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Tsakos Energy Navigation Limited (TNP)

Participants
Takis Arapoglou Chairman of the Board
Nikolas Tsakos Founder, President and CEO
Paul Durham CFO
George Saroglou COO
Nicolas Bornozis President of Capital Link, IR Advisor of Tsakos Energy Navigation
Randy Giveans Jefferies
Magnus Fyhr H.C. Wainwright
J Mintzmyer Value Investor's Edge
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 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]. [Operator I this must that being advise today. recorded conference is you Mr. now the will I floor pass to President Navigation. Energy Bornozis, of of Relations Investor Nicolas Advisor Link, Tsakos Capital sir. go ahead, Please

Nicolas Bornozis

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

Takis Arapoglou

Holidays indicated the corner, Nothing market for recent vessels. accretive That me else to than we're MR perfectly the all recovery. state-of-the-art, around business And to capture rates. other new incremental LNG by New me that booked market Nothing fashion to the for Thank market, you, challenging Nicolas. all. Good to worst an for call we ever, extremely Thank joining out our always, you come grow as a company you now in seems environmentally-friendly and a and probably as say with wish be in positioned much other managed, improvement than the today. morning, unscathed. have Happy We difficult Year. countercyclical Happy within the and

you. So Tsakos, over to you. Nikolas Thank

Nikolas Tsakos

you. for morning of call. good Thank to and and joining afternoon good Thank Chairman, our all you, you

of friend, fault our quarter And our year. so earnings the sorry Bornozis. this for Nick It's good having third late

And This ringing the year, a -- also, not able later years, better New our better be anyway. would to say. you set we For overview of was give able than things it are Greek to New Omicron as was we from going. where in usually report to and date it's seem for the Day. XX are York thanks we But were canceled, last we I live and but bell York a ever

As quarter one was quarters memory. quarter 'XXs. worst I'm since mainly reading the third our it's in the was the there nine in almost enough recent first to the of XX months Chairman days and worst the old remember in that years. I said, the

steady However, we to a course able maintain been have them. very with

us growth are the our significantly quarter, fleet, then fourth docked vessels months, them a know a there. the prospects. earning container is the of first we be a LNG vessels resources digit as dry going coming which relationships, corner. market good the in in utilizing going of position possibly of us quarter we given out who in company have LNG And We the in is has will the which our for of reminds of of as more turns modern fleet in because which XX were dry took. an better prematurely docked long-term measures much to to are be delivered order two nine ready we as be signs the and weeks The a Our were that to end, strategy is market half good the on market when finally The to to triple us took figures.

market-related day. happy territory we're $XXX,XXX average last we a our about. are very was with charters, which their think a I And around

solid and coming a company, is of also of which course, acquisition LNG growth our charter are new shortly very the to dual our of March core the fuel XX in taking the just we're together ones are of. this of -- that be April. tankers for with proud ships we'll And after for create [ph] very advantage Our going

the product right West strong carrier very in the now. seeing market are here We

of them the now XX and spot pooling Maersk partners right and the pool which like full taking through have market. big on one-third product of with We arrangements carriers, advantage are spot our market Cargill

similar now. arrangements the target very of talk on because are vessels of the vessels. the what this, And fuel be months. half to the that course, the for time new quick XXXX, in we when years in think is with the take the George? happened this, long-term there energy, I at is Association two If true, sure. [indiscernible] for take top overview more lack nine And features contango the we February this of George with to I happened the right dual of So quarter give And will better and any chance, set us Energy very positive this, new in we of to has of not ask more started. and the much of will what will good and I ago as plan a significant outburst a starting looking more I International have that of is think we first in announces that for forward a virus our

George Saroglou

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

that of with its inception we faced Slide to company stronger. each thanks time come TEN, crises see our in go no XXXX, online slides the in is operating This have model the has to we X, out presentation. Starting Let's since four major and exception. time

concern. to fuel company and six grown through In created, Aframax we to company phase. While tankers we challenges powered LNG have the the a we to COVID Factoring newbuilding employment pandemic duel its four September, build employment of for next current pro against orders contracts the signed the prepared major pro has up oil tankers, modern the long-term four and XXXX deadweight growth in fleet considering fleet and we profile. annual forma have vessels average in for forma start the company's latest its with In Slide currently of terms we a X, XX XX% of the an tons. navigate see

freight currently or of combination expect All rates. of market in are light payments that charters 'XX. means have fact, the the market's in advantage slide, took on our And tanker results profit in expected well tankers, positive rate recovery we the of in time for the the fixed in product starting We fourth blue have capture to vessels in a shown positioned red in contracts, and recovery fundamentals TEN and of of in this the This time in spot that seen this capture quarter tankers vessels quarter exposure freight color would for we be fixed forward repairs investors the charters and market's charters surveys while bring the have to operating color special of upside. freight our and vessels, a upside. flexible water rate employment have We sharing, to is that time Fleet the is environment the with XX% to low scheduled the modality contracts market blue XX number once rebound. and fleet also model. market the these to the vessels our element available key

dual six such the in and company's footprint the for with fuel three During will of LNG of powered that the newbuilding tankers we are these our investments vessels we tankers company's year, them dual order first the history. the the concluded older fuel Aframax environmental as the replaced enhance sale

