Tsakos Energy Navigation Limited(TEN) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the first nine months of 2024, the company generated gross revenues of $660 million and operating income of$236 million, including approximately $49 million in capital gains [35] - The net income for the first nine months was$157 million, resulting in an EPS of $4.62, with adjusted EBITDA up to$314 million [37] - In Q3 2024, gross revenues were $200 million and operating income was$57 million, compared to $187 million and$53 million in Q3 2023 [41] - The net income for Q3 2024 was $26.5 million, producing an EPS of$0.67 [43] Business Line Data and Key Metrics Changes - The fleet operated 62 vessels in the first nine months of 2024, with a fleet utilization rate of 92.2%, down from 95.6% in the same period of 2023 [33] - The mix between secure revenue and spot-related charters was revised to 82% fixed versus 45% spot for the first nine months of 2024, compared to 77% fixed versus 54% spot in 2023 [34] - Time charter equivalent per ship per day was $33,390, which is 3.6 times higher than the daily operating expense rate of$9,306 [36] Market Data and Key Metrics Changes - The company transported 460 million barrels per day in 2023, representing about 5% of global oil consumption [17] - The fair market value of the fleet was approximately $4 billion, with total debt at$1.8 billion, maintaining a net debt to capital ratio of 44% [44] Company Strategy and Development Direction - The company is focused on maintaining a sustainable and profitable industrial energy transportation model, with a significant emphasis on long-term contracts and partnerships with major energy companies [14][48] - The company has a 21 new vessel program, with five vessels acquired earlier in the year and 12 more to be delivered starting from April 2025 [12] - The company aims to achieve a fair valuation of at least double its current trading multiple, which is significantly lower than its peers [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the medium- and long-term prospects of the business, citing a strong appetite for quality ships and services from major clients [14] - The management noted that sanctions on certain countries have benefited first-class shipping companies by reducing competition from older, less efficient vessels [58] - The company is optimistic about future growth, with a backlog of $1.8 billion in secured revenues and a focus on fleet modernization [21] Other Important Information - The company announced a second semi-annual common stock dividend of$0.90, bringing the total distribution for 2024 to $1.50 per common share, a 50$21.5 million remaining for the newbuild program in Q4 2024, with expectations for over $100 million in equity payments for 2025 [66] Question: Dry docking schedule and commercial off-hire expectations - Management expects to have three to four vessels undergoing scheduled dry dockings in Q4 2024, with no additional commercial off-hire anticipated [78][84] Question: Increase in general and administrative expenses - Management clarified that the increase is a one-off due to a share incentive plan for personnel, and G&A expenses are expected to revert lower in Q4 [86][87]