Tsakos Energy Navigation Limited (NYSE:TNP) Q2 2019 Earnings Conference Call Transcript

Sep 06, 2019 • 08:30 am ET

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Tsakos Energy Navigation Limited (NYSE:TNP) Q2 2019 Earnings Conference Call Transcript

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Presentation
Executive
Efstratios Arapoglou

of the Board of TEN, once again, congratulations to Nikolas Tsakos and the team, not only for the results, but also for positioning the Company so well for an upturn in the market as expected.

So, thanks again, Niko, and over to you.

Executive
Nikolas P. Tsakos

Thank you, Chairman. We are glad that we are able to maintain our profitability in a challenging environment. I think we're very glad that our -- as you kindly said, I think TEN is consistently one of the very few companies in our peer group that maintains profitability regardless of the cycles. We are looking at an environment that is promising and we are preparing the Company with that in mind. However, we continue to maintain our policy of chartering our vessels and building vessels against long-term accretive employments that ensure a very strong utilization. We are at 97% utilization in a challenging market for the first six months and this has not changed even last year when the market was even poorer than is today. The future looks promising. A lot of disruptions are -- will be happening in the next couple of quarters and seasonality will help. Already the futures market also indicates that we're going to be seeing a much healthier 2020 and the remaining of 2019.

As we speak today, we're -- we have 32 of our vessels on fixed employments, 20% -- 20 of our vessels in fixed and profit sharing arrangements, including contract of affreightment and 16 vessels in the spot market. I think this mix has enabled us for the first six months to outperform the market by about 10% on the six monthly basis, but even stronger in the last quarter where the market was weaker, about 38%. And this gives us confidence that when the market will be growing and going further, the Company will be able to profit and increase the bottom line even further, which hopefully at some stage will have to be reflected on our share price.

What we are doing right now, we are in the final -- concluding a very large -- one of the largest newbuilding programs with first class long-term employment on every single vessel that any tanker company had. We have already taken delivery of 16 vessels. We have reduced debt by more than $250 million in the last 18 months, which means that the Company throws a lot of cash flow to maintain -- repaying a very -- a dividend and also reducing our debt, and allows income for -- and allows us a liquidity for growth.

In the last month, we have as we stated before, increased our exposure on the LNG sector, and again, talking about state-of-the-art vessels with the long-term employments. So we are positioning the Company in a situation ready to take advantage of the market that we expect to be much stronger in the second half of the year and 2020.

And I think with this, I will ask Mr. Saroglou to give us