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Edited Transcript of TNP earnings conference call or presentation 11-Jun-20 1:00pm GMT

Q1 2020 Tsakos Energy Navigation Ltd Earnings Call

Athens Jul 6, 2020 (Thomson StreetEvents) -- Edited Transcript of Tsakos Energy Navigation Ltd earnings conference call or presentation Thursday, June 11, 2020 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Efstratios-Georgios A. Arapoglou

Tsakos Energy Navigation Limited - Independent Chairman of the Board

* George V. Saroglou

Tsakos Energy Navigation Limited - COO & Executive Director

* Nikolas P. Tsakos

Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director

* Paul Durham

Tsakos Energy Navigation Limited - CFO & CAO

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Conference Call Participants

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* Benjamin Joel Nolan

Stifel, Nicolaus & Company, Incorporated, Research Division - MD

* J. Mintzmyer

Value Investor's Edge - Lead Researcher

* Randall Giveans

Jefferies LLC, Research Division - VP,Senior Analyst & Group Head of Energy Maritime Shipping

* Nicolas Bornozis

Capital Link, Inc. - President

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Presentation

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Operator [1]

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Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference call on the first quarter 2020 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr. George Saroglou, Chief Operating Officer of the company. (Operator Instructions) There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you that this conference is being recorded today, Thursday, 11th of June second -- Thursday, 11th of June, 2020.

And now I'll pass the floor over to Mr. Nicolas Bornozis. Thank you -- President of Capital Link Investor Relations, Advisers of Tsakos Energy Navigation. Please go ahead, sir.

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Nicolas Bornozis, Capital Link, Inc. - President [2]

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Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis of Capital Link, investor relations advisor to Tsakos Energy navigation. This morning, the company publicly released its financial results for the first quarter of 2020. In case you do not have a copy of today's earnings release, please call us at ?126-617-566, or e-mail us at ten@capitallink.com, t-e-n at capitallink dot com, and we will have a copy for you e-mailed right away.

Please note that parallel to today's conference call, there is also a live audio and slide webcast which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please, we urge you to access the presentation slides on the company's website. Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user controlled, and this means that by clicking on the proper button, you can move to the next or to the previous slide on your own.

At this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business process.

And at this moment, I would like to pass the floor to Mr. Takis Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

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Efstratios-Georgios A. Arapoglou, Tsakos Energy Navigation Limited - Independent Chairman of the Board [3]

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Thank you, Nicolas. Good morning, and good afternoon to all. I hope that you and yours are well and staying safe and healthy. Exciting Q1 results, once more delivering consistent justification of TEN operating model. As we've said many times in the past, the model that provides stability of earnings at all times and flexible enough to capture all market opportunities as they arise. This, coupled with best-in-class cost containment and an impeccable health and safety record, allows us to comfortably meet our obligations to reduce debt, and as you've seen, increased our originally declared dividend by 50%. All this, we believe is gradually beginning to be reflected in our stock price, which is, in any case, expected to benefit from our announced reverse split, as it will make our shares, we hope, more attractive to a much broader professional investor audience. Once again, congratulations by all to Nikolas Tsakos and his team. We wish them a continuation of the good market and greater success for the rest of the year. Thank you, and over to you, Nikolas.

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [4]

