Tsakos Energy Navigation Ltd. Q3 FY2024 earnings call

• TEN remains sustainably profitable with steady cash position, increased dividends by 50%.
• Industrial model with nearly $2 billion of forward contracted accretive revenue and operational excellence.
• Decarbonization journey with being one of the largest dual-fuel operators, having six LNG Aframax-powered vessels.
• Diversified fleet spanning crude carriers, product tankers, LNGs, and shuttle tankers.
• Fleet fair market value around $4 billion, low debt of $1.8 billion, and solid balance sheet.

For the first nine months of 2024, TEN generated gross revenues of $660 million, operating income of $236 million (including ~$49 million of capital gains), and net income of $157 million, resulting in EPS of $4.62. Adjusted EBITDA for the nine months was up $314 million. In the third quarter of 2024, gross revenues were $200 million, operating income was $57 million, and net income was $26.5 million with EPS of $0.67. The fleet utilization for the 2024 nine months was 92.2%, with a backlog of $1.8 billion. Fleet operating expenses per ship per day decreased by 3.3% from the prior year, while time charter equivalent per ship per day was $33,390.

• Believes valuation is low compared to major clients' earnings multiples, aiming to achieve fair valuation by explaining industrial model.
• Anticipates growth with close to $2 billion of new business coming in.
• Plans to continue renewing and increasing fleet with state-of-the-art vessels, with 12 newbuildings under construction.
• Dividend policy with second semi-annual common stock dividend of $0.90 on December 20, 2024, totaling $1.50 per common share for 2024.

• Market cyclicality: Need to handle market fluctuations efficiently.
• Geopolitical sanctions: Potential impact on shipping operations and market competition from grey fleet under sanctions.
• Regulatory changes: Impact on fleet operations and compliance costs.

Q: How do U.S. elections, potential tighter sanctions on Russia, Iran, and Venezuela affect TEN?

A: Sanctions can benefit first-class operators as grey fleet (older ships) undercutting market is reduced. TEN doesn't navigate in dangerous areas and works with top-tier clients.

Q: Details on newbuild program spending in third quarter and fourth quarter?

A: Approximately $21.5 million remaining for fourth quarter. For 2025, ~$100 million of equity payments expected. Spending varies by vessel pattern.

Q: On dry docking schedule, commercial off-hire in Q4, and G&A expenses?

A: Expected 3-4 vessels in dry docking in Q4, utilization to be higher. G&A increase is a one-off due to share incentive plan, expected to revert lower in Q4.