dock Average prior costs in to fell large much profit a a allow year $X,XXX XX% tighter $X us per conditions from rounded in market the dollar. $XX,XXX, of tanks. million in a band a fell average costs to available economies fell rates G&A relating Daily and TCE increase satisfactory and vessel expenses given despite Operating numbers, weak per

a of operating million. income of all $X.X As achieved result these positive TEN factors,

million while start to the flow. of able reserves, Since generate charters we maintain cash still vessel million continue sales compared costs rates reduced interest In decent reduced and by to to were our poor But to fell to a $XX time bunker lower quarter and addition, evaluations the debt increase million and to $XX in finance margins and $X rates EBITDA the cash one. prior million. by year, adequate due to $XX

fleet more so normality year. million during effect, about as and In having now a cash measures aim turn market debt ATM this $XX sell [ph], after we will to we the million and call renewal. repayment, to our million in returns. a $X we vessels due Panamax, million releasing million and a two tanker And fact, sold as positive sale continue we demand rebound Also, abate the more program the deal, half the believe possible plus will Plus part $XX I turn recently fundamentals, debt. Nicolas. of our back far repaying second leaseback lockdown releasing Suezmaxes to after In cash $XX Maria $X raised

Nicolas Bornozis

Paul, much to thank more forward time. very would for questions. and looking floor you results that for positive next with like open the we And any

Operator

much, very Please today Instructions] you Giveans Thank [Operator Jefferies. ahead. question Randy go sir. is from from first for Our

Randy Giveans

Howdy, gentlemen, how’s it going?

Nikolas Tsakos

Very good.

I think it’s time for you Greece to again. come down to

Randy Giveans

I agree, agree. rather sooner I Hopefully, later. than

Paul Durham

We will and vaccinated here we’re clients with all will ready and you. to our with Johnson Thank Johnson hope, hope, we mingle & friends.

Randy Giveans

Good Well, me. from there. deal. A few I’ll be questions

news most guess the I Aframax First, this new some partnering that you’re the details in story as maybe comment assets? with or you of additional provide Equinor these Equinor four on question, dual-fuel timely Can morning, for buildings. just reported

Nikolas Tsakos

Well, depends as class you know, first on TEN's model clients. with partnering

forward. other with discussing We for but the Equinor, in with step only not the process of clients are

had Our industry back the OPA We vessel. structure is changed actual change of hull XX the of biggest The in we changing. is the industry the changing. when XXs the

and are with changing process something always in our have team composition right future, accretive we expertise the environmentally transaction with now clients an out is are very we proud the there the of together the of for in friendly us, the our looking to we even vessels are with discussing mind. for more can but the clients. say, is not we think and of much details in actual ships this I There of

Randy Giveans

transactions, Okay, durations, And LNG little that’s in terms color those of segueing with of counterparties? you those can LNG counterparties, fair. charters then kinds contracts to more and a accretive rates, on give your those three

Nikolas Tsakos

two been the market LNGs. of far have the star say last, would for the energy so Well, I the quarters

So back-to-back very the lucky were thanks their new and we were employments loss any actually to of the deliver well our placed single previous their in-house from to team, very without employments able and a day. vessels to efforts we of

think figures you that high. this that the when I we're significantly LNGs, talking and good is for are So really

of the important, very very they a of was then surveys that the with also years employment, those an the a that say, budget option it I two to eight-year for vessels. period. So passing takes range on five minimum years average would of from, And up to other

Randy Giveans

Got renewal all further around looking around or you then it, taken and of XX years right, tankers at on efforts, you've guess, kind age. I sales fleet still side, have the the okay. of And XX just maybe around,

to kind plan kind of the vessels? as new those you're of these divest is So building dual-fuel

Nikolas Tsakos

so Yes, will is out good very this I mean be we ships. the quality next these phasing

and majority very think maintained think I be perhaps Japan. build where right maintaining we are companies belief we now Korea firm that we and one places have we in very our our a of in where is must I have the built like few assets, the our this of assets been And position.

building So those we are sister are looking that to replace very assets good with yards. assets

Randy Giveans

much All XQ? date rate pretty give a guess sense trying the quarter peers I and that And to XQ last complete. question, of you provide Can that is how other guidance. just XQ literally kind it. now of to to get Got for compares

Nikolas Tsakos

I quarter time I reported. was a that modest QX of quarter Well, a strategy better better is loss it fourth vessels, second has because believe to was I than to difficult help just we was elegantly be in LNG than it the Paul very a of so with which company’s quarter. And of be think our one the will significant, the quarter managed But the charters that said, going input a the think as significantly quarter. the

as as are and that's say, the think we Chairman I ahead. said, days and think So I looking can much as I better George at the

charterers lowest side since supply is the for there or looking are that strong early the The a out long-term have XXs. recent from We indication vessels. memory employment in

think the is at light appearing the the steadily. So slowly, of but end tunnel I

Randy Giveans

much. right. so it, turn Got that's it me. from you it all over. I'll Thank Well,

Nikolas Tsakos

Thank you.

