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

Sep 06, 2019 • 08:30 am ET


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


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Paul Durham

for the six months, a 43% increase.

On top of the significant reduction in outstanding loans, we also redeemed the Series B preferred stock in July, with $50 million returned to stockholders. So all in all, we are pleased with the results in the first six months given the difficult market and we remain optimistic for the rest of 2019 and beyond, based on low inventories, completed refinery maintenance, high US oil exports and reduced tanker deliveries, recognizing that we are approaching a period of probable disruption that may reduce the availability of tankers that in turn will have a positive effect on returns.

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

Nikolas P. Tsakos

Thank you, Paul, for another quarter of positive news. And we are, as I said, glad being one of the very few in our peer group, if not the only one that is positive this quarter and for the first six months. We are able to achieve this by tight control on the actual assets, maintaining operating expenses and utilization at very high rates. And our chartering strategy gives us the ability to outperform the spot markets significantly. This -- the first six months, we had a 36% outperformance of the spot market that has enabled the Company to be profitable. Our VLCCs performed significantly better than the spot market in the first six months, the same with our Suezmaxes, Aframaxes, Panamaxes in every single sector that we participate, we have to outperformed the market significantly, with a total average of 36% in that growth.

Also, a very important part of our business has to do with reducing debt. And I think as Mr. Saroglou George said, reducing debt and repaying our initial Series B preferred was one of the highlights of the first six months and hence still realizing a very strong liquidity. But also interest rate reduction is very positive for our business. Just to put to in a perspective, every 1% reduction in interest rate is almost $15 million straight down to our bottom line. So that's a very significant number going forward.

On the growth side, our long-term strategic relationships are maintained. Our operational excellence is appreciated by the end users that they would rather do business with companies with a long-term solid profile like ourselves. Four vessels with a strategic relationship to a US major oil company with very long employment starting this quarter and going -- or I guess starting next fourth quarter and one vessel every quarter following. And of course, then the expansion on the LNG -- in the LNG sector continues, and a lot of accretive business in the backlog as we speak, which gives us a very positive feeling that the market is expected to go from strength to strength, at least in the medium to near future.

And with this, I would like to open the floor for any questions that you may have.