Tsakos Energy Navigation Limited Q3 FY2025 earnings call

• High fleet utilization contributing to sustainable profits. - 20-vessel newbuilding program with deliveries from Q1 2026 to Q4 2028, including 10 shuttle tankers with long-term accretive employment and 3 VLCCs. - Focus on selling older tonnage to maintain a young and modern fleet. - Declared an additional $1 per share dividend paid in 2 equal tranches, totaling a $1.60 per share annual dividend with an attractive yield over 4%. - Major clients include ExxonMobil, Equinor, Shell, Chevron, Total, and BP, with repeat business due to fleet quality, operational/safety record, financial discipline, and strong balance sheet. - Transitioning to greener and dual fuel vessels, with 6 dual fuel LNG-powered Aframax tankers in operation.

For the 9 months ended September 30, 2025, Tsakos Energy Navigation generated $577 million in gross revenues and $171 million in operating income. The third quarter of 2025 saw $186 million in gross revenues and $60.5 million in operating income. In terms of fleet composition, the operating fleet of 62 vessels has 23 vessels (37%) with market exposure (spot and profit sharing) and 55 vessels (89%) in secured revenue contracts (time charters and profit-sharing time charters). The fleet's Time Charter Equivalent rate for the first 9 months of 2025 was $30,703 per day, and for the third quarter, it was $30,601 per day.

• $4 billion of accretive future contracted revenue provides stability and predictability. - 20-vessel newbuilding program with deliveries over several years. - Anticipation of continued strong market conditions with favorable tanker fundamentals despite geopolitical challenges.

• Geopolitical risks such as hijacking of vessels, Somalia piracy, and interference in shipping routes. - Market volatility due to factors like IMO saga postponement impact and gray fleet issues. - Uncertainties related to global economic conditions and trade wars affecting shipping demand.

Q: I wanted to start by asking about the 12 VLCCs coming open throughout this month. You mentioned in the press release that the employment on the DS1 has been extended for 2 years. Could you clarify at what terms? And secondly, based on your data kit, the Ulysses should also come open this month. How do you plan to employ this vessel? Is there any appetite to trade on spot?

A: Yes. We are seeing a significant increase in profit-sharing arrangements from past minimum profit sharing arrangements. There is a significant appetite for the vessels out there. Perhaps next week when you see Harrys in the states, he can give more details.

Q: I also wanted to ask about the Maria Energy. It is fixed until February of next year, but the long-term contract you signed a while ago doesn't start until May, if I remember correctly. Do you plan to trade the vessel on spot once it comes off its current contract and before it starts the next one?

A: The vessel is actually fixed back to back to a 15-year employment. So there won't be any downtime between that other than the scheduled survey that she will have to go before the delivery of this in April. So the vessel has been chartered back to back until she goes to her new charter. So there won't be any downtime.

Q: You have a couple of MR newbuilds delivering in early '26. Should we expect those to be fixed on long-term contracts before delivery? And should that be the case, what kind of duration are you looking at?

A: We're contemplating. There's a big appetite. Our chartering team has 5 or 6 major oil companies looking for those ships. We're supporting the Cargill-Maersk pool and might be considering pooling, which gives full utilization and spot market upside.

Q: Some of the questions were covered already, but when I look at your newbuild program, close to 20 major commitment. What are you looking at as far as the fleet renewal side? You've been active selling assets. Asset values are fairly firm in my mind. So what should we anticipate over the next, call it, year or so as far as on the asset sales side?

A: We are close to negotiating 5 of our first-generation vessels. If you take a 12 months forward, I think it would be perhaps double that, 10 vessels. We're looking to the transactions we have in mind would release close to $250 million of net cash, which is more than enough of what we need for our newbuilding program.