In we coming building are carrier. and attached. newbuildings Shuttle long-term one more Tanker are one with DPX six LNG All addition, employment

LNG see Our strong, market significantly we X, in our Slide currently to side various will that the vessel mid-January contribute the as our for enter newest represents and mentioned. as left is line the also breakeven LNG will On TEN. sector vessel in operate the CEO bottom we the very all-in cost has types

low you can a have base, cost see. We as

the keeping quarter-after-quarter. the to a expenses, generated company's preferred Tsakos of the have rates. sufficient dry to contracts and of the from which to the strategy. Shipmanagement, maintain for months Slide overheads, the nine fleet. annual element, XX charter outstanding. debt of the company's chartering repurchased our cost sharing power and spot management XXXX, rates, the profit we a cost we efforts also forward managers positive $X,XXX vessels Since technical purchasing utilization OpEx in we currently thanks vessel in costs and have that over part every the increase dockings During utilization the while million that cover for X, our strategy, again step-up in I'll control on peaked paying for achieved December high had company's fleet to exposure of have debt vessels loan XX% million highlight interest. Columbia the year, the during for integral by lower reduction of year, is the repaid revenue and Despite a the of expenses, allocation an operating debt scheduled in fleet two average impact chartering the And of continued the XXX capital were time Series of rates EPS XXX we for number spot cornerstone based $X.XX is of

is down cyclicality. dividend and billion in X.X irrespective to for of dividend debt, There a About the the payments distributions for paid XXXX. of market as are in team. distributed New always been Global a listing dividend oil result management TEN addition slowdown variant. have recover. important paying Omicron Exchange has Stock continues demand common new In since the York shareholders the the to

experts another essential the is million oil and affect million be in return XXX mainly per per barrels pre-pandemic will when believe X.X travel this per XXXX per demand day. barrels close is the of X.X of in by demand million effect small around to However, increase [ph] to barrels will to that will day it going air Still XXX,XXX day and and barrels levels that the prediction 'XX day.

With below global increase and near prices in release set to which prices, $XX effort tankers we over fleet, of The or tankers let in the recent oil the India, million Non-OPEC And continue the X.X% has reserves book producers the over been a the supply is XX had average. X.X% recovering, X United to Slide five-year tankers. over petroleum November. the and or at we barrels barrel stocks at to barrels trading OPEC XXX are strategic in start forecast States, than XXX per ease coordinated the most supply At are in in the China, United XX% plus XX time, energy it oil the years, for Korea, us with stands below XXX now look a term, XXXX. is the order now years. approximately are in the successful global next demand to same On front, effort Japan almost an of supply and production manage discipline was levels South XX from the total of big around million the oil part oil had years, currently as Kingdom XX years. almost lowest the of more at three

supply is that towards current the oil below phase-out Non-OPEC vessels XX tankers. strong scrapping cargoes recovery slide to levels. as age to production was are the fleet with very positioned production expected, year the record the As book scrapping million the of we and demand so in a had global demand, shows, for fleet highest at fleet monthly fleet. scrapping the ratio discussions of year deadweight $XXX seen prices historical we set fleet XX look fleet tons the high environmental supply part see also high expect summarize, deadweight ton alternative to of of levels. global A per next forward. coming, and we rise Order to and expected is supply or order a regulations Oil pre-COVID reaching and excess XXX If have the the ton, stocks pointing months. before demand year XX tankers global the With book, big years increasing with X.X% levels next the a plus. of We years, the well XXXX, at market XXXX far oil of and the balancing in market. recovery a levels five-year we was is modern continues. to August lightweight low the the lower. we of bringing activity removed time XX at for company, by remain exit capture of supply and To act is million market. over one this have to from the Last going September OPEC XX.X at The for scrapping increases oil more tighter when more of to fuels

reduce We continue debt. to

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

Paul the year. financial With months to the quarter the expectation of you the better walk days of through third and Paul? ask highlights ahead, will of I nine