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Thank you, Chairman, and good morning to all of you. It is really very nice, and I think -- to be able to be in touch with you again after 10 weeks, where we had our last earnings call. I think a lot has gone under since then. A lot of us have experienced unprecedented periods, and many of us have had a lot of, I would say, pain within the family due to the COVID virus. We had the last meeting -- our last discussion on March 24, and at that time, I think we were in the beginning of a very uphill battle as far as personal issues. But for us, other than the personal issues, very important now has been the safety of the 2,000 seafarers onboard our ships all over the world, that has -- I hate to admit, has made our -- made all of us grayer and wiser these last 10 weeks. But we are happy to announce, not only that we were able to operate in this unprecedented time with 97% efficiency, but also not to have, and I knock on wood, because it can happen at any minute, a single case of the virus in any of our vessels. So I think with that in mind, we -- not only we had a very profitable quarter, but more importantly, a healthy and safe quarter for all. And I think going forward, we believe that TEN has been able to navigate since the 28 years that we've been in the public markets, 4 very significant extraordinary crisis, not the crisis coming out of shipping, really, but I mean, we started with the SARS crisis that the older crowd around will remember, between '96 and '97, and that was, I would say, the Helter Skelter of our development and our big newbuilding program. After -- and so the company came much stronger than that. Then in 2001, for 2 years, we had the 9/11 crisis that really stopped a lot of world trade and put us in shock. But again, the company was able to come out of that even stronger with a significant growth. And then in 2009, the credit crisis, which really -- so with the oversupply of tonnage, it was just starting to come out at the end of 2019 when we started enjoying finally a balanced market. And then we were hit with COVID. So -- but again, I believe that we have placed the company in a model that can navigate successfully and profitably this crisis, as we are proving, and we are looking at this where health is the most important part of it, not the financial crisis, I think it's the human factor, is the most important, as a new starting point in 2020 for the company to go forward. We believe that the fundamentals of our industry are very strong. We believe that this crisis could, when it turns around, could have a V-shaped recovery. The order book, in comparison -- the order book for those of you around, you should remember in 2009, was about 40% of the world split was in order in 2009, less 11% of the world fleet is on order today. 50% of the newbuilding capacity of 2009 has completely been eroded and have been closed down. And the world is growing. In 2009, we had an immediate 5% reduction of seaboard trade. The immediate seaboard trade reduction in the last couple of months was at 2%, and I think we are rebounding from that. So this gives us a very good chance that we are going to be seeing strong fundamentals for 2020 and forward. What we did during this period, we took advantage of the crazy rates of March and April in the middle of long isolations and locks all over the parks, to charter our fleets instead of 1 voyage for $200,000 for 2 years at $60,000 and $70,000 talking about VLCCs and other types of vessels. So with that in mind, we have placed the company to be able to navigate, again, the following quarters and years going forward efficiently. We are looking at very attractive possibilities coming from major our major clients. I think we might be announcing very accretive transactions that will have a strong effect to our bottom line coming forward. We are in the final process of negotiating this.

And with this overview in mind, I will ask George Saroglou to remind us what we've gone through in the last 19 more days, and then we will be back. George?

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George V. Saroglou, Tsakos Energy Navigation Limited - COO & Executive Director [5]

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Thank you very much, Tsakos, and good morning to you all. 2020 has so far been a year for the history books. What started in China as a local health problem ended up gradually spreading around the world, creating a global pandemic of unprecedented proportions, which almost put the whole world to a complete standstill as a result of government-mandated lockdowns, social distancing measures to contain the spread of the virus. In this global health crisis, our first priority was the health, safety and well-being of our families, our office personnel and the crew onboard our vessels. Of equal importance was to make sure that there was no business disruption, failure or downtime as a result of working remotely, the lockdown and the difficult global containment measures imposed on shipping. Both onshore and offshore personnel adapted quickly and successfully to the new reality. A big thank you to everybody.

And while life, the economy and the world is opening again, let's be on guard until COVID-19 poses no longer any threat to anybody.

We are pleased to report today a very strong and profitable first quarter, one of the best quarters for TEN as a result of favorable market conditions, low oil price environment, super contango with record land and floating storage at sea, and limited new supply of tonnage, despite the unprecedented demand disruption from the global lockdown. There is a spillover effect of the strong rates into the second quarter. We are not currently at the headline record breaking rate levels, which are not sustainable, but the freight environment and the medium- to long-term outlook continues to be very positive.

Let's go to the slides of our presentation. In Slide 3, we see that since TEN's inception in 1993, as our CEO mentioned, we have faced 4 major crises. But each time, the company, thanks to its operating model, which is built to be crisis resistant, has come out growing, stronger and bigger in size. From 4 modern vessels in 1993, to a pro forma fleet of 69 vessels today, for an average 15% annual growth in term of deadweight in the 4 decades we operate.

