Okeanis Eco Tankers Corp. Q1 FY2026 earnings call

• Market and Commercial Performance • Q1 2026 was a record quarter for OIT, driven by strong industry fundamentals: Venezuela's market reopening, India's crude import diversification, rapid VLCC market consolidation by the Sainik/Aponte joint venture, and unprecedented market volatility following the outbreak of war in Iran near the Strait of Hormuz. • Approximately 17% of the global VLCC fleet (22% of the compliant VLCC fleet) is currently either trapped inside the Persian Gulf or waiting ballast outside the high-risk area for Hormuz to reopen, creating massive structural supply constraint that supports elevated freight rates. • OIT has generated $256 million in cumulative commercial outperformance versus peer averages since Q4 2019, with over $25 million of outperformance in Q1 2026 alone. • One identified commercial misstep: fixing the Nisos Nicuria on a one-year time charter at $90,000 per day, which is below current spot market rates. • The Nisos Keros is currently stuck inside the Persian Gulf and earns a pre-agreed compensation rate while waiting to exit.

• Fleet and Capital Update • OIT currently operates 16 vessels (8 VLCCs, 8 Suezmaxes) with an average fleet age of 6 years; two additional newbuild Suezmaxes are under construction in South Korea for delivery in mid-2026. • The company completed three new competitive refinancing transactions, retiring all legacy high-cost financing. All outstanding loans are now priced below 2%, with a weighted average margin of 1.47%, reducing annual interest expense by over $15 million. Debt maturities are staggered through 2035, strengthening balance sheet resilience. • As of quarter-end, OIT held $176.5 million in cash, had $683 million in balance sheet debt, a book leverage ratio of 41%, and a market-adjusted net leverage ratio of just over 30%. • The board declared a $2 per share dividend, the 16th consecutive quarterly dividend, representing 88% of reported net income, the highest quarterly dividend in company history. Since the 2022 full fleet delivery, OIT has paid out 91% of reported net income as dividends, with total distributions equal to 2.5x its initial IPO market cap.

• Industry Structural Fundamentals • Pre-conflict, 14.9 million barrels per day of crude (35% of global crude ton miles) transited the Strait of Hormuz. Only 7.4 million barrels per day can be rerouted via pipelines, leaving a permanent 7.5 million barrel per day shortfall that requires additional long-haul sea tonnage regardless of the conflict outcome. • OECD commercial crude inventories are well below the 5-year average, creating underlying support for future tanker demand from inventory restocking. • While the VLCC order book stands at 27.5% of the current fleet and the Suezmax order book at 28.5%, large portions of the existing fleet are aging: 48% of the VLCC fleet will be over 15 years old and 22% over 20 years old by 2026, growing to 61% over 15 and 41% over 20 by 2030. Most aging vessels (including the majority of the sanctioned dark fleet) will be permanently retired, meaning new vessel deliveries will not offset retirements, keeping supply structurally tight for the next several years.

OIT operates two tanker segments: VLCCs and Suezmaxes. For Q1 2026, the company achieved a fleet-wide time charter equivalent (TCE) of $93,100 per vessel per day. The VLCC segment earned a TCE of $106,400 per day on spot VLCCs and $104,000 per day on all operating VLCC days, contributing approximately 56% of total fleet revenue based on fixed Q2 booking proportions. The Suezmax segment earned a TCE of $81,600 per day on all operating Suezmax days, contributing approximately 44% of total fleet revenue based on fixed Q2 booking proportions. Total company revenues for the quarter reached $132.2 million, adjusted EBITDA was $110 million, adjusted net profit was $89 million, and adjusted EPS hit $2.33. The company achieved 100% fleet utilization across both segments in Q1 2026, and outperformed peer average earnings by 28.5% for VLCCs and 20% for Suezmaxes in the quarter.

• Management confirmed that the combined earnings for H1 2026 (Q1 + Q2) will exceed the full-year earnings of any prior year in company history, and it is likely Q2 2026 standalone earnings will exceed any previous full-year annual earnings.
• As of the call, 56% of available VLCC spot days for Q2 are already fixed at an average TCE of $223,900 per day, and 60% of Suezmax spot days are fixed at an average TCE of $187,300 per day, for a fleet-wide average of ~$202,900 per day on the half of the quarter already booked. This already represents 45% outperformance over peer reported VLCC earnings and 24% outperformance on Suezmax earnings.
• Full annual G&A expense for 2026 is expected to be ~10-15% higher than 2025, with most of the increase concentrated in Q1, and Q2 and subsequent quarters returning to a more normal run rate.
• Once all refinancing transactions are completed by Q3 2026, the full $15 million annual interest expense reduction will be reflected in the bottom line.
• All three potential conflict resolution scenarios for the Strait of Hormuz (full closure, partial reopening, full reopening) result in sustained supported tanker rates, with differences only in the timing and shape of strength.

• A prolonged closure of the Strait of Hormuz could lead to eventual macro demand destruction that reduces tanker demand, offsetting current supply constraints.
• Waiting for a Hormuz reopening carries earnings risk: if reopening is delayed much longer than expected, vessels parked waiting outside will earn no revenue for extended periods, pulling down near-term quarterly results.
• Historically, strong tanker markets have led to over-ordering of new vessels that eventually creates oversupply; while management believes structural tightness will persist, this traditional risk remains a dynamic to monitor.
• Exchange rate volatility impacts G&A expenses, as a large share of G&A is denominated in euros.

Q: With one-year time charter rates now rising to ~$120,000 per day for VLCCs, will OIT pursue more longer-term coverage as part of its commercial strategy? / A: Management notes that fixing the one-year charter at $90,000 per day was a mistake given current market levels. The time charter market is not attractive at present, as a single voyage at current spot rates after a Hormuz reopening would outearn a full one-year time charter. Longer-term three-year VLCC charter rates are only estimated to be closer to $70,000 per day, which does not justify locking in long-term coverage. (198 characters)

Q: After a full reopening of the Strait of Hormuz, will Asian crude buyers continue diversifying away from Middle East crude to Atlantic supplies, and what impact would this have on Suezmax demand? / A: Management confirms that large Asian crude importers with high dependence on Persian Gulf crude will diversify purchases over the medium term to reduce geopolitical risk, adding volumes from West Africa, Brazil, and the U.S. Gulf. This trade diversification creates market inefficiencies, and Suezmax is a versatile vessel well-suited to new, less established trading patterns, so Suezmaxes will remain very strong, well-supported assets going forward. (261 characters)

Q: Will OIT maintain its current capital allocation priority of returning cash to shareholders after new vessel deliveries, or will it accelerate debt reduction? / A: OIT's capital allocation policy remains unchanged. The company is comfortable with its current leverage, which is already on the lower end of its acceptable range. It will continue distributing the vast majority of profits to shareholders, consistent with its historical track record of distributing ~91% of net income since full fleet delivery, rather than accelerating debt repayment beyond existing scheduled terms. (249 characters)

Q: What is OIT's positioning strategy for a potential Hormuz reopening: do you park vessels waiting outside for high rates, or trade elsewhere until reopening is confirmed? / A: The FFA market prices extremely strong rates for post-reopening AG voyages, and all waiting tonnage will be absorbed very quickly once reopening occurs. OIT is taking a balanced pragmatic approach: it maintains consistent exposure to the area to capture upside, but avoids the risk of parking all vessels waiting, which would push all earnings into Q3 and hurt Q2 results. OIT has multiple vessels positioned for exposure to reopening over the next three months. (304 characters)