Paul Durham

from everybody of the to Tsakos. office Welcome London

we indicated, conditions see are So improve. as to market beginning

$XX turning feel quarter product the and in and profitability breakeven the the charters, generate a able a of way net conditions leading market year. fleet, over were least [indiscernible] indeed represented three spot million market three point, million. Given we now, possibly up loss in $XX Despite provided million $XX possible to and mild, to further of million, new vessels market, the the time comparatively $XXX to half to be at bringing and our with revenue our resulting quarter the which the total

is rates million, $XX,XXX vessels the nearly reached periods. Daily for indicating revenue from trough. in nine-month three the nine per bottom months, further quarter again near exceeding of three reached both the average For Prospects in period, despite in over nine TCE are promising. in dock. market the $XX,XXX Fleet $XXX the future XX% sector vessel that the bouncing quarter averaged dry utilization for and

The fell quarter, only gains sheet in revenue voyages our voyage XX% these rates increased. associated to quarter however, day cost expected and and the total due extra vessels. dry were were debt partly since we add million, We quarter. expenses, two start further a due technical period, $XXX Despite expenses carrier the provide new vessels falling the our our part provided million. The $XXX,XXX to million Finance together by X% which selling each a a securing month $XX There the and net income. time program reduced interest. the repayment commitments, was includes nine balance in That CapEx resulted our the of A the nine-month to savings interest X%. also fuel in keeping covered $X reduced, costs included revenue per and by managers. to by increase are of that average million operating alone as offset revenue, $X in LNG to three expenses OpEx charters. Bunker repayments that daily is continue $X soon strengthen in vessel debt three, generated of should by and expenses the in while of as hedge over fall the some debt margins to also cost including are million generate expecting the was about to ATM on rising vessel through just to in of by part $X,XXX large the our increase, dockings

loans we terms. vessels the older the same that time, several by At I'll the up return And of be of mutually as our disposal the to debt to Aframaxes back cash now to ordered. continue addition, vessels call beneficial have such recently In of for new refinanced consider reduce at vessels, may replaced further Nikolas. we free and opportunities effectively

Nikolas Tsakos

you you forward safe you I input. any in for looking very that, Paul, you, the I'm London. here. to And Thank you family With to Thank are your would and see like much. keep open for questions. I hope thank your and safe and floor

Operator

Thank you.

begin Instructions]. will question-and-answer the We [Operator session. now

ahead. take question. our now will Please We first go

Your now line is open.

Randy Giveans

Randy gentlemen. Giveans It’s Howdy, from Jefferies.

Nikolas Tsakos

Hi, Randy.

Randy Giveans

Randy Giveans from going? Howdy, gentlemen. It’s Jefferies. it How's

Nikolas Tsakos

Randy. thank you, well, Really

Randy Giveans

Great. I got two questions.

First, put And duration those away the near on can the the discuss What of time is terms those kind to time the rate? further you are of in then charters? of expectation and term? XX tonnage charters locked decision vessels

Nikolas Tsakos

will industrial give call, a have private we you very, very want we will I nice and a I Well, think then espionage. because don't overview

always long-term growing and that's are are the relatively company. you company we weathering know, As relation unscratched why and we a

and of breakeven if we our two with that are the So charted based covers all-in George's breakeven costs a -- on minimum, those to portrayed the our sharing largest George back go VLCCs we had VLCCs them and two you which vessels arrangements ships. profit out --

on the this and the a than in market index. more us that the upside significant a XX-XX based even range, see, you $XX,XXX around that then allows If of split is

-- ships we've we, more owners, any We do waiting for having think approached like than But very time it were of course, like ours, had so. the of been rates that for ships the last right a to the I they make to decision those sense charter that approached most been offering. of the didn't years. been has were

way think I average are Now breakeven upside. above and have we an we

four So similar breakeven. see to they're situations I with very has do you Again, can think that Aframaxes.

So that's always our our more. a recover breakevens goal, little bit

as XX-XX were then those. minimum, Aframaxes closer a to think on and I upside XX a

that this and of open keeps think growth day-to-day business is shop I company. helps the So the the

the of that very stopped quarter happy we own quarter. in -- So finished third of down one historically But actually around. the our lowest the transactions of was on so. the not we're of the do some quarters -- to And quarter done that things the fourth was turned which the had we we've tankers third the quarter, time fourth history

Randy Giveans

secondly Got million the in XX XX.X the so And quarter million it, I another okay. on new the believe. ATM, I quarter, you fourth or guess then issued shares third in

On million remaining you XX authorization. last call, the in had

just how So authorization? remaining is and curious million came the that XX about what current

Nikolas Tsakos

meeting, was to I years. Board XXX program us When November, million about in to program. another which through top up XX we go XXX last the our had million ATM this of took authorized It

but you growing it's company I with am always keep opportunities someone the not know solid spending, So we're are very balances. and we that likes as that cash to

Randy Giveans

authorization? much remaining how current is your And

Nikolas Tsakos

I about think XX million.

