Tsakos Energy Navigation Limited(TEN) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the nine months of 2025, the company generated $577 million in gross revenues and an operating income of $171 million, which included $12.5 million of capital gains from the sale of four older vessels [23][28] - The net income for the first nine months of 2025 was $103 million, translating to $2.75 in earnings per share [28] - The adjusted EBITDA for the nine months was approximately $290 million, with cash at hand at the end of September 2025 standing at $264 million [28] Business Line Data and Key Metrics Changes - The fleet utilization increased from 92.2% to 96.2% during the nine months of 2025 [24] - The fleet time charter equivalent rate for the first nine months of 2025 settled at $30,703 [24] - In the third quarter of 2025, the fleet generated $186 million of gross revenues and $60.5 million in operating income, including $9 million of capital gains from the sale of three older vessels [29] Market Data and Key Metrics Changes - The company reported a significant increase in demand for vessels, with a 20% increase in profit-sharing arrangements compared to previous periods [37] - The tanker market has remained healthy, with energy majors approaching the company for time charter business [12] Company Strategy and Development Direction - The company is focusing on a record 20 vessel new building program with deliveries starting in Q1 2026 until Q4 2028, which includes three VLCCs [6][7] - The strategy includes selling older tonnage to maintain a young and modern fleet, having sold 17 vessels with an average age of 17.3 years [19] - The company aims to transition its fleet to greener and dual-fuel vessels, being one of the largest owners of dual-fuel LNG powered Aframax tankers [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the market has improved significantly, with spot market rates being over 50% higher than in September [9] - The geopolitical environment has created nervousness in the market, which the company is positioned to take advantage of through its chartering strategy [35] - The company anticipates continued strong performance in the upcoming quarters due to high demand for its vessels [10] Other Important Information - The company declared an additional $1 per share dividend, to be paid in two tranches, reflecting a total dividend of $1.60 per share for the year, representing an attractive yield of over 4% [7] - The fair market value of the operating fleet is approximately $4 billion against $1.9 billion in debt, with a net debt to capital ratio around 47% [19] Q&A Session Summary Question: Clarification on the employment terms for the 12 VLCCs - Management indicated a significant increase in profit-sharing arrangements and a strong appetite for vessels in the market [37][38] Question: Plans for the Maria Energy vessel - The vessel is fixed back to a long-term contract with no downtime expected between contracts [39] Question: Expectations for MR new builds delivering in early 2026 - Management is contemplating long-term contracts for the new builds, with significant interest from major oil companies [40][41] Question: Asset sales and fleet renewal strategy - The company is negotiating the sale of five first-generation vessels, expecting to release close to $250 million of net cash for the new building program [47]