In Slide 4, we see the pro forma fleet and its current employment profile. We have a combination of fixed time charters and flexible employment contracts, time charter with profit sharing, COAs, and spot charters that capture the market's upside. All blue color vessels, 30 in the slides, are on fixed rate time charters; while the red and dark red colored vessels, 39, or 60% of the fleet, currently in the water has exposure in the market's upside. We have 11 vessels opening for charter renewals during the year, with 1 vessel opening before the end of this quarter, 9 vessels in the third quarter and 1 in the fourth quarter.

Slide 5. The left side presents the all-in breakeven cost for the various vessel types we operate in TEN. As you can see, the cost base is low. In addition to the low shipbuilding cost, which must highlight the purchasing power of Tsakos Columbia Ship management, the continuous cost control efforts by management to maintain a low OpEx average for the fleet, and the low general and administrative expenses, while keeping a very high fleet utilization rate quarter after quarter, with 97% being the utilization number for the first quarter of 2020. On the right side of the slide, you see that the fixed vessels cover basically all the cost and the spot trading vessels, thanks to our financial and commercial strategy are there to pay for the dividends. Now in addition, for every $1,000 increase in the spot rates, we have a positive impact of $0.08 in the annual earnings per share-based on the number of TEN vessels that currently have exposure to spot markets.

Debt reduction, as we can see in the next slide, is an integral part of the company's strategy. Since the end of 2017, we have reduced debt by $282 million. We have repaid in full the 50 million preferred CSP shares in 2019, and intend to initiate at par, the repayment of the 50 million series C preferred shares during the third quarter. Net debt-to-capital ratio at the end of March 2020 is 46.5%.

We are not just taking advantage of the strong market to pay down debt, but we continue to reward our shareholders with healthy dividends. We announced today a special dividend of $0.025 per share in addition to the fixed $0.05 per share we pay semiannually. This $0.025 per share dividend will be paid on June 26. Since the company's listing in the New York Stock Exchange in 2002, we have paid back, in the form of dividends, $10.93, versus an IPO price of $7.50, which represents an average yield of 5.25%.

On the market, black April appears to be the month where oil prices and global oil demand bottom. China is the first country where lockdown restrictions eased, and now demand appears to become impact at the pre-COVID-19 levels. As the world gradually returns from lockdown restrictions, oil demand gradually recovers. The International Energy Agency and other market experts believe that the oil market is going to rebalance sooner than initially forecasted, thanks to the unprecedented mandated and market-related production cuts by OPEC and non-OPEC producers, and the stimulus packages by governments and central banks to restart the economies and restore consumer confidence. The year-end demand level at about 92 million barrels per day will take us back to the 2013 oil demand levels. To pivot back to the 100 million barrels per day, the pre-COVID-19 levels, it would take us back in 2021, provided that we will not face a second global lockdown of a similar proportion. The International Monetary Fund also expects a strong recovery for global GDP in 2021, which always is positive for energy demand. Let's not forget that the oil price, as long as it lasts, besides being good for the global economy, is a blessing as it stimulates stockpiling and reduces the bunker fuel bill for shipping companies.

On the supply of tonnage in Slide 9, the order book currently stands at 8.3%, or 381 tankers over the next 3 years, which is low compared to historical levels. We should also notice that a big part of the fleet is over 15 years, and environmental regulations could push more tankers approaching or above 20 years to go for scrapping. And this figure of vessels over 20 years is currently 7% of the fleet, which more or less balances the order book of 8.3% as it stands right now.

On the last slide, Slide 10. 2018 was one of the highest scrapping years of records. Last year's scrapping was lower as expected. The strong freight market and the pandemic has put scrapping to standstill, but with more than 1,200 tankers older than 15 years, we could see a pickup in scrapping with more environmental regulations on the horizon, and especially for those vessels approaching or currently above 20 years.

