TEN Reaps the Rewards on Offer in Crude Market

New York-listed shipping company Tsakos Energy Navigation Limited (TEN) reported higher net income for the first quarter ended March 31, 2015, posting USD 37.3 million net profit compared to USD 14.6 million in the first quarter of 2014, a year-on-year increase of 156%.

Basic and diluted earnings per share were USD 0.42 for the first quarter 2015. Revenues, net of voyage expenses (bunker, port expenses and commissions), amounted to USD 114.3 million in the quarter, USD 23 million more than in the first quarter of 2014.

Improved results were attributed to low oil prices that pushed fuel costs down, cutting overall voyage expenses compared to the prior first quarter.

Fleet utilization was 99.3%, effectively full employment, with only one product carrier entering dry-dock for special-survey purposes in the latter part of the quarter. The average daily time charter equivalent (TCE) rate (voyage revenue less voyage expenses) was USD 25,591 compared to USD 21,569 average TCE earned in the first quarter of 2014, an 18.6% improvement.

“The first quarter results and the continuous market strengths give us confidence for a very profitable 2015. Looking ahead, the existing supply-demand equilibrium together with the low price of oil enforces our belief that we are in the midst of, finally, a long term up-cycle in the tanker industry,” stated Nikolas P. Tsakos, President and CEO of TEN and current Chairman of INTERTANKO.

“If tanker owners refrain from the speculative newbuilding frenzy of the past, the current positive cycle will be prolonged and will substantially increase shareholder value for the long term,”  Tsakos added.

The Q1 2015 operating income was USD 45.7 million compared to USD 24.5 million in the first quarter of 2014, an increase of 86.5%.

Net income before interest, depreciation and amortization (EBITDA) amounted to USD 72 million in the first quarter of 2015, compared to USD 49 million EBITDA in the first quarter of 2014.

“With 23 vessels operating on very accretive spot contracts and 10 under profit-sharing arrangements, TEN remains steadfast in its efforts to fully reap the rewards on offer in the crude space (and with the products market not that far behind). With 73% of 2015 available days in spot related or flexible charters and most vessels of the fleet at charters well above all-in breakeven rates, management is confident that TEN’s increased earnings will be reflected directly to its bottom line and share price,” the company said.

TEN said that it was closely considering attractive opportunities for growth, including divestment opportunities, particularly for its first-generation tankers, in order to maintain the young age profile of the fleet, create positive capital gains and generate cash for future investments.