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Tsakos Energy Navigation Limited (TNP)

Participants
Nicolas Bornozis President of Capital Link, IR Advisor of Tsakos Energy Navigation
Takis Arapoglou Chairman of the Board
Nikolas Tsakos President and CEO
George Saroglou COO
Paul Durham CFO
Christopher Robertson Jefferies
Magnus Fyhr H.C. Wainwright
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 Fourth 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 George Saroglou, Chief Operating Officer of the Company. advise conference must today. being I Instructions] that is this recorded [Operator now, to floor pass And the Mr. I Bornozis, Nicolas President Tsakos of Relations Investor Advisor Capital of Navigation. Energy Link,

Nicolas Bornozis

email participants. morning Thank us of Relations Investor the released Tsakos In at morning, all you or its and fourth This to Bornozis do copy good release, you Navigation. we company very of Capital difficulty]. much, Advisor our and the I'm you Energy Link, have financial us Nicolas a case copy of today's quarter for to publicly at please will call [technical have not earnings for XXX-XXX-XXXX away. ten@capitallink.com, a right results

a access are like be the front webcast means page the email. company's urge will note will you call, to to the forward-looking that meaning live the previous I you Safe accessed call or business next website Board presentation of Takis Investors conference slide on the Safe certain on The please Harbor Private are the would presentation the would parallel Navigation. and of we www.tenn.gr. statements the that statement. also of the of this the prospects follow conference slide on pass read so be may call. the this slide and available audio Act results your TEN's affect company to the Harbor the will the by the to involve Chairman the move which presentation that and conference slides the the webcast, company's Securities contains note provision to on archived that the statements on can that copy of risks after you We slides, and send Arapoglou, the of can presentation Litigation by Energy webcast moment, of proper to forward-looking call conference operations. Please I today's of Mr. and like Also, own. on at website. to is a the of presentation at floor uncertainties, there user-controlled, button, which At slides the the Please And and note slides website Reform such time, that of within webcast on Tsakos XXXX. clicking please, This cautioned

Takis Arapoglou

today Good and Thank morning Thank TEN resilience you today. afternoon call of operating prevailed continued weak superior done allows an Nicolas. propose all. operating that historically XXXX our in you, published as for markets to inception our demonstrate to good The results far joining This dividend the we we clearly great continue our since us with throughout competition. and fashion. uninterrupted in and performance to path have confident a conviction very

not too long the early on consider we an any based the which the market is and for inflationary fundamentals. clearly as still any in the and and to is transitory strong or welcome it It situation current ways We more Ukraine, are bridge a how based in a admittedly market recovery case, industry This say permanent is more and than very generated conditions, repercussions world one. But nature. are humanitarian extent towards tanker chain event-driven in whether in to experiencing well sad war recovery the the long-awaited fundamentals. firm quite as post-pandemic by its as supply by economy both disaster affecting currently in on surging

stock rise is from through as this, positioned perfectly from by it to price. and operating you as For all benefit in its is TEN, aware, acknowledged, already, recent benefiting indeed reflected well-structured are the model, the

Tsakos. and Tsakos success And XXXX, to in and and Nikolas you, best again Nikolas once congratulations thanks over wishes again. you. continued So his for team for Thank

Nikolas Tsakos

all XXth New the to as celebrate continuous morning be Chairman, our York we the York Chairman and thank a of the where New actually City you Exchange on from And payments. had and anniversary dividend XX said, you Stock to growth, as much. good quoted of opportunity very here continuous years company

end year transportation which However, up years XXXX, similar looking a than with Russian the was had the had back post-COVID unprecedented the flourish. rates. changes, opening of started the forward worst we in of memory, tanker looking for recent in with positive year were new We makes the rate whilst we ago, And services more starting invasion. events environment that XX like feeling other February, the we February enthusiasm

how we every were started morning sure the our from vessels two the we pandemic. seafarers crew and making starting protect our by last to So years, our and