And with that, we conclude the operating part of the discussion. And we move on to Paul and the financial discussion. Paul?

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Paul Durham, Tsakos Energy Navigation Limited - CFO & CAO [6]

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Thank you, George. Well, we've had a strong quarter 1, ending with significant cash reserves, mainly due to voyage revenues of $180 million, helped by full employment and with only 1 dry-docking. This was 22% higher than in the prior quarter 1, and led to a doubling of operating income to $55 million, and of net income to $21 million after noncash bunker hedge losses, and including a $1.6 million gain on the sale of the Suezmax Silia T. Broken down, we had 46 tankers on pure time charter, earning revenue of $80 million. Of these, 16 vessels had profit share arrangements that provided a further $20 million. The 2 LNG carriers, enjoying increased rates, together earned $10 million. Also, 17 vessels, Aframaxes, LR2s, Handysize, operated in the spot market, earning $70 million. EBITDA amounted to $90 million, a 40% increase over the prior quarter 1. In addition, free cash from vessel sales totaled $27 million. Operating expenses increased 4%, mainly due to loading of extra provisions and supplies in light of the spreading pandemic, but daily average OpEx per vessel remained at $7,900 a day.

The sale and leaseback of 2 Suezmaxes, resulted in increased charter in costs by $2.5 million, but much of this is offset by interest saved by repayment of the related loans. G&A costs increased $1 million, partly due to one-off professional fees. Otherwise, daily average G&A costs remained low, with no increase in management fees for many years. Falling oil prices led finance costs to rise to $33.6 million, of which noncash negative bunker hedge valuations totaled $16 million. These are already reversing as oil markets rebalance. Actual loan interest fell by nearly $5 million due to reduced debt and lower interest rates. Vessel sales led to prepayments of $37.5 million related debt, and we also paid $50 million scheduled repayments in quarter 1, reducing outstanding debt to $1.49 billion. For our 2 Suezmaxes being built, we will pay about $90 million for delivery by year-end, mostly from arranged loans. And for the LNG carrier, $36 million by year-end, and $135 million next year. Indications are that quarter 2 will be a strong quarter, and as such, we have secured a number of our vessels on charters at attractive rates, as Nikolas had mentioned, that has put us in a stronger position that even in a weakening market, we will generate a healthy cash flow to meet all our obligations. However, we actually believe that the market will remain strong due to positive underlying fundamentals, plus a possible demand rebound as lockdown features fade.

And now I'll hand the call back to Nikolas.

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [7]

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Thank you, Paul, and keep on bringing us good news.

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Paul Durham, Tsakos Energy Navigation Limited - CFO & CAO [8]

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Will do.

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [9]

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Thank you. And I think with this, we would like to open the floor for any questions that you may have. Thank you very much.

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Questions and Answers

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Operator [1]

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And your first question comes from the line of Ben Nolan with Stifel.

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Benjamin Joel Nolan, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [2]

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Yes. So I have a couple of things. First of all, Nikolas, we're fully appreciating that the deal is not done, but you did allude to some things that you're working on. Could you maybe just characterize the kind of things that you're currently pursuing? I mean are we talking about newbuilds with long-term contracts that we've seen -- as we've seen you done before, or maybe the segment, just a little bit more color as to sort of where your head's at with respect to opportunities?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [3]

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Yes. Sure. You're going to spoil the surprise. Mr. Saroglou is already drafting a surprise press release for next month. We are -- I mean, similar to our strategy of long employments and specialized types of business, we are in close negotiations for up to 3 units that will have, of course, a significant accretive double-digit locked-in returns. So I think this is -- as you said rightly, it is in our strategy, we'll always -- after your clients' request and not built speculatively in our business.