Operator

Thank you.

ahead. from is go Wainwright. Magnus question HC Please next Our from Fyhr

Your is open. line

Magnus Fyhr.

good Yes, afternoon.

couple a old Just the the charter oil over months. do structure in rates the from on company last contracts securing on how trading have the with change Rates don't been the of are depressed? among tonnage? appetite a of time busy as couple much questions seen companies low. as still of for you I And taking pretty these know, tonnage I have appetite you very firms mean, contracts. But more maybe far still

Nikolas Tsakos

I States. what the as actually Well, in described you think from defense, we played say United earlier, George

lot not came this is The share. numbers. would for a are for, in, who discussion to I we appetite in stage. So are when There long-term a looking profit minimum at our is But and that for renewals decided we there. charters say, anyone companies a of low-balling are seriously go on

a consolidation. that time, quite pressure few We've seen have and It the a belief when are people X% went have to we And new are those OpEx making Frontline or market. seeing reported, are difficult of your to X,XXX good in expenses sign. X% were in of different are keep investments maintain. best our seeing pooling. of. in pools. companies way restrictions your put actually We another think we VLCCs proud like circumstances, ship, Paul lot George are believe to so discussing. of there reported that X,XXX as COVID of we on on So businesses signs We of expenses. or in in we it which reduction control that your we the run interest allows able you properly, ship mean, a a down from I I big are supporters pools mean, recently strongly mostly we only, are And is I

So on better so. we we're and clients. the that thankful our are And women to block do then to with consolidation, and able officers being are have through a I able to think negotiation ships the men our

Magnus Fyhr.

could compliant I back the well. do generate best market versus them very and going ships All the right, have going that flow recovery in very of thank well, you if cash will regulations? older you. asset with values significant ones mean, having market selling some as staying these maybe How maintained well you the regarding typically that balance know ships, and of just are these to keeping ships rebound prior the that capturing forward some questions they these And and recovers, new the

Nikolas Tsakos

do. some to in trying Well, are we Magnus, imagination transactions, we doing have what

achieve exactly leaseback that that can described in. company you something what that know, too always the is has transactions as ways some you you the of one with believed are sales So and

are vessel head three you said significant a for your forward exactly you for then trying with capture the think your upside, So if the age, years on so a or the sell you sense, you're so use in maintain nail the at that able to another premium point. hit to what premium I but

Magnus Fyhr.

for XQ? good, back dry-docking, sorry, question, you we're -- And XQ. my the we're right, more dry-dockings as almost XQ, with one your in Refresh want plans brought basically done as XQ. I'm All the what's memory, just now some far good.

what forward from can you So bring in or XQ? XQ

Nikolas Tsakos

right We're ships are XXXX the doing the in they doing bringing forward. right are another early because Thomas, that it them due Elias. We're four location the We're on at bringing the doing now time.

it's go So to summer lull we fourth the as quarter. have the I think ready better and forward use and them

the right, when say So right is I there I there. another think efficient dry-dockings four but the and ships, efficient would

Magnus Fyhr.

cash it's even my I decision, dropped then what though little with the though a guys little below level, may, a bit one And cash question, you above just comfort with I bit. if even mean, What your current bit? comfort last it's come -- do level. down It's a comfortable quite feel balance

Nikolas Tsakos

will third efforts quarter here, significantly. and out Thanks has rebounded our of it to the Chairman in the team you find the

Magnus Fyhr.

you. thank good, Very

Nikolas Tsakos

Okay, very good.

Operator

Tsakos, no are ahead. call There questions at are waiting that further go the time. Instructions] Please hand this CEO. back to I’ll [Operator Nikolas

Nikolas Tsakos

like time, I wise change, words, I last of we state Chairman double, the from ask faced as transformed in a change a that The to that company early our industry. At company before XX. of to company, in a with our structural it single, XXs four structural process a back Well, are within finish again his everybody. single a we in again, we double fully to the would years, OPA with the the company help

where at Mr. that here its was been hull reduced think and now it pollution our thank a change discussion efficient you Mitropoulos much. in safe about environmental biggest was you is time, ship; next safety, would the knocking And forward. but was the of in on it But a those and at been XX.X%. team, it's discussions team I of very shipping I'm there move the and our going a looks it with discussion step. in very who big We it about that proved the how change hull same has size The has usual are a lot an operational that thing, by was time, clients which for that having would in engine design, it is wood, and was and have and important it change I of forefront of the like the today -- since say design inception the

what think We one I for the with early of And of there be some took can find what enthusiasm, we with your it discussing with company returns that, I we discussions making hopefully the will our in the Takis. with try step. in the sit the and meantime. about with same changes good and stronger ship support highlight much will next of the environmental clients company I are process earlier that's do. in we much, same the do and over questions and clients, we the of industry them So the exactly think yes And the by and with OPA is our the the clients future the XX, around ask to XXs

Efstratios Arapoglou

benefit ready positioned All in for Well to and that it proactive market Thank TEN recovery. you, best Nikolas. the is done. management next where congratulations the has quarters the from

Nikolas Tsakos

Thank all. you you. Thank to

Operator

for the conclude everyone does joining. today. that gentlemen, call for and you, Ladies Thank

disconnect. may now You