difficult and I invasion. But as break situations. the weeks, now again there over the vessels seafarers, we're from small difficult think within after a situations our protect to we the built said, faced Russian company on crew, of trying is the our - a couple TEN our have Chairman

through X/XX. So crisis able 'XX. without hurdles and Counting, pass is invasion. keep a we Russian Lehman the this inception, that of in the We But navigate - hand starting crisis is stronger. the wheel. steady the the the the followed we Then with out model course interruption, events The Paris waves. to and crisis, COVID, a to fifth is this have since come our

we vessels prepared rates when as is our every I Right spot single have XX or since are $X,XXX we our they profit-selling through out line. and to exposure arrangements, storms, speak. have $X.XX down with seafarers spot of what XXXX company the enjoying we we increased, on market what And bottom of only the this good are to we with, think good are now, do. become go have XX experiencing best

will a year. is Thank the us state, when although and you. is as vessels in dividend across us of to the the job hope the as happening, the open we'll actually, the world give enjoy, of want will part peaceful we of partly exceeding second continue, to CEO, forward. X% not feel what none with the and many to than we quick are anniversary hopefully, to expect with season, as to and replacement of open newbuilding XXth borders. the We have Saroglou meantime, an our XXXX, year a actually go have the first-time and dividend. the play to less an is very fundamentals of we additions we stop and out the navigate half their that And do. maintain shipping to year outnumbering have will our with ask of couple XXth So by But open happy world, hopefully, because what that program with that's the flourishes possible atrocities fast things confident quick I future. talk years with George And XXXX, about a the in difficulty, wrap we going if And and increased prosperous remember that, there,

George Saroglou

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

this our of with the to operating out its crises, course, time. Starting exception each X, go we of see growth war. the time we inception. of has market slides faced since four Let's targets the presentation. fifth it's Slide major intent counter-cyclical come model, And tested lows that company, XXXX, to not stronger. And that now with have In thanks

of fleet in announced managed considering major has four annual terms XXXX, fleet prepare current we tankers, aframax created, growth LNG the - concern. for currently have a newbuilding next While orders with for grow tankers the employment to we latest forma and against XX% to COVID company powered an we its the phase. dual-fuel navigated in a for as the contracts company its pandemic company's of of employment the forma In in long-term see slide, start deadweight and we current the We profile. four through pro vessels oil challenges next modern a pro have Factoring the XX tons.

a of the charter affreightments employment which have charters fixed This have vessels TEN capture the market's about and fleet fixed on the market in positioned blue well fundamentals. and spot We tanker color dark that currently upside. slide, positive while vessels in that XX time means vessels of red and light the of capture rate or blue color with water the charters, in market's exposure to trading time All the XX% time is the profit-sharing, combination are in means upside. contracts, vessels, flexible contracts

ready surveys modernity to special element repairs number bring vessels tanker these for is the year, operating have In of vessels model. forward of spot and market rates fuel forward. that key fact, rates XX invasion rebounds. the to event, Russia levels. were tragic freight our for once a has XX as brought were that Out high surveys market better environment Ukraine, scheduled we quarter in created took and spot witnessed low the to the advantage of freight last year last it already the We trade last of dislocations Fleet a of in special a

we a newbuilding sold of three history. company's with investments year, company's And in as order dual-fuel that these four our tankers. the aframax tankers LNG the as them environmental for we dual-fuel-powered last the will we enhance footprints are vessels first older such replaced During mentioned,

We Shuttle employment remaining delivery end are with also building All at the this quarter long-term for coming second are the one newbuildings DPX attached. more Tanker of of year.

fixed of is our strong. is delivery make took entered newest charters, to as five exceeds revenue the a time our sector that that bottom TEN's TENERGY. year contribution immediately January LNG The line a has also of minimum $X LNG to in We above vessel, very expected vessel charter Inclusive the backlog billion. currently