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Benjamin Joel Nolan, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [4]

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Okay. So that leads to another question and I believe that the LNG carrier that's on order does not have a contract, through what you're thinking about that, appreciating that there's a little time before now and then, but obviously, that's a very expensive ship. And getting employment on it, I'm sure is top of mind as with respect to your strategy?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [5]

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I think this is a very good point, Ben, and the company. We, as a company, have the luxury, because we are -- if you look on Slide 4 of our presentation, out of our 69 vessels, we have a very diversified fleet. So we are actually -- we are looking at any business that makes sense in oil and gas transportation. So although we have been one of the first movers in gas, we would -- our first vessel, the very good Neo Energy back in 2004, we have never -- and I think so far, we have not regretted it. We have not been convinced that this market really, because of all the infrastructure demand behind, it will skyrocket, as our good brokers were trying to convince us when they were bringing lots of new building contracts for us to sign. But on the other hand, we believe gas is an important integral part of our business, and being a diversified company, we want to follow the development, having 1 vessel with another option for the fourth quarter, is something that even if that market does not go as expectations, it will not -- we will not feel it in our 69-vessel fleet. So in that sense, we are continuing to follow developments. We have 1 vessel, very good performer of steam turbine. We followed with the dry fuel technologies, this is one of our best earners. Today, the Maria Energy is earning, I think, something like $75,000 a day for the next couple of years. So I think that's very accretive to our bottom line. And then we have the new vessel unnamed, still unnamed, but it is for delivery in January 2022. So I think -- so I think there is a lot of time until then to play the market, see the market. There are people out there that are offering us business for the ship. But it's nothing that, we'll share it one way or the other, the company, but it is our obligation and the Board put it the way to follow the developments in that market.

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Benjamin Joel Nolan, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [6]

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Okay. That's helpful. And then lastly for me, and I'll turn it over. From a capital allocation strategy, you guys are doing a lot of things. There's a little bit of a dividend increase, you're buying back preferred, you're -- it sounds like you're in the market to go spend for growth. Can you maybe just rank order what you're thinking about, especially given you're optimistic for the future. But I think anybody would say it's still a little bit of an unknown. How are you balancing safety versus growth opportunities and where are the best places for your dollars?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [7]

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Chairman?

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Efstratios-Georgios A. Arapoglou, Tsakos Energy Navigation Limited - Independent Chairman of the Board [8]

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I think in the pecking order, repaying the expensive reps come first. And then we can -- as Niko said, investing in ships, it's a question of markets and demand and prices. So you cannot rank that. It is always a priority -- top priority. But in terms -- we have enough press to repay before we find something else to do. Let's put it this way.

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Operator [9]

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Your next question comes from Randy Giveans with Jefferies.

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Randall Giveans, Jefferies LLC, Research Division - VP,Senior Analyst & Group Head of Energy Maritime Shipping [10]

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A question around the profit sharing is -- what's the -- what was the amount there for the first quarter and was that a record? And then just kind of leave some guidance for the second quarter, I know rates were pretty strong, especially in the product centers in April, and it fallen kind of since then. So if you can maybe give a little more commentary on the market as of today and where you sit?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [11]

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I think the market -- yes, the market was very strong in the first quarter. And we had at least $20 million additional revenue from the profit sharing. This is 10%. This is significant. And of course, the market has been very strong also until now. So it is expected to have this continuation of the profit sharing, adding to the bottom line as long as the market stays at these levels. Okay?

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Randall Giveans, Jefferies LLC, Research Division - VP,Senior Analyst & Group Head of Energy Maritime Shipping [12]

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Yes. And then I was saying, in terms of the second quarter, are you expecting kind of something similar to that $20 million? Or a little more, a little less?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [13]

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I think what we're expecting is perhaps might be similar. Similar, and we might see a bit higher reverse from the fixed vessels, because we fixed 5 ships going forward. So I think that, that could be the -- a similar profit sharing, and then hopefully, a little bit more from the spot vessels -- sorry, for the fixed vessel.

