ATHENS, GREECE--(Marketwire -08/03/12)- Tsakos Energy Navigation Limited (TEN or the "Company") (TNP)
2012 SECOND QUARTER AND RECENT HIGHLIGHTS
- Voyage revenues of $99.0 million
- 46 out of 48 vessels with positive EBITDA
- EBITDA totals $35.3 million
- Vessel average daily operating expenses down 4% to $7,505
- $10.1 million in operating income compared to $1.7 million loss in the 2011 quarter
- Net loss of $5.7 million compared to a net loss of $18.1 million in the 2011 quarter
- Strong liquidity maintained of $221 million as of the end of second quarter
- Commencement of new accretive four-year charter for LNG carrier Neo Energy
- Total of four new charters since April 2012 with future minimum gross revenues of $62 million over their respective fixtures spanning from one to five years
- Active fleet utilization of 98%
- Quarterly dividend of $0.15 per share paid May 25, 2012, and a further quarterly dividend of $0.15 per share declared today
- $62.7 million raised in equity offering
- Order of new tri-fuel 162,000 cbm LNG carrier
- Option for a further LNG carrier
Tsakos Energy Navigation Limited (TEN or the "Company") (TNP) today reported results (unaudited) for the second quarter and first six months of 2012.
SECOND QUARTER RESULTS
Revenues, net of voyage expenses and commissions, were $72.0 million in the second quarter of 2012, an increase of 12.7% over the second quarter of 2011, despite a continuation of the difficult freight market as a result of tanker oversupply. However, there was considerable relief in the second quarter of 2012 in the form of reduced bunker costs for spot vessels by 5% as oil prices fell and from reduced consumption, especially by the VLCCS which incurred lengthy repositioning voyages last year.
On average, TEN's fleet had 48.0 vessels (including a non-operating VLCC La Prudencia which is held for sale) versus 47.5 vessels in the prior year quarter. Excluding La Prudencia, fleet utilization remained high at 98.4%. The average daily time charter equivalent rate per vessel was $17,714 compared to $16,426 in the second quarter of 2011, and $17,129 in the first quarter of 2012. Rates for most sectors were not significantly different from those of the second quarter of 2011 except for the handysize vessels where rates were down, but this was outweighed by the impact of the LNG carrier, Neo Energy which earned nearly four times as much as the rate it was earning in the second quarter of 2011. The VLCC La Madrina, which is also held for sale, was active during the quarter and earned a break-even rate which allowed it to generate a positive EBITDA.
Total operating costs for the second quarter of 2012 amounted to $32.1 million versus $33.1 million for the same period last year and $35.5 million in the first quarter of 2012. Average daily operating costs per vessel were $7,505 in the second quarter of 2012 compared to $7,826 in the same period of 2011, and considerably less (by 10%) from the unusual level reached in the first quarter of 2012 caused by high non-deferrable dry-docking expenditure. Cost savings on purchases achieved by the technical managers, and the strengthening of the US dollar against the Euro were also factors in the reduction.
Depreciation and dry-docking amortization costs totaled $24.9 million in the second quarter of 2012 compared to $26.0 million in the second quarter of 2011, due to cessation of depreciation following the impairment and categorization as held for sale of the two older VLCCS at the end of 2011. Technical and commercial management fees were approximately the same as in the previous second quarter at just under $4.0 million. G&A costs were down by nearly 10% from the previous second quarter due to savings in most categories.
Interest and finance costs in the second quarter of 2012 were $16.1 million, nearly 5% down from the previous second quarter, but up by $5.8 million from the first quarter of 2012. This was mainly due to flat movements in the valuations of non-hedging interest rate swaps in the second quarter of 2012, compared to over $3 million gains in the first quarter of 2012. There was also a negative valuation movement on the bunker swap of $1.9 million, but this was because of lower bunker prices in the quarter the results of which outweighed the negative movement on the related swap.
The second quarter of 2012 ended in a net loss of $5.7 million or $0.10 per share compared to a net loss of $18.1 million in the second quarter of 2011.
TEN's liquidity at the end of the second quarter of 2012 remained strong. Total cash and investments amounted to $221 million. Total indebtedness since the second quarter of 2011, fell by $53 million. During the second quarter of 2012 TEN issued ten million shares in a secondary offering which raised a net amount of $62.7 million. Cash flow from net income before depreciation, amortization and finance costs ("EBITDA") was $35.3 million. Despite the difficult market, all the vessels generated positive EBITDA, except for the non-operational La Prudencia and the product carrier Aegeas which underwent an extensive dry-docking.
SIX MONTH RESULTS
Revenues, net of voyage expenses and commissions, in the first six months of 2012, totaled $138.2 million, a modest improvement over the first half of 2011. TEN operated an average of 48.0 vessels as compared with 47.7 in the first half of 2011, although the VLCC La Prudencia did not operate in the first half of 2012. The average daily time charter equivalent rate per vessel was $17,407 and daily operating expenses per ship were $7,906. Depreciation and dry-docking amortization costs were $49.6 million. General and administrative expenses totaled $1.8 million, compared to $2.2 million in the first half of 2011.