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

outstanding. had dividend common see The during of cornerstone that we overheads, irrespective and cash allocation, the based again we during shares and revenue increase cover paying we the continue another the profit-sharing year on to half continuity management. in OpEx, important to currently And preferred is year or And the chartering addition We In to levels for Slide company's down we million that dividend step-up million can XXXX, while X. to oil a - repaid billion oil debt, control paid have rates. interest. the chartering see cyclicality. reduction Despite the always the for that the per dividend and X, X.X number activity TEN of pre-pandemic TEN be flow have spot has series recover. you market for and means in must in About expenses contracts we strategy, XXX $X.XX $X.X to increase the in overall rise for at in gradual payments power have current details we is demand rates, the Exact of second Despite per see, positive $XXX of have management low the a XX during during integral paid As year, charter per return in payment capital spot to vaccination surveys the day rollouts the a vessels will York been distributed cost first Exchange XX.X% of paid for year, utilization we debt continues of expected then, company's utilization the impact - debt on demand levels exposure fleet fleet. in of rate fleet, two company's element, end. to be by Slide is special during generated year costs call. forecast, of TEN's day The EPS since quarter-after-quarter. sometime the vessels' demand in barrels listing of Columbia and X million next a sufficient June. high demand part thanks XXXX. loan the last the announced low base. pre-pandemic of Slide cost $X,XXX XXXX. peaked quarter achieved have X, based share the continuous Shipmanagement of dividend from the also Debt to December earnings to of an we was OpEx by be barrels the headwinds, will repurchased as global We by efforts of the Tsakos in average oil $X.XX million the will Stock mobility 'XX every New levels. Since current last and to the company's annual as an result in oil demand a purchasing highlight latest which maintain shareholders the had economic keeping time

OPEC+ global discipline. the front, On producers to continue with supply manage supply

and been are not have quotas stocks million is countries Some barrels year their XXXX. average. rise fall continue oil monthly to Non-OPEC set Global underproducing. XXX production meet to five the to and able now in below

big from release States had member As of tankers has strategic been X.X% and on or time, The the approximately at At XXX the over XXX a or effort lowest in it are in next the total second war is million stands to coordinated Ukraine, XX the same barrels United result petroleum the countries OECD XXX order the we of currently of a excess fleet at XX% Almost supply XX. Slide in in energy tankers part a years. years. prices six markets. the lower book next tankers the has to years. demand forecast created look the With the in are recovering, energy for of an war of XX X. three tankers. XX counter-balance in Slide and oil X% effort effect over let around X,XXX fleet the the fleet for over the months years, the us of reserves over of

market. continue XX highest ton the the activity high year, and prices to more With remain factor XX deadweight we've ended of fuels years million with almost expect above the fleet with of one years, as seen records supply for going was - an scrapping act forward. XXXX very from global Scrap and shows, and the scrapping slide at half next second we tons XX since from high for scrapping regulations be removed. deadweight balancing of Last coming, a fleet alternative of removed environmental to the acceleration million levels. X.X% discussions As

the squeeze tankers levels. Recent these So summarize, state boycotted market creating below from stocks in production sanctions be cargoes towards at demand Russian the followed pre-COVID increase the oil continues. suezmax the to Oil increases that global five majors set XXXX, the increasing production in OPEC. traders time oil by the and events geopolitical and Non-OPEC aframax numbers oil the held excluded recovery supply oil is the we've seen vessels, and year the as and large Ukraine of when to monthly levels are bringing to a for to privately more oil sectors. in demand, is and supply, market

As increased rates historical reaching big book phase-outs levels. market. fleet for you to we supply expected next capture is order part activity age fleet of XX a a if of Order recovery of XX to of across are the book firm, the seeing low tighter we the supply at pointing fleet, generally tankers at well which is tanker modern have the the to tankers, look current months. board. A is TEN, And to the positioned ratio

We continue reduce debt. to

be ask balance sheet, allow banking strong the I that And to strong of and quarter a to through with the the will financial company of year. have fourth advantage We relationships walk take opportunities presented. Paul the the you that that, Paul? will highlights

Paul Durham

hear Paul. is this Can Hi, you me?