Randy Giveans

your discount And trading I conceptually guess right. to then a at shares All NAV. steep are here,

double a have least purchase diluted issuing yet We some you're vessels. NAV, to at but shares digit

So is that? why

Nikolas Tsakos

are very which, around Well, as XX, well you of XX. not preferreds we issuing -- combination know, at trading are preferred, a are totally we

ships changed seeing trading preferreds dollar the part because the So very prospects a times, very, right very very we of to a there had too, par. And to exciting be shares a growth to we are at now, because at which similar combination single that we number big good we from that issuing then dollars. our very, try in believe are of some to are double but -- our in of industry make

turning to into dual So we even start our had fuel or ammonia. or fleet hydrogen

be to So go. to we have liquid ready and

since said. a and a as business. XX% We We've been are this inception, business, is growing George growing

Randy Giveans

some have from fourth increased items one-off guess fallen or I new that quarter? then expect OpEx, is here in And the to that rate, the seemed Okay. just Is there the XQ. have to you lastly to XQ run on it

Nikolas Tsakos

you start if with have Well, you as basketball, defense. you you bad, things know, lot guys of we when start are watch to -- a

last inside had We ports two the can navigate more there's a George indirect budget or wait this the on still -- peer thing, than to And managers $XX first back the market we been. costs. XX from the at XX%. our can weeks change huge the utilization conditions. of [indiscernible] in floor, had TEN the possible ever, you to for very it's million we go because in was results down time all burdens. and just what we there everything here, for come for second building to difficult our same which been wait at much repairs. group expensive That's crew not defensive. in to expenses in I'm So to to if had this teams the as Chinese a years, losing outside many when to. where very ships also direct making currently COVID-related the do we before technical of current is But our with can more But beauty compared they need We the has for in lowest go we very running high, be do environment we stop And as are done which you've within so one glad

it a I been tough think but it's patch, has well. So team very navigated the

Randy Giveans

it Christmas. that’s Merry for me. Got Well, it. All right.

Nikolas Tsakos

Thank you. you. Same to

Operator

Thank you.

We question. ahead. will Please next take now our go

open. line is Your now

Magnus Fyhr

and Good with team. H.C. afternoon, Magnus Wainwright. Fyhr Nik This is

couple a to starting spot quarter. -- rates with questions back fourth on Just comments your going of in the the here,

history. in get give some what magnitude? can -- expect? XQ, of they're You up at to probably we trying least kind us in XQ should just significantly or Are they you XX% of was lowest XQ than mentioned I'm that But kind higher whereas the

Nikolas Tsakos

fleet, works [indiscernible] from will more LNGs, XXX% a I'll say the the I quarter to XX in say taking we many give betterment a MRs think fivefold the it, than for be LNG, too structured of to then, had is would of it a effect which on Aframaxes. works, pricing it's I I I our of would on rest they XX% we of which figure, want a I fourth of way know the betterment XX% do the we betterment if But the market it's that have the today. of course, into directly the least on LNGs, $XXX,XXX, XX% -- excess and of between earning our speak first the of you. advantage the fivefold the where manner, average. think half quarter, without at of them because I the we put the I pricing a retrospective get bore have not way if the the as you older for QX market say in XX% would because And details infusion here,

Magnus Fyhr

the kind Okay, fixed like the products very seems Do strategy of quarter. or good. are on And you you forward, this picking kind going have a given secured time versus covering on are have XX-XX still focused profit sharing? or your of you the and of a period in couple costs different products then that up the charters

Nikolas Tsakos

and -- and we us On as the like participants utilization Maersk Cargill. then in important very with values a is very strategic name good you for [indiscernible] products, are know

utilization full have we do, we what which our fleet product is important. of very So

are we we and never the get upside offside So of market. the

that's full with of our modern we're and supportive doing think I I what ships. So am

Magnus Fyhr

appetite you see as change side the more market? more a here more you as have with then the do charters, progress? into appetite to the as from there's but of a charters the appetite seem your time the charters, for couple what's You And think secure for Okay. like able you coming been from far

Nikolas Tsakos

the we Suezmaxes. on we the on appetite appetite showed VLs, Aframaxes and a appetite big seeing We now showed are for