Interest and finance costs increased in the first half of 2012 to $26.4 million, mainly due to the reduction in positive swap valuation movements.
In the first half of 2012, there was a net loss of $14.5 million, or $0.29 per diluted share.
QUARTERLY DIVIDEND
As announced today, the Company's Board of Directors has declared a quarterly dividend of $0.15 per share of common stock outstanding payable on September 14, 2012 to shareholders of record as of September 7, 2012. Inclusive of this distribution, TEN has distributed in total $9.525 per share in dividends to its shareholders since the Company was listed on the NYSE in March of 2002. The listing price was $7.50 per share taking into account the 2-1 share split of November 14, 2007.
SUBSEQUENT EVENTS
On July 27, 2012 the Company announced a two-year charter of the 2008-built aframax tanker Nippon Princess to the existing charterer, a state owned company. The gross revenues from this charter over the corresponding renewal period are expected to be $14.5 million.
On July 31 and in direct continuation of its prior charter, the Company has been successful in re-fixing the 2003-built panamax product tanker Maya for a period of twelve months for a minimum rate that is expected to generate gross revenues of over $5.5 million.
FLEET STRATEGY & OUTLOOK
The vessel supply situation in the crude market continued to provide a lid to any material rate appreciation that the current world oil demand would have triggered and for another quarter the tanker industry fell victim of its prior and on occasions, uncontrollable, lust for newbuildings. For products market, weak demand in Europe and slow growth in the U.S. economy failed to strengthen rates. On a positive note however, the supply situation seems to be recalibrating towards some equilibrium with the tanker orderbook, this quarter, down to 12% of the fleet (13% in Q1 2012) compared to 27% at the end of 2009. With world economies, driven by China and India with annual GDP growths in the 8.0-9.0% range compared to 1.5% in the US, on the rebound, oil consumption levels at record highs coupled with political tensions around the world, the tanker market downturn may well come to an end sooner than expected.
TEN, due to its size, fleet diversification and modernity, extended client reach and experience in managing cycles, has rode another difficult quarter with fewer bruises then one would had anticipated. With over $221 million in cash and investments reserves at times when liquidity is scarce for most the Company continued to operate in a "business-as-usual" mode and used this time not only to further solidify its exposure with major international end-users but also to expand its chartering horizons further afield with equally pristine names. Its exposure in LNG and shuttle tankers has allowed for such latitude.
Cost containment will continue to feature highly on the agenda going forward and the close to 10.0% drop in quarter-over-quarter daily operating expenses, without jeopardizing the safety of our people on board, provides a sample of our intentions and capability.
In terms of growth, management is currently exploring various opportunities in LNG, shuttle tankers and other mainstream offshore markets while keeping a close eye on developments with conventional tankers which to some degree is entwined to developments in the shipping banking sector. The placement of a state-of-the-art tri-fuel LNG newbuilding order (and an option for an additional vessel) entrenches the Company deeper into this close-knit and high barriers-to-entry market, and management believes that TEN can leverage this modest exposure to its long term advantage.
"Following our tested corporate strategy, TEN has managed to absorb the pressures of the tanker markets while navigating the Company closer to profitability," stated Mr. Nikolas P. Tsakos, President and Chief Executive Officer of TEN. "As mentioned in the past, high utilization, cost control, cash generation and a healthy balance sheet are the cornerstones of our business model. We continue to be alert of market developments and remain optimistic that the Company is well positioned to benefit when the market turns," Mr. Tsakos concluded.
Conference Call
As previously announced, today at 10:00 a.m. Eastern Time, TEN will host a conference call to review the 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 earnings press release.
Conference Call details:
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 August 10, 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. This figure includes one LNG carrier and two DP2 suezmax shuttle tankers under construction totaling 400,000 dwt. TEN's balanced fleet profile is reflected in 23 crude tankers ranging from VLCCs to aframaxes and 26 product carriers ranging from aframaxes to handysize and two LNG carriers. The Company has an option for a third LNG carrier to be declared no later than October 2012, totaling 86,000 dwt.
