|By Marketwired .||
|November 21, 2012 08:15 AM EST||
ATHENS, GREECE -- (Marketwire) -- 11/21/12 -- Tsakos Energy Navigation Limited (NYSE: TNP)
- Voyage revenues of $293.7 million
- Positive EBITDA generated from all operational ships totalling $87.7 million
- $11.9 million in operating income vs. $4.6 million in nine-months 2011 (159% increase)
- 24% improvement in the net results, ($24.9) million loss vs. ($32.9) million loss in nine-months 2011
- Maintained strong balance sheet
- Nine new charters with minimum revenues of over $220 million and 2.4 years average employment
- 33 vessels out of a pro-forma fleet of 51 on fixed employment utilization
- Constant quarterly dividend payments ($0.50 per share in 2012). $9.575 per share in total dividends since NYSE listing in 2002
- Active fleet utilization of 98% - Maintenance of tight cost control
- Fleet average age 6.2 years - Agreement to sell two older vessels
- Further expansion in LNG and shuttle sectors
- Accretive re-charter of the LNG Neo Energy
Tsakos Energy Navigation Limited (TEN or the "Company") (NYSE: TNP) today reported results (unaudited) for the first nine months of 2012 and third quarter.
NINE MONTH RESULTS
Revenues, net of voyage expenses and commissions, in the first nine months of 2012, totaled $202.4 million, an improvement of $10.6 million over the first nine months of 2011. TEN operated an average of 48.0 vessels as compared with 47.7 vessels in the first nine months of 2011, although the VLCC La Prudencia did not operate in the first nine months of 2012, and the La Madrina operated only for five months. The average daily time charter equivalent rate per vessel was $17,152 compared to $16,146 in the first nine-months of 2011. Voyage expenses were significantly reduced due to the absence of the long repositioning voyages taking place in 2011 and reduced bunker consumption.
Operating costs for the first nine months of 2012 were at $100.8 million. For the nine-months 2012, depreciation and dry-docking amortization costs were $74.9 million compared to $78.5 million in the previous year first nine-months. General and administrative expenses totaled $2.8 million, compared to $3.0 million in the first nine months of 2011.
Interest and finance costs decreased in the first nine months of 2012 to $37.8 million from $38.9 million in the prior nine month period, mainly due to positive non-hedging swap valuation movements.
In the first nine months of 2012, there was a net loss of $24.9 million, compared to a $32.9 million net loss in the prior nine month period.
THIRD QUARTER RESULTS
Revenues, net of voyage expenses and commissions, were $64.2 million in the third quarter of 2012, an increase of 15.5% over the third quarter of 2011, in a market that fell to depressingly low levels as seasonal weakness combined with tanker oversupply forced rates down.
On average, TEN's fleet had 48.0 vessels (including the non-operating VLCCs La Prudencia and La Madrina which are held for sale) versus 47.7 vessels in the prior year quarter. Excluding these two inactive VLCC vessels, fleet utilization remained high at 98%. The average daily time charter equivalent rate per vessel was $16,602 compared to $14,055 in the third quarter of 2011. Rates for all vessel categories were better than those of the third quarter of 2011 except for the suezmaxes where rates achieved by those on spot or profit-share were down, but again this was outweighed by the impact of the LNG carrier, Neo Energy, earning substantially more than in the third quarter of 2011.
There was little change in total operating costs for the third quarter of 2012 at $33.1 million versus the $33.0 million for the third quarter of 2011. Similarly, average daily operating costs per vessel were $7,663 in the third quarter of 2012 compared to $7,681 in the same period of 2011, with higher repair costs due to extra dry-dockings being offset by reductions in most other categories of expense, in part due to a strengthening of the dollar over the Euro by 11.5%. Again, the technical managers were able to achieve cost savings on purchases in a difficult environment while striving to maintain the highest standards in safety and quality of the vessels and the operations.
Depreciation and dry-docking amortization costs totaled $25.2 million in the third quarter of 2012 compared to $27.1 million in the third quarter of 2011, the decrease being mainly due to ending of depreciation following the 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 third quarter at just under $4.0 million. G&A costs increased by over $200 thousand mainly due to professional fees associated with new growth projects the Company has been investigating.
