SOURCE: Tsakos Energy Navigation

Tsakos Energy Navigation

May 25, 2012 08:00 ET

Tsakos Energy Navigation Reports Financial Results for the First Quarter of 2012

50% Income Improvement From Q4 2011, Net of Impairments; Quarterly Dividend of $0.15 per Share Paid Today, May 25, 2012; Active Fleet Utilization of 97%

ATHENS, GREECE--(Marketwire - May 25, 2012) - Tsakos Energy Navigation Limited (TEN) (NYSE: TNP)

FIRST QUARTER AND RECENT HIGHLIGHTS

  • Voyage revenues of $102.2 million
  • 45 out of 48 vessels with positive EBITDA
  • EBITDA totals $26.2 million
  • $1.0 million in operating income
  • Net loss of $8.8 million (attributable largely to LNG special survey and two VLCCs)
  • Strong liquidity maintained of $193 million as at end of quarter
  • Further $63m added in equity offering of April 18, 2012
  • Commencement of new accretive four-year charter for LNG Neo-Energy
  • Total of five new charters since January 2012 with future minimum gross revenues of $172 million over their respective fixtures spanning from one to five years
  • Active fleet utilization of 97%
  • Quarterly dividend of $0.15 per share, paid February 14, 2012, and a further quarterly dividend of $0.15 per share paid today
  • Order of new tri-fuel 162,000 m3 LNG carrier
  • Options for further LNG carrier and two conventional suezmaxes

Tsakos Energy Navigation Limited (TEN) (NYSE: TNP) (the "Company") today reported results (unaudited) for the first quarter ended March 31, 2012.

Revenues, net of commissions and voyage expenses amounted to $66.2 million in the first quarter of 2012, a 7% improvement over the fourth quarter of 2011. TEN operated an average of 48.0 vessels in the first quarter of 2012. However, this includes one vessel, the VLCC La Prudencia, which was not operating during the quarter in anticipation of a sale or conversion and the VLCC, La Madrina which is held for sale but performed operations. Excluding La Prudencia, the fleet utilization was 96.7%, a high level of productivity given the continued state of the market.

The average daily time charter equivalent (TCE) rate (voyage revenue less voyage expenses) was $17,129, which was an improvement of about 9.0% over the fourth quarter of 2011 due primarily to regional spikes in aframax freight rates and some increase in product carrier rates. However, these spikes were offset partially by bunker prices which were 10% higher than the average prices of 2011. A part of these costs, however, was recovered through our bunker hedges, which are included in finance costs.

All the vessels generated positive EBITDA in the first quarter of 2012 with the exception of the LNG carrier which was in dry dock and the two VLCCs which are held for sale. In total EBITDA amounted to $26.2 million in the first quarter of 2012.

Total operating expenses amounted to $35.5 million in the first quarter of 2012. This was higher than normal due almost entirely to dry-dockings in which additional non-deferrable expenditure was incurred, particularly with regards to the LNG carrier Neo Energy where special attention was given to the vessel prior to commencement of its new four-year charter at a very accretive rate. It is expected that from the second quarter of 2012, operating expenses will return to levels more comparable to the 2011 average expenditure level, aided by fewer dry-dockings and a strengthening of the US dollar against the Euro.

General and administrative expenses in the first quarter of 2012 were reduced to $0.8 million, due to savings in investor relations, promotional activities and office and sundry expenses.

Interest and finance costs were kept down to $10.3 million primarily due to positive valuation movements on interest rate and bunker swaps. Interest paid on interest rate swaps again amounted to approximately $7.7 million.

The first quarter of 2012 ended with a net loss of $8.8 million which, excluding the year-end impairment charges, was an improvement of about 50% over the fourth quarter result mainly due to better than expected market rates. The first quarter 2012 loss is attributable to a number of factors, apart from the general state of the freight market, including high bunker costs, high interest rate swap costs, exceptional dry-dock repair costs on five vessels, and continued losses on the two older VLCCs which are held for sale (albeit at a much reduced level). In the second quarter of 2012, we are seeing some improvement in the suezmax and VLCC rates, which should allow the VLCC La Madrina to cover much of its costs prior to its sale. Bunker costs have fallen slightly which should have some positive impact and there are only three vessels undergoing dry-dock in the second quarter of 2012. Seven of the interest rate swaps will expire in the latter part of the year providing some relief in 2013, although it remains our intention to hedge against interest rate volatility at more attractive levels.