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Randall Giveans, Jefferies LLC, Research Division - VP,Senior Analyst & Group Head of Energy Maritime Shipping [14]

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Got it. Okay. And then turning to the dividend, I guess 2 questions around that. What would be kind of thinking of raising it by $0.025 instead of keeping it flat or instead of doubling it or whatever? So how did you kind of get to that $0.075 for the quarter? And then secondly, looking at the chart on Slide 7, it seems like in 2017, there were 4 quarterly payments of $0.05 a share for $17 million. 2018, there were 3 payments of $0.05 a share for $13 million. 2019, there was 2 payments of $0.05 a share for $9 million. So is the quarter -- is the dividend now semiannually? Or how should we think about that?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [15]

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Well, yes, the dividend has gone semiannual from 2018. That's why I think the -- that's why you see in 2018, the missing 1 quarterly payment, and then we have the semiannual payments going forward. So the -- June and December.

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Paul Durham, Tsakos Energy Navigation Limited - CFO & CAO [16]

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As to the calculation of the special dividend, it's not rocket science, we felt that because of good markets, our investors should be rewarded a bit more. This is a one-off. Our base dividend continues to be, in our minds, $0.05 per share twice a year. And going forward, we'll see how the market develops and act accordingly.

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Randall Giveans, Jefferies LLC, Research Division - VP,Senior Analyst & Group Head of Energy Maritime Shipping [17]

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Got it. And then last question, on the reverse split. Kind of same question around methodology, I think you may have 1 for 5 instead of a smaller or a larger number? Is it to get in that low double digit range?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [18]

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Well, what we try to do is find a figure that would not completely dry up liquidity in the sense of how many shares that will be outstanding. Because if we have done 1 to 10, we would be [5] million shares outstanding, it will be a very small amount. So we decided to do -- that 1 to 5 is a good -- plus hopefully, having the share at $3, it will be higher than we started some time ago.

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Operator [19]

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Our next question comes from J. Mintzmyer with the Value Investor's Edge.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [20]

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Thank you. So first question I had, it sounded like the first LNG carrier has been moved to January 2020, just confirming -- or 2022, just confirming that one? And then second, I know you have an option for a second LNG carrier. What's the time line on which you'd have to exercise that option or cancel that?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [21]

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Well, I think it's within the third quarter. But of course, the yards today, as you might know -- I'm sure you know because you follow things very closely, they are starved for orders. And they are -- they are willing to give more optionality, as we say.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [22]

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Okay. Looking for the third quarter, maybe the ability to push that back? And then, of course, are you confirming that it's January 22?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [23]

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Yes. I think it will be a decision by the end of the year.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [24]

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Okay. We'll look for more color on that. And what was the agreed-upon price for that option, that second one?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [25]

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It is similar to the price we have for the existing ship. But depending on market conditions, we might -- if we decide to take it, we might get a discount.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [26]

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Okay. We'll have to continue to watch that. In terms of the remaining newbuilds, you have 3 more left: The 2 tankers and the LNG carrier. Can you remind us of the remaining CapEx and the time line for those payments?

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [27]

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Paul, what are the CapEx -- or the remaining CapEx?

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Paul Durham, Tsakos Energy Navigation Limited - CFO & CAO [28]

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Right. So as far as the 2 Aframaxes are concerned, take apart the Suezmaxes that will have been -- are going to be delivered towards the end of the year, we are looking at another $90 million or so that we have to pay. With the LNG carrier, we have about $36 million remaining this year. But another $135 million next year, up until actual delivery.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [29]

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Thank you for that. So I'm tracking $90 million for the tankers, and then about $170 million for the LNG carriers. And then on your repurchase authorization, you started a $50 million program last quarter. It looks like in the press release, I didn't see any indications that you used that. So is that correct? No repurchases yet? And then secondly, I think there's a little bit of discussion earlier on this, but can you confirm your priority on that? Is that mainly for preferred? Or are you also considering repurchasing common at this time?

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Efstratios-Georgios A. Arapoglou, Tsakos Energy Navigation Limited - Independent Chairman of the Board [30]

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It's mainly for preferred, but -- and we have a 50 million prefs that we intend to buy back as part in the third quarter. And of course, all for common shares as well. But the priority -- the first priority is on prefs.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [31]

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And is that -- is that $50 million of authorization, is that in excess of the $50 million that you have reserved for the Series C?