Interest and finance costs at $11.3 million were nearly 27% less in the third quarter of 2012 than the previous third quarter. This was mainly due to positive swings over the twelve months from the previous valuations of non-hedging interest rate and bunker swaps attained in the third quarter of 2011.
The third quarter of 2012 ended in a net loss of $10.4 million or $0.18 loss per share compared to a net loss of $24.1 million or $0.52 loss per share in the third quarter of 2011.
TEN's liquidity at the end of the third quarter of 2012 remained strong. Total cash and liquid investments amounted to $164 million. Cash flow from net income before depreciation, amortization and finance costs ("EBITDA") was $26.2 million. Despite the very difficult market, apart from the two non-active VLCCs and four other vessels, all the other vessels generated positive EBITDA in the quarter and all active vessels in the nine-months generated positive EBITDA. Total indebtedness since the third quarter of 2011, was reduced by $76 million to September 30, 2012. TEN continues to pay all its debt service obligations as they become due and believes it is capable of maintaining that record.
As announced today, the Board of Directors has declared a quarterly dividend of $0.05 per share payable on December 20, 2012 to shareholders of record as of December 14, 2012. This brings the total dividends for calendar 2012 to $0.50 per share. Inclusive of this distribution, TEN has distributed in total $9.575 per share in dividends to its shareholders since the Company was listed on the NYSE in March 2002.
FLEET STRATEGY & OUTLOOK
Although the third quarter is seasonally the weakest for energy transportation demand, certain glimpses in trading patterns and rates did emerge which offered insights of things that may come. During this quarter, crude tanker spot rates improved somewhat and exhibited a certain stability. On the product side, rates experienced a noticeable uplift thanks to refinery closures in Europe and the US which, coupled with increased refinery capacity in the Far East and notably in Saudi Arabia, India and China produced increased ton-mile demand and hence a healthier market environment.
As freight rates seem to be slowly negotiating themselves out of the doldrums, we enter the expected "strong" fourth quarter of the year in the hope that the sector upturn evident in the prior quarter will eventually return to exhibit signs of a sustainable recovery. The improving supply situation is helping in that direction as the orderbook continues its downward trend. According to Clarkson Research Services, today it stands at 11.7% of the fleet as opposed to 12.6% in June 2012 and 14.4% at end of 2011. By comparison, at end of 2010, the year when shipping rates took an abrupt and severe turn for the worse, the fleet orderbook stood at 22.3%. This declining orderbook is coupled with a healthy oil demand outlook for 2013, 90.5mbpd vs. 89.7mbpd in 2012 according to the International Energy Agency. In addition, special attention should be paid to certain geopolitical events around the world as they tend to increase oil demand and freight rates.
Looking ahead, management remains cautiously optimistic for the medium to long-term outlook of the tanker industry and is of the opinion that shipping will present interesting opportunities for longer term investments. Moreover, the expected delivery of the two shuttle tanker newbuildings just a few months away, the ice-class features in 21 vessels of the fleet particularly with the upcoming winter months in Northern Europe and North America, together with the Company's presence in LNG markets provide the necessary versatility to maintain its long stated objective of healthy shareholder returns including dividend payments.
"High fleet utilization, tight cost control, fleet modernity, our long term employment profile, together with our strong balance sheet have allowed TEN to navigate safely through this market downturn that started in late 2008," stated Mr. George V. Saroglou, Chief Operating Officer of TEN. "Looking ahead, we think the worst is behind us as supply of vessels shrinks while global oil demand continues to increase," Mr. Saroglou concluded.
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 Wednesday, November 28, 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. It also includes two non operational VLCCs held for sale. 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 end November 2012.
