Tsakos Energy Navigation Ltd. Q4 FY2024 earnings call

• The company achieved a record 21-vessel expansion, resulting in a fleet pro forma of 82 vessels and $4 billion of contracted fixed revenues. - A milestone 9 DP2 shuttle tanker deal worth $1.3 billion with Transpetro was announced, solidifying TEN's position in the shuttle tanker business. - The company divested older vessels to generate cash and maintain a young fleet. - Acquired and delivered modern dual-fuel vessels, making TEN one of the largest dual-fuel vessel operators. - Maintained a countercyclical approach to fleet growth, raising equity at market lows to fund growth projects. - Continues to have 32 years of continuous dividend payments, with a $0.60 common stock dividend planned for July 2025.

In 2024, Tsakos Energy Navigation generated $804 million in gross revenues and $279 million in operating income, with net income at $176 million ($5.03 per common share). The fleet averaged 62 vessels, with fleet utilization for the year settling at 92.5% (down from 96.3% in 2023). Secured revenue contracts were 82% in 2024 compared to 77% in 2023. For the fourth quarter of 2024, gross revenues were $188 million, operating income $42 million, and net income was up $19.3 million with EPS of $0.42. Fleet operating expenses for the fourth quarter were $51 million, with operating expenses per ship per day marginally lower than the prior year, and TCE per ship per day at $30,107.

• TEN will pay a common stock dividend of $0.60 in July 2025, identical to the level paid in July 2024. - The company is undergoing its largest growth phase with 21 vessels on order, including 9 DP2 shuttle tankers on 50-year contracts with Petrobras, doubling the minimum revenue backlog from $2 billion to $4 billion. - Anticipates continued growth and profitability driven by secured revenue contracts and fleet expansion.

• Market cyclicality: The tanker market can be subject to fluctuations, impacting revenues and profitability. - Geopolitical events: Issues like the Houthis attacking shipping routes can affect operations and rates. - Crew availability: Shortage of highly trained seafarers globally, though TEN has its own training academy to address this.

Q: Congratulations on the shuttle tanker deal getting all 9 done. How are the shuttles going to be operated? And potential crew issues?

A: Transpetro has been operating current vessels with TEN training Brazilian crews. TEN has its own academy to train seafarers, and there is a high probability of close cooperation with Transpetro to operate the new shuttles.

Q: On asset sales, what assets might be under contract to be sold in the second quarter?

A: Older Suezmaxes and first-generation Aframaxes are potential candidates for sale, with expected net proceeds including the recent sale contributing to strong liquidity without straining the balance sheet.

Q: Will there be an appetite to raise the second semiannual dividend if the market improves?

A: TEN has a history of adjusting dividends based on market conditions. Last year, the December dividend was increased to $0.90 due to a strong market, and they hope to do the same with a large backlog of employment, potentially raising the second semiannual payment in the future.