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Efstratios-Georgios A. Arapoglou, Tsakos Energy Navigation Limited - Independent Chairman of the Board [32]

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It's in combination.

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J. Mintzmyer, Value Investor's Edge - Lead Researcher [33]

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And a final question for you, so you mentioned at the start of the call that you're looking into refinancing transactions, but prior to those, so just currently as it stands, can you remind us of the amortization curve for 2020? And then the repayments for '21 and '22 as well?

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Paul Durham, Tsakos Energy Navigation Limited - CFO & CAO [34]

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Well, we scheduled repayments for the whole year 2020 of about $130 million. And in '21, we're looking at about $160 million. In '22, $150 million. And in '23, about $130 million. It will, of course, be -- balloons, but we usually assume that the balloons will be refinanced. I don't think we have any more questions?

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Operator [35]

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I'll turn the call back over to Mr. Tsakos.

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Nikolas P. Tsakos, Tsakos Energy Navigation Limited - Founder, CEO, President & Executive Director [36]

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Thank you. Thank you very much. And again, as we said, we would like to thank all of you. In the last 10 weeks since this we last spoke have been really life-changing for many of us and for sure, our main target has been to make sure that the safety of our seafarers around the world, what has been the most important case. And so far, we have been efficient and supportive of this. And we could not have achieve that with the help of the whole organization (inaudible) hours of the lockdown, which we still experience in a much smaller fragment. So it's been a very interesting 10 weeks since we spoke on March 24. The news that we are reporting today are very positive news. But the most positive part of our news has been the safeguarding and the health and the safety of our seafarers all over the world around our vessels.

As far as the prospects for the market, TEN as a company that has gone through 4 crises in the past, for 4 crises that are extraordinary to shipping -- are not shipping crises. We had quite a few of those in between, but we started with the Far East crisis, where the company came out stronger. Then we had 9/11, with 2 or 3 years of almost a significant reduction of global trade because of the -- again, the company took the opportunity to come up -- to come up out of it stronger. Then in 2009, the financial crisis, which really, until 2019, we were still absorbing the overbuild of that period. And as soon as we started enjoying a good market in 2019, the COVID crisis. But again, with the help of everybody, the company, we believe, is coming out stronger from that period. The fundamentals in front ahead of us are positive. We believe that we could see a V-shaped recovery. There are signs that China, which was the first country in the lockdown, could be the first one that will drive this recovery.

The OPEC reduction has some silver linings for some trades, create more tonne miles, in many cases. We already are seeing that India is doubling its imports in the last -- since March. And it has to take imports from not the directly close OPEC countries, but for longer tonne mile routes. We're seeing China having a reduction as it opens up about 7 million to 9 million barrels a day, and is looking for trades from -- much for exporting countries that provide more tonne miles. And we just saw a lot of Chinese fixtures from the -- from the north part of Russia, from the European part of Russia, 4 VLCCs were fixed from SKO, all the way to China, a lot of tonne miles in that. And the newbuildings, as Ms. Saroglou had said, that down to 8% or 9% of the world fleet. It was 40% of the world fleet in the last crisis in 2009. So this gives companies like ourselves, a good future fundamentals. So it will be -- there might be some uphill battles, but we took the opportunity to -- 6 of our vessels long-term during the strong market of the first quarter in the remaining quarter.

And we hope when we talk to you next in September, to have much better news and find everybody safe and well again. Mr. Chairman?

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Efstratios-Georgios A. Arapoglou, Tsakos Energy Navigation Limited - Independent Chairman of the Board [37]

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Well, thank you all for joining us. Let's wish Niko and his team a successful quarter in the second quarter. And let's hope that the market continues to be buoyant as it is, as it has been. And I'm sure we'll be able to announce to you equally good results next time. Thank you all. Stay safe.

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Operator [38]

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Thank you for your participation. This concludes today's conference call, and you may now disconnect.