TEN's employment profile (operating fleet as of November 21, 2012):
Period Employment - Fixed, fixed w/profit share & min max (27)
Pool - market related (4)
Spot - market related (15)
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 -- Option vessel technical specs subject to change depending on charterer/employment)
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 Nine months ended September 30 September 30 ------------------------ ------------------------ STATEMENT OF OPERATIONS DATA 2012 2011 2012 2011 ----------- ----------- ----------- ----------- Voyage revenues $ 92,409 $ 93,862 $ 293,686 $ 294,367 ----------- ----------- ----------- ----------- Commissions 3,375 3,399 8,548 10,473 Voyage expenses 24,812 34,849 82,700 92,090 Vessel operating expenses 33,146 32,978 100,796 97,712 Depreciation 23,948 25,859 71,317 74,945 Amortization of deferred dry-docking costs 1,266 1,271 3,534 3,572 Management fees 3,967 3,879 11,926 11,698 General and administrative expenses 1,048 811 2,831 3,004 Stock compensation expense 0 73 168 774 Foreign currency (gains)/losses 71 (139) (48) 500 Net gain on sale of vessels - - - (5,001) ----------- ----------- ----------- ----------- Total expenses 91,633 102,980 281,772 289,767 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Operating income / (Loss) 776 (9,118) 11,914 4,600 ----------- ----------- ----------- ----------- Interest and finance costs, net (11,348) (15,502) (37,758) (38,872) Interest income 243 779 1,121 1,967 Other, net (6) (74) (25) (205) ----------- ----------- ----------- ----------- Total other expenses, net (11,111) (14,797) (36,662) (37,110) ----------- ----------- ----------- ----------- Net loss (10,335) (23,915) (24,748) (32,510) Less: Net income attributable to the noncontrolling interest (24) (145) (115) (395) ----------- ----------- ----------- ----------- Net loss attributable to Tsakos Energy Navigation Limited $ (10,359) $ (24,060) $ (24,863) $ (32,905) =========== =========== =========== =========== Loss per share, basic $ (0.18) $ (0.52) $ (0.48) $ (0.71) Loss per share, diluted $ (0.18) $ (0.52) $ (0.48) $ (0.71) Weighted average number of shares Basic 56,293,237 46,153,987 52,295,812 46,106,185 Diluted 56,293,237 46,153,987 52,295,812 46,106,185 BALANCE SHEET DATA September 30 December 31 September 30 2012 2011 2011 ------------- ----------- ------------- Cash, restricted cash and marketable securities 164,275 184,226 237,960 Other assets 126,630 119,115 84,049 Vessels, net 2,124,215 2,194,360 2,301,955 Advances for vessels under construction 88,939 37,636 19,060 ------------- ----------- ------------- Total assets $ 2,504,059 $ 2,535,337 $ 2,643,024 ============= =========== ============= Debt 1,472,117 1,515,663 1,547,746 Other liabilities 85,945 100,516 118,848 Stockholders' equity 945,997 919,158 976,430 ------------- ----------- ------------- Total liabilities and stockholders' equity $ 2,504,059 $ 2,535,337 $ 2,643,024 ============= =========== ============= Three months ended Nine months ended OTHER FINANCIAL DATA September 30 September 30 2012 2011 2012 2011 --------- --------- --------- --------- Net cash from operating activities $ 4,824 $ 5,024 $ 39,457 $ 40,641 Net cash (used in)/from investing activities $ (50,574) $ (17,442) $ (53,056) $ (49,526) Net cash (used in)/from financing activities $ (15,636) $ 15,988 $ (10,816) $ (36,710) TCE per ship per day $ 16,602 $ 14,055 $ 17,152 $ 16,146 Operating expenses per ship per day $ 7,663 $ 7,681 $ 7,825 $ 7,663 Vessel overhead costs per ship per day $ 1,136 $ 1,086 $ 1,135 $ 1,189 --------- --------- --------- --------- 8,799 8,767 8,960 8,852 FLEET DATA Average number of vessels during period 48.0 47.7 48.0 47.7 Number of vessels at end of period 48.0 48.0 48.0 48.0 Average age of fleet at end of period Years 7.8 6.8 7.8 6.8 Dwt at end of period (in thousands) 5,073 5,073 5,073 5,073 Time charter employment - fixed rate Days 1,256 930 3,620 2,540 Time charter employment - variable rate Days 1,399 1,675 4,196 5,192 Period employment (pool and coa) at market rates Days 388 577 1,458 1,992 Spot voyage employment at market rates Days 1,084 1,082 3,187 2,973 ------- ------- ------- ------- Total operating days 4,127 4,264 12,461 12,697 Total available days 4,416 4,384 13,152 13,015 Utilization 93.5% 97.3% 94.7% 97.6% Utilization (excluding La Madrina and La Prudencia) 97.5% 97.6% 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.
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