Nikolas Tsakos

ahead. can Paul, Go we hear Yes, you.

Paul Durham

on concluded, from that charges Well, vessel of is a TCE revenue. more continue incurred several our fortune incurring Okay. in a in impairment had in to X% This I'll There quarter management also contributed of But quarter million, that including are based to reflect lost values. increase But amount. totaled projections, four market its tanker four, significant higher where in George. flow aspects a change non-cash benefit. their positive values TEN market, also despite excellent the by to charges fair seven accurately These we condition. current cash charges, these vessels the $XX.X will oldest and

the we in there dipped a reaching almost three of previous impairments, from be with $X.X gathering quarter a million. In can a over in each line $XX.X following will vessel revenue modest And total actually achieved of in excluding million said, loss recent million. in reduced strongly addition, prior quarters, improving annual compared $X.X with depreciation see the in still to I've an resulted year year, although quarterly difficult that four indicating billion pace. as $XXX the henceforth, was four by charges, financials just X% market, and were much the In The the quarter revenue quarters. revenue revenue increase, employment, full the now with market

Even the despite dockings docking and dry OpEx, year excluding bunker fell cover by $X.X a increased with nearly while at and dry quarter per manageable TCE tankers total expenses $XX,XXX to prior daily six day struggled ship prices, While our by was by expenses average operating in vessels in four. soaring market operating per daily stronger G&A X% dollar, million. Vessel operating impairments. a after current keeping at $X,XXX expenses spot X%, remained helped

and at Our bunker higher daily including declined preserving $X four, as million a shuttle low interest some especially has LNG and relatively and forthcoming although year in Other the recent rates challenge and bunker a $XXX remaining recent the EBITDA remaining prior to finance stable for balance adequate year positive at in tanker to in $X,XXX costs, over vessel. managed aframax compared financing the and we hedges against fourth reduce both orders. quarter overheads by Generating per the expenses million conditions, past for helped insured remained the been about and market costs. reserves debt provide interest cash quarters quarters and given carrier the

All of our on these extra activities pressure liquidity. have put

However, by date, and we and managed strategy obligations. our thanks And flow year, managed banks, to to fully our charter our sale my this point, take-off, this helped cash we with our service prospect a levels, refinancing market time operational debt our Nikolas. cash further promising bolstered have more the to by be to to by to back Go And met reinforced successfully soon I'll sales. healthy a comments. of reserves to finish tanker at -

Nikolas Tsakos

position for for Thank future, would rosy financial giving we I Thank you, the always you Paul. very, maintain. say, us that a

on of we're go colleagues you and our to refers be in banking by think the pay very done our proud As this, very we low are I and have for going also, dividend the of time other spreads be we this we peer a our together supportive charged when market view a And of group in renegotiation, shareholders one proud higher projects, have hear way. by careful very is that any difficulties to And the banks storm, sheet of environment floor we in transactions. growth out And that accomplishing have and But very that kept last department like for sort strong to TEN open the since answer. and the I been we the for of any we with for very has part to as worst consistency - few always the treasury will to when we very the has our payment. relationships, London are grow I when this we our forward, common as that more course, balance we think spread people, thick would with have approached of ours, now way. and never questions finance, has debt help - of of Perhaps, facing in years, are in our hear of outperformed you if that the able this. we without ever associate a and with XX a the navigated company finding you thank banks go And personal big for our hopefully, has - dividend very thin. know, proud through companies appreciated accretive huge could

Operator

is Robertson the Christopher And now from Sir, your open. question [Operator first Instructions] ahead. Please Jefferies. line from comes go

Christopher Robertson

questions. our taking for thanks Gentlemen,

So and to what guess, issuances And preferreds? I the under year-to-date, about would issuance and I issuances there? the any ATM was then versus much further how ATM trigger the share what common done you the on activity from raised comment remains during ask wanted XQ. any can