Total cash and liquid investments amounted to $193 million at the end of the first quarter 2012, an increase of $9 million over the year-end balances. Total indebtedness remained at approximately the same level as of December 31, 2011. Finance (including pre-delivery) has been arranged for the first of the two suezmax DP2 shuttle tankers to be delivered in early 2013 and similar terms are nearing completion for the second shuttle tanker. We concluded a successful follow-on equity offering on April 18, 2012, and raised net proceeds of $62.7 million on the sale of ten million common shares. Offering proceeds will primarily be utilized for the initial installments of two LNG carriers, one of which we have already ordered. We have an option for the second which we expect to exercise in September 2012.

Subsequent Events
On April 18, 2012, the Company concluded a follow-on public equity offering that raised, net of underwriting discount, $62.7 million on the issuance of 10 million common shares. The proceeds from the equity offering will be used primarily to fund growth initiatives, primarily in the LNG sector.

On April 17, 2012, the Company declared a quarterly dividend of $0.15 per share which will be paid today May 25, 2012 to shareholders of record May 21, 2012. TEN has paid a dividend every year since its listing on the New York Stock Exchange in March 2002. Since then, TEN has distributed a total of $9.375 per share in dividends against a listing price at that time of $7.50 per share, accounting for the 2-1 share split of November 14, 2007.

On April 12, 2012, the Company announced three and five year charters for two of its modern handysize product tankers to a major end-user. The contracts are expected to generate minimum gross revenues of $42 million over the duration of their respective contracts.

Strategy & Outlook
In this challenging environment, TEN remained committed to its stated policy of balanced and flexible fleet employment which translated into high fleet utilization rates, operating efficiencies, cost containments and selective growth. The Company remains focused on its LNG presence with the placement of a one-plus-one newbuilding order while maintaining an interest in value opportunities as may surface in the conventional tankers market for modern tonnage. Further to that, management is exploring ways to enhance its presence in the developing shuttle tankers markets in order to solidify its involvement through the two shuttle tanker newbuildings with delivery in Q1 and Q2 2013.

Management remains optimistic for the long-term prospects of the tanker industry and will continue to position the Company both in terms of assets and employment patterns to benefit from an expected recovery in freight rates.

"TEN is prepared to take advantage of low market opportunities whilst making sure to comfortably navigate through current choppy waters," stated Mr. Nikolas P. Tsakos, President & Chief Executive Officer of TEN. "In doing so, we have continued to follow our tried and tested policy of a strong balance sheet, a long-term and flexible employment as well as the concept of operating a modern and diversified fleet. Cash preservation, dividends and opportunistic acquisitions remain a core in our strategy going forward. We feel that the modernity of our fleet coupled with our involvement in LNG and shuttle tankers will make such challenging quarters a mere aberration in our Company's 19-year history," Mr. Tsakos concluded.

Conference Call
As previously announced, today, Friday, May 25, 2012 at 10:00 a.m. Eastern Time, TEN will host a conference call to review first quarter 2012 results as well as management's outlook for the business. The call, which will be hosted by TEN's senior management, may contain information beyond what is included in this press release.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote "Tsakos" to the operator.

A telephonic replay of the conference call will be available until June 1, 2012 by dialing 1 866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 90295809#

Simultaneous Slides and Audio Webcast:
There will also be a simultaneous live, and then archived, slides webcast of the conference call, available through TEN's website (www.tenn.gr). The slides webcast will also provide details related to fleet composition and deployment and other related company information. This presentation will be available on the Company's corporate website reception page at www.tenn.gr. Participants for the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

ABOUT TSAKOS ENERGY NAVIGATION
To date, TEN's pro forma fleet consists of 51 double-hull vessels of 5.5 million dwt that includes one LNG carrier and two DP2 suezmax shuttle tankers totaling 400,000 dwt. The Company has options for two conventional suezmax tankers and an additional LNG carrier to be declared no later than September, 2012, totaling 402,000 dwt. TEN's balanced fleet profile is reflected in 24 crude tankers ranging from VLCCs to aframaxes and 26 product carriers ranging from aframaxes to handysize and two LNG carriers.

TEN's employment profile (operating fleet as of May 25, 2012):
Period Employment - Fixed, fixed w/profit share & min max (31)
Pool - market related (5)
Spot - market related (12)

TEN's current newbuilding program:

  • Suezmax DP2 157,000dwt Q1 2013
  • Suezmax DP2 157,000dwt Q2 2013
  • LNG TBN 86,000dwt/162,000 m3 Tri-Fuel Q1 2015

Newbuilding Options

  • LNG TBN 86,000dwt/162,000 m3 Tri-Fuel Q4 2015
  • Suezmax S2032 158,000 DH Q2 2012
  • Suezmax S2033 158,000 DH Q1 2013

(All vessels are Double Hull)

Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and in Section 21E of the Securities Exchange Act of 1934, as amended). Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates" and variations of such words and similar expressions are intended to identify forward-looking statements. Statements contained in this press release are based upon information presently available to the Company and assumptions that the Company believes to be reasonable. The Company is not assuming any duty to update this information should those facts change or should the Company no longer believe the assumptions to be reasonable. These statements are subject to risks and uncertainties, including without limitation, general market conditions, the market for the Company's common shares, the performance of the Company's business and other risks detailed from time-to-time in the Company's filings with the Securities and Exchange Commission.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES
Selected Consolidated Financial and Other Data
(In Thousands of U.S. Dollars, except share and per share data)
Three months ended
March 31
STATEMENT OF INCOME DATA 2012 2011
Voyage revenues $ 102,230 $ 99,196
Commissions 3,669 3,356
Voyage expenses 32,312 23,533
Vessel operating expenses 35,541 31,596
Depreciation 23,684 24,235
Amortization of deferred dry-docking costs 1,057 1,108
Management fees 3,991 3,885
General and administrative expenses 832 1,139
Stock compensation expense 153 371
Foreign currency (gains)/losses (50 ) 397
Net gain on sale of vessels - (5,802 )
Total expenses 101,189 83,818
Operating income 1,041 15,378
Interest and finance costs, net (10,298 ) (6,425 )
Interest income 483 590
Other, net 18 (121 )
Total other expenses, net (9,797 ) (5,956 )
Net (loss)/income (8,756 ) 9,422
Less: Net income attributable to the noncontrolling interest (49 ) (136 )
Net (loss)/income attributable to Tsakos Energy Navigation Limited $ (8,805 ) $ 9,286
(Loss)/Earnings per share, basic $ (0.19 ) $ 0.20
(Loss)/Earnings per share, diluted $ (0.19 ) $ 0.20
Weighted average number of shares outstanding
Basic 46,208,737 46,081,487
Diluted 46,208,737 46,172,417
BALANCE SHEET DATA March 31 December 31 March 31
2012 2011 2011
Cash and cash equivalents 185,623 175,708 259,626
Current assets, including cash 297,092 287,633 337,523
Investments 1,000 1,000 1,000
Financial instruments, net of current portion - - 1,396
Advances for vessels under construction 38,012 37,636 104,925
Vessels 2,640,428 2,639,878 2,628,327
Accumulated Depreciation (469,173 ) (445,518 ) (427,677 )
Vessels' Net Book Value 2,171,255 2,194,360 2,200,650
Deferred charges, net 17,712 14,708 15,115
Total assets $ 2,525,071 $ 2,535,337 $ 2,660,609
Current portion of long-term debt 212,540 196,996 125,057
Current liabilities, including current portion of long-term debt 299,968 279,712 221,962
Long-term debt, net of current portion 1,301,833 1,318,667 1,393,170
Financial instruments, net of current portion 15,422 17,800 27,520
Total stockholders' equity 907,848 919,158 1,017,957
Total liabilities and stockholders' equity $ 2,525,071 $ 2,535,337 2,660,609
Three months ended
OTHER FINANCIAL DATA March 31
2012 2011
Net cash from operating activities $ 18,361 $ 27,718
Net cash (used in)/from investing activities $ (1,010 ) $ 6,921
Net cash used in financing activities $ (7,436 ) $ (51,650 )
TCE per ship per day $ 17,129 $ 17,964
Operating expenses per ship per day $ 8,308 $ 7,482
Vessel overhead costs per ship per day $ 1,139 $ 1,251
9,447 8,733
FLEET DATA
Average number of vessels during period 48.0 47.9
Number of vessels at end of period 48.0 47.0
Average age of fleet at end of period Years 7.3 7.0
Dwt at end of period (in thousands) 5,073 4,854
Time charter employment - fixed rate Days 1,142 799
Time charter employment - variable rate Days 1,341 1,841
Period employment (pool and coa) at market rates Days 544 720
Spot voyage employment at market rates Days 1,108 902
Total operating days 4,135 4,262
Total available days 4,368 4,311
Utilization 94.7 % 98.9 %
Utilization (excluding La Prudencia) 96.7 %
TCE represents voyage revenue less voyage expenses. Commission is not deducted.
Operating expenses per ship per day exclude the vessel bare-boat chartered out.
Vessel overhead costs include Management fees, General & Administrative expenses and Stock compensation expense.
EBITDA (earnings before interest, taxes, net gain on sale of vessels, depreciation and amortization) is a non-GAAP metric used within the financial community for evaluating and comparing the performance of companies.
The Company does not incur corporation tax.

Contact Information

  • For further information please contact:
    Company
    Tsakos Energy Navigation Ltd.
    George Saroglou
    COO
    +30210 94 07 710
    gsaroglou@tenn.gr

    Investor Relations / Media
    Capital Link, Inc.
    Nicolas Bornozis
    Paul Lampoutis
    +212 661 7566
    ten@capitallink.com