TEN's employment profile (operating fleet as of August 3, 2012):
Period Employment - Fixed, fixed w/profit share & min max (30)
Pool - market related (4)
Spot - market related (14)
TEN's current newbuilding program:
- Suezmax Shuttle DP2 157,000dwt Q1 2013
- Suezmax Shuttle DP2 157,000dwt Q2 2013
- LNG TBN 86,000dwt/162,000 cbm Tri-Fuel Q1 2015
- LNG TBN 86,000dwt/162,000 cbm Tri-Fuel Q4 2015 (option)
(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 Six months ended
June 30 June 30
------------------------ ------------------------
STATEMENT OF INCOME DATA 2012 2011 2012 2011
----------- ----------- ----------- -----------
Voyage revenues $ 99,046 $ 101,309 $ 201,276 $ 200,505
----------- ----------- ----------- -----------
Commissions 1,503 3,718 5,172 7,073
Voyage expenses 25,576 33,707 57,888 57,240
Vessel operating
expenses 32,110 33,139 67,650 64,735
Depreciation 23,685 24,851 47,369 49,086
Amortization of deferred
dry-docking costs 1,211 1,194 2,268 2,302
Management fees 3,967 3,933 7,959 7,818
General and
administrative expenses 952 1,054 1,784 2,193
Stock compensation
expense 14 329 168 701
Foreign currency
(gains)/losses (69) 240 (119) 637
Net gain on sale of
vessels - 801 - (5,001)
----------- ----------- ----------- -----------
Total expenses 88,949 102,966 190,139 186,784
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Operating income 10,097 (1,657) 11,137 13,721
----------- ----------- ----------- -----------
Interest and finance
costs, net (16,111) (16,945) (26,409) (23,370)
Interest income 395 598 878 1,188
Other, net (38) (10) (19) (131)
----------- ----------- ----------- -----------
Total other expenses,
net (15,754) (16,357) (25,550) (22,313)
----------- ----------- ----------- -----------
Net loss (5,657) (18,014) (14,413) (8,592)
Less: Net income
attributable to the
noncontrolling
interest (42) (113) (91) (250)
----------- ----------- ----------- -----------
Net loss attributable to
Tsakos Energy
Navigation Limited $ (5,699) $ (18,127) $ (14,504) $ (8,842)
=========== =========== =========== ===========
Loss per share, basic $ (0.10) $ (0.39) $ (0.29) $ (0.19)
Loss per share, diluted $ (0.10) $ (0.39) $ (0.29) $ (0.19)
Weighted average number
of shares outstanding
Basic 54,341,534 46,082,284 50,275,135 46,081,888
Diluted 54,341,534 46,082,284 50,275,135 46,081,888
BALANCE SHEET DATA June 30 December 31 June 30
2012 2011 2011
------------ ------------ ------------
Cash and cash equivalents 212,679 175,708 227,472
Current assets, including cash 315,599 287,633 300,175
Investments 1,000 1,000 1,000
Financial instruments, net of
current portion 0 0 959
Advances for vessels under
construction 38,591 37,636 77,101
Vessels 2,640,669 2,639,878 2,704,861
Accumulated Depreciation (492,827) (445,518) (452,528)
Vessels' Net Book Value 2,147,842 2,194,360 2,252,333
Deferred charges, net 17,623 14,708 17,236
------------ ------------ ------------
Total assets $ 2,520,655 $ 2,535,337 $ 2,648,804
============ ============ ============
Current portion of long-term debt 225,600 196,996 120,218
Current liabilities, including
current portion of long-term debt 297,362 279,712 210,617
Long-term debt, net of current
portion 1,248,566 1,318,667 1,406,905
Financial instruments, net of
current portion 13,004 17,800 25,546
Total stockholders' equity 961,723 919,158 1,005,736
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 2,520,655 $ 2,535,337 $ 2,648,804
============ ============ ============
Three months ended Six months ended
OTHER FINANCIAL DATA June 30 June 30
2012 2011 2012 2011
--------- --------- --------- ---------
Net cash from operating
activities $ 16,356 $ 7,901 $ 34,633 $ 35,619
Net cash (used in)/from
investing activities $ (1,556) $ (39,007) $ (2,482) $ (32,086)
Net cash (used in)/from
financing activities $ 12,256 $ (1,048) $ 4,820 $ (52,698)
TCE per ship per day $ 17,714 $ 16,426 $ 17,424 $ 17,203
Operating expenses per
ship per day $ 7,505 $ 7,826 $ 7,906 $ 7,654
Vessel overhead costs per
ship per day $ 1,129 $ 1,231 $ 1,135 $ 1,241
--------- --------- --------- ---------
8,634 9,057 9,041 8,895
FLEET DATA
Average number of vessels
during period 48.0 47.5 48.0 47.7
Number of vessels at end
of period 48.0 47.0 48.0 47.0
Average age of fleet at
end of period Years 7.5 6.7 7.5 6.7
Dwt at end of period (in
thousands) 5,073 4,915 5,073 4,915
Time charter employment -
fixed rate Days 1,222 811 2,364 1,610
Time charter employment -
variable rate Days 1,456 1,676 2,797 3,517
Period employment (pool
and coa) at market rates Days 526 695 1,070 1,415
Spot voyage employment at
market rates Days 995 989 2,103 1,891
--------- --------- --------- ---------
Total operating days 4,199 4,171 8,334 8,433
Total available days 4,368 4,320 8,736 8,631
Utilization 96.1% 96.6% 95.4% 97.7%
Utilization (excluding
La Prudencia) 98.2% 97.4%
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.
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