Nikolas Tsakos

think of from - had see yes, has shares, the part I gone think we quarter. from of you a million fourth small common Well, report, is in about very in amount of And the with I majority the the $XX preferred. as that a it

Christopher Robertson

year-to-date during XXXX? And then any done issuances

Nikolas Tsakos

will a in it's reporting similar results. weeks which issuance we be with think our couple I of

Christopher Robertson

delivery EBITDA dual-fuel of four And contract still talk can you contribution? the kind you does XXXX of through aframax they're those, expected there? can And on in about against terms about in newbuilds XXXX? then talk duration order, of And for scheduled cadence the the delivery

Nikolas Tsakos

end I now it's when this going was important on legislation York Yes. this XXXX, I full entered years XX Stock - because XXXX be aim of that part the the but open were XXXX up accomplish mode. almost Back to of although ago we're double question then remember, the in that thank the double beginning started very have hope. we were is We Exchange for when And you of a with forward. by when we hosting we then, XX new century in a our able I the vessels. a line. to timely a at a to able at similar our you very strategy was, following if bit helped to mean, fleet. undergoing was this exercise, time came New think March Well, we we're older, wiser And the

to either So this our by of have not if majority, of all, carriers, our what to of of right technical on XXXX, our now and U.S., the is long-term the vast we of with which like going And which the future part designs together the shipyards. way mind decade, are the technology be our to that is could ethanol vessels would be working energy like seems or gas in the end course, by and environmental do it be of alternative hydrogen could fuel, committees forward.

to to a experienced by contracts year we a end five start build would have XXXX XX like and initial very and this at those it ships process look we very to completely. with that So Equinor, start predominant our as user,

XX%. on equity feet. of return cubic the we this, main returns. will new we at quality We we're as at XX% are of But looking anything is high in XX%. at mean, when I projects, look look do it target excess our doing and the on We so between a high always

Christopher Robertson

You inflation. OpEx mentioned cost controlling

Do from improving the cost where cost pressures pressures. So you so, negatively the year? aspect of story last that And was coming this throughout year, impacted see current in from are OpEx terms expenses? if COVID-related industry the

Nikolas Tsakos

because COO, ships. think months all went And Well, as the help extending in reduce to mentioned, our a difficult XXXX, were operating seafarers our would help, the like service I onboard to to spent sea they environment, very have and we George, difficult XXXX such numerous as company their we to the able starting for having onboard expenses. to

think task really included date as special to expenses Tsakos dozen many the to dislocation these also forward ships high crew. - that rates we good able of are that of have thank X% there surveys to inflation in we of like which something they have half really those change of this we ready also year. a them over very see, work And expenses in to to having I to the actually navigate even [indiscernible] is operating reducing at of the have bringing excess achieve vessels Philippines that where will least team, and were to because an by in increased, places almost you environment by the we of

So in to - were we this seafarers don't team we and the of achieving the Tsakos able reduce and expenses mind, for want us. thank we for to have technical management

an course, Going are looking inflationary of environment. we at forward,

having this I out However, at weak balances for the at us. looking euro, think least

trends. are are having the of and will paid European As you the who expenses in euro a the help majority weak And our inflationary stronger balance euro. [indiscernible] know, dollar

foresee negative for it we part least immediate not which expenses a than are at effect other an charter of the hedging first the significant will six I So months.

Operator

the Please Wainwright. from comes line question of next Fyhr the from Magnus question. ask your And H.C.

of open. line the [Operator question And Fyhr. Instructions] Your comes now the is Magnus next line from

Magnus Fyhr

team you Nick me? morning, and hear Good can Tsakos,

Nikolas Tsakos

Morning.

