TEN Keeping a ‘Tight Ship’ as Its Eyes FSRU Conversion, Major Transaction

Tsakos Energy Navigation Limited (TEN) achieved net income of USD 158.2 million in 2015, a nearly fivefold increase from the USD 33.5 million achieved in 2014, the company said.

Operating income for the same period was USD 188.1 million compared to USD 76 million in 2014.

TEN said that 2015 was the “best performing year in recent times” assisted by low crude prices, robust world oil demand and equilibrium in the tanker fleet.

“The healthy global demand for oil continued throughout the four quarters of 2015 and continues into 2016, fostered by the low price of crude. Throughout the year, TEN operated and positioned its diversified fleet of young vessels to take advantage of market conditions, enjoying effectively full employment at 98%. As a result, in 2015, TEN achieved net revenue  of USD 455.8 million, 31.4% more than in 2014,” the company said.

The average daily time charter equivalent rate per vessel during 2015 was USD 25,940, compared to USD 19,834 in 2014, a 30.8% increase.

“As we enter our 23rd year of successful operations, we are pleased to report our strongest results in this decade and look forward to a 2016 as a pivotal year of unprecedented growth. Going forward, TEN will continue its responsible expansion, flexible employment strategy and operational efficiency so as to solidify its bottom line with healthy and sustained revenues from high-end counterparties,” Nikolas P. Tsakos, President and CEO of TEN commented.

According to Tsakos, 2016 is going to be the company’s most active year in new vessels, adding that “there is a huge appetite for them in the market and we are negotiating deals. So I think unless some opportunities might arise in the secondhand market, I think we have reached our growth. We are where we wanted to be at this stage.”

“Looking ahead, TEN’s cash flow generating ability will be enhanced and broadened. In the next eight quarters we will take delivery of 15 fully financed vessels, the majority of which are under long term accretive employment. These will be added to the existing fixed contracts, a number of which on profit sharing arrangements allowing us to benefit from the strong market,” Tsakos added.

The company management said that it expects in the very near future to conclude “additional accretive transactions with major end users further enhancing the company’s bottom line and profitability.”

During a conference call on Tuesday, Tsakos said that “ in the next couple of days we will be announcing another major strategic transaction. We are waiting for subjects to be lifted. I think that will add to that percentage. So I hope that before we see you next week in New York we will have to share good news also. “

“With the new vessel introductions this year we expect the annual contracted coverage of the fleet to increase to 60%. The secured coverage this time last year was at 45%. Such employment optimization, allows the company to fix long term at current elevated levels while preserving the flexibility to capture market peaks through existing flexible contracts, namely time charters with profit sharing provisions, CoAs and spot. Consequently, these new businesses will further secure TEN’s solid performance and uninterrupted dividend record going forward,” the company said.

Speaking of the plans on potential recharter of Neo Energy LNG tanker, Tsakos revealed that the company was discussing a potential conversion in charter and conversion of the vessel into FSRU, “as there is quite an appetite for vessels like these.”

Concluding the conference call Tsakos said that moving ahead the company’s aim is “to keep a tight ship literally, keep costs under control, make sure that our vessels are utilized, (…), at least 98% for the year and I think the results will talk for themselves.”