Magnus Fyhr

good. right, All very

question one Just perhaps. for Paul more

and that any on and of the end the mentioned amount how by many share you both Can preferreds. of preferreds on you -- XQ what's in the equity sense the the a You third outstanding you give also ATM the did issued quarter? us

Nikolas Tsakos

that. George, please answer

George Saroglou

press; over I preferreds all Series, think Then XX F. little we D, have and the [indiscernible]. million three E a

Magnus Fyhr

Okay. And QX? that’s of as

Nikolas Tsakos

now. right That's

Magnus Fyhr

Holidays very it for Okay, see -- All me. That’s good. you Happy right. and we’ll

Nikolas Tsakos

And to stay Same the down you. from you. away there. Thank tornadoes

Magnus Fyhr

Okay.

Nikolas Tsakos

Stay safe.

Operator

Thank you.

now will question. Please our take ahead. go We next

is open. Your line now

J Mintzmyer

J Good a I here. Mintzmyer the Edge. while, but congrats Hi. on haven't Investor's gentlemen. talked Value afternoon, It's you from to in quarter

the joined call a wanted details on on gentleman ATM. asking I to little I I last So that. late just get about heard the the and some

You mentioned price? XX.X I'm third the sale the million split and like and share average the XX.X in dollars quarter, in between amount the the curious each million much thereafter. how common about also preferred,

Nikolas Tsakos

price. XX -- the can -- have said, will actual figures And remaining the period. you the Paul year common dates George Well, -- need you as if on it’s this million George please the of I we the the for latter on preferred. the The is call think have give to of more

J Mintzmyer

something planning details you on or a file to that? Form more like with X-K Are Okay. financial

Nikolas Tsakos

We filed I Of the course. early and in year. going think our X-K, file be it's always to

J Mintzmyer

included is those. My And Shuttle one Has two options? understanding contract the Excellent. any on have been there the Tanker? then you original those options newbuilding decision for

Nikolas Tsakos

correct. very you're Naturally,

memory. a good is there [ph]. discussing. is had Porto very -- took now, a first [indiscernible], But option, a one we And we're are second the the an third currently which Then We have couple which building we we now which the the this ago. building had You we're of we took option. years over option

prices, value has However, ships didn't least increased. steel newbuilding of our skyrocketed. as of we and our you is -- the existing at this and new The has the building something the mention, XX% it of fleet price -- understand, is now price right

two three done we've out of So the options.

J Mintzmyer

they're significantly options on those. because imagine I Yes, on those was I curious the in money

Nikolas Tsakos

-- it [indiscernible]. took called the we We first vessel,

very part newbuilding the is will delivered in in our will of which -- second department second long-term The delivered be contract the which the or June as against as July option, Brazil. Porto be

J Mintzmyer

Yes. timeline ship? you option? for that what that on and lead third What's do it the be the would How time building exercise long have to

Nikolas Tsakos

have might a this contract, it. We're of currently news negotiating [ph] are for We the which very year. we long believe negotiating I side

J Mintzmyer

that company. kind time. on I of been forward Look, then a specific public general, will to And look just question Tsakos the long very has last news. for

a a towards You late. a management. been very There's late. long trend It's have recent months a storied impressive fleet, two half reporting and extremely

Nikolas Tsakos

the You say I I had I the was wouldn't that Bornozis missed And our able for the do been but the because we with as we last I to delays not know said Link, true Nick base again majority reason to with that do it’s my of United to you joking, because introduction, it two shareholder is. Capital travel have but the States, -- events apologized. which

were of on we going the XXth was today. December, and report opportunity So a of we bell ringing were yesterday, day typical the the taking to

So -- then road a to into Christmas the spirit everybody would show. gets do before we spend

all this that. of the apart because However, fell of because date our was Omicron. set But of

the So to going I we're to normal can March, think be as we go again. back within timeframe. back Hopefully, travel from we

J Mintzmyer

XX the All look that forward your still Very Do it's last common right. think you appreciate Is a time number? I current I shares? to current million. results. today. have for again earlier question, I

Nikolas Tsakos

just right. shy It's Yes. That's of XX million.

J Mintzmyer

you, okay, today, of your Thank gentlemen, excellent. time. for As

Nikolas Tsakos

best for the guys. the you, All holidays. Thank

Paul Durham

Thank you very London. much from

Operator

time. Please no have this questions further continue. We at

Nikolas Tsakos

the wish Holidays. of you news Thank to New new we Happy stay can better you and all very very holidays, a in early Christmas, Year we Merry and safe hopefully much. year Happy And you. report

Operator

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

You may all disconnect.