Magnus Fyhr

we you're Green fleet XX long-term which of that your to a go I fleet have fleet. eco-ships couple NAV? this? the some you at about assets significant assume old do from allocation defining question initiative. here it's do financing are How you before the replacement contracts curious stock a as Just dual-fueled. - standpoint, Green sounds or but new is XXXX, fully like Should it given just a below some fleet over on mean, and you vessels in how that capital have trading built the do It replacing years dual-fuel fleet, with your selling next about

Nikolas Tsakos

Well, build U.S. is the we question. I'm to for the joking, NAV. your it show time thank to you road but hope by the only

transactions it technical the and just I and because think these sounds we sitting table are It's it Green task. talking more huge ships simply. for us sounds about a doing around

least After do that navigate the end a You very growing dual-fuel dozen the getting our without way we under at with a part. first comfortable already only we say eco would the that rightly our legislative actually we fleet doing us even and environmental have And will implement And at reduce have Then tasks the it. make will of least we users lot our we be and design. even ships is the for legislation of that dozen ships that the a are friendly from it circumstances them team facing. able to half together more of by technical to committee fleets XX, hold to will placing our the to start a January much technology, of new footprint environmentally older bring and vessels, to able operating. is be fleet,

not it's come. right much ship big for so with technical So take risk, major also getting the for are the is risk financial right together but we and the is period of years companies we oil risk, to the want care the are the to what

Magnus Fyhr

with of through change you long-term companies? financing oil other the forefront you conversations have having Are these the on here the for And be to appetite seemed this. seen over last some contracts? far other Equinor as year as

Nikolas Tsakos

Yes.

offers vessels to with least I to have at American think also we're employment we for profiles. seeing seven another companies XX-year two European companies, and similar XX bring

Magnus Fyhr

very about one crude here perhaps, bit the last and the ones. aframaxes seen so question. of fourth volatile last Can end the versus and Rates you've suezmaxes little have far just you maybe Just talk first vis-à-vis March talk over what on the a about quarter, Maybe been the month. quarter?

Nikolas Tsakos

we're care taking way of we think be for the things Well, the the significant And beginning the think the first quarter, quarter. think to carriers market say, continue still XXXX, issues, secrets whole the, the the know, of are Russian of of to rate returning aframaxes for second location, impairments And a all and all of I six all months. significant today first but the the non-cash the in the a of will in you from is profit items the I these would better them, positive. I in quite middle change as even or rates, the regardless the I are an is regardless without very not product suezmaxes and Russian profit course, if crisis, and in

that and we believe months. I last rest the XX changer. our this and rest But peer and the So game of been for talking group the you of the analysts the we've could be

Magnus Fyhr

And I I to mean maybe vessels we the an improving? your try secure mean, moved time time lock a see we here, just tonnage in but still companies oil be would rates, tonnage? up higher charters out where have clients, spot but for would this some the rates have be some at there, may appetite

Nikolas Tsakos

in to large literally very There and try shape a lose first-class of to this boat a not case. [indiscernible] is almost appetite part the

couple it's I getting were we in can higher, a February January, of see to ships. offering in log level XX% it that higher, we retention deeper March even And now. a a is might they So significant at in rates higher think

some be protection. some the and We to portfolio term longer a on take to spot on have large very able

Operator

Instructions] [Operator

Nikolas Tsakos

difficulty]. week looking to questions. we and more everybody closing Well, will with enjoy [technical for our dividends next York. that, New way. period see here the I in Happy wish we hopefully us able to be Chairman and all ask peaceful is holiday from to and Takis to don't our going have want from peaceful remarks. I And remarks. give will be And I his And [indiscernible], we Arapoglou us a his closing reporting will all week would hopefully, Chairman, settled a hopefully, our returns be this of forward And higher in higher to for Easter And any ask

Takis Arapoglou

New I from productive wish you a say. luck just have road show you York. I very and have Nikolas. good Good travels in you, to Thank safe else me. and nothing bye hope

Nikolas Tsakos

much. you sir. you, Thank you. Thank very Thank

Operator

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

You disconnect. may all