2009 THIRD QUARTER HIGHLIGHTS * Voyage revenues of $106.20 million. * Net income of $2.11 million. * EPS of $0.06 per share (diluted). * Semi-annual dividend of $0.30 paid October 29, 2009. * Average number of vessels 47 with over 5.1 million dwt. * Average time charter equivalent per vessel $21,116 per day. * Average operating expenses per vessel $8,121 per day. * Amver Awards - Company of the Year 2009 NINE-MONTH HIGHLIGHTS * Voyage revenues of $346.69 million. * Net income of $45.34 million (no vessel sales). * EPS of $1.22 per share (diluted). * Delivery and charter of newbuildings Ise Princess and Asahi Princess. * Charters for nine vessels. * Average time charter equivalent per vessel $23,819 per day. * Average operating expenses per vessel $8,655 per day. * Special survey acceleration on six vessels scheduled for dry dock in 2010.
ATHENS, Greece, Nov. 6, 2009 (GLOBE NEWSWIRE) -- TSAKOS ENERGY NAVIGATION LIMITED ("TEN" and "the Company") (NYSE:TNP) today reported financial results (unaudited) for the third quarter and nine months ended September 30, 2009.
Net income was $2.11 million for the third quarter of 2009 as compared to $40.98 million for the third quarter of 2008. This was primarily due to the lower freight rate market and to fewer operating days due to the accelerated dry-docking of six vessels following management's decision to bring certain dry-dockings scheduled for 2010 forward in order to have more vessels available next year when the freight market is expected to improve. Net revenues (voyage revenues net of commissions and voyage expenses) reached $82.78 million from $124.35 million in the same quarter of 2008. The time charter equivalent per ship per day was $21,116 in the third quarter of 2009 versus $33,732 in the third quarter of 2008. Operating expenses per ship per day decreased to $8,121 from $9,243 in the third quarter of 2008, a 12.1% reduction mainly due to cost containment efforts and lower repair expenses.
Depreciation and dry-docking amortization costs were $25.90 million compared to $22.42 million in the same quarter of 2008. Diluted EPS this quarter were $0.06 compared to $1.08 in the same quarter last year. Management fees increased by $0.4 million, reflecting the increased number of ships, while other overhead expenses, including stock compensation expense, decreased by $0.95 million from the same quarter last year.
Operating income was $17.70 million in this year's third quarter compared to $56.81 million in the similar period of 2008.
Interest and finance costs net of interest income remained at similar levels at $15.34 million this quarter versus $15.07 million in Q3 2008 mainly due to reduced interest rates and bunker swap gains.
TEN operated an average number of 47 vessels in the third quarter of 2009 compared to 44 vessels in the same period of last year.
NINE MONTH RESULTS
Revenues, net of voyage expenses and commissions, were $277.52 million in the first nine months of 2009 from $386.67 million in the same period in 2008. TEN operated on average 46.3 ships as compared with 43.7 in 2008. Time charter equivalent per ship, per day was $23,819 compared to $34,890 while operating expenses per ship per day fell to $8,655 from $9,373, a 7.7% reduction. General and administrative expenses were modestly reduced, from $3.16 million to $3.15 million while management fees rose in line with fleet expansion and contractual fee increases. Stock compensation expense fell to $0.66 million from $4.25 million in the nine month period of 2008.
Interest and finance costs, net of interest income, decreased to $34.03 million from $45.81 million in 2008. This was mainly due to the impact of lower interest rates and bunker swap gains. Depreciation and drydocking amortization costs rose to $75.75 million from 2008's cost of $66.43 million as a result of fleet expansion.
Net income in the first nine months of 2009, which did not include capital gains, was $45.34 million compared to $140.75 million from operations in the 2008 period (excluding $34.57 million of capital gains). Diluted EPS for the first nine months of 2009 (no capital gains) were $1.22, while the first nine months of 2008 had diluted EPS from operations of $3.69 (net of $0.91 cents from capital gains).
"The profits and cash flow for the first nine months were generated in the most hostile economic climate in modern times," stated D. John Stavropoulos, Chairman of The Board. He continued, "TEN's balanced employment strategy and cost containment programs produced lower but positive results which compared very favorably with its peer group. We are very proud of our management team and its navigational skills."
SUBSEQUENT EVENTS - OTHER
TEN has agreed to the sale of the 2002-built suezmax tanker Pentathlon to an independent third party with the option to acquire a sister suezmax for the same price. Any capital gains from these sales will be recorded in the actual quarter of delivery. The Pentathlon is expected to be delivered to its new owners in mid-November upon completion of its current voyage. Pentathlon's charter extension as announced on September 15, 2009 will remain intact and Alaska, a 2006-built suezmax currently operating in the spot market, will act as a replacement for the remainder of the charter. Should the buyers exercise their second purchase option, the delivery of that vessel would occur in the first quarter of 2010.
In view of the above and in an effort to maintain a young fleet profile, the Company signed two contracts with Sungdong yard in South Korea for the construction of two suezmaxes to be delivered in the third quarter of 2011.
On October 20, 2009, TEN announced a two year time charter with profit sharing for the suezmax tanker Euronike to an international oil major. With this charter and the subsequent redeployment of the Alaska and the Pentathlon charter, all of TEN's suezmaxes are employed in medium to long period charters. This charter brought the total number of vessels renewed this year to eight.
FLEET STRATEGY & OUTLOOK
Tankers experienced one of the most challenging periods since 2002 due to a confluence of events that abruptly halted one of the most prolonged tanker rallies in history. For companies with a long history in shipping and experience in navigating market cycles, this development was not entirely unexpected and not necessarily unwelcome. Weak markets create opportunities and allow companies with solid foundations to take advantage of market troughs. TEN's long stated policy to maintain a modern and diversified fleet with a balanced employment policy to first class end-users has been the catalyst for the Company's stability and continuous success. The cyclical nature of the shipping markets is implicit to the industry and TEN strives to position herself in order to minimize potential adverse effects.
As a result, cash preservation continued to be at the forefront of the Company's agenda. A strong cash position enables TEN to evaluate attractive growth opportunities and to reward its shareholders with a healthy dividend. It is management's intention to continue maintaining a healthy cash position going forward.
Since the third quarter of last year, TEN's fleet expanded by four aframax vessels which increased the fleet's total deadweight from 4.7 million to 5.1 million. Operating days expanded accordingly while fleet utilization, despite rescheduling six dry-dockings of 2010 to 2009, to allow for more earning days when markets may normalize, was still at the highly productive level of 95.7%.
On the chartering front, over the last month, TEN has been successful in chartering five vessels for short-to-medium term employment achieving contract coverage of 60% and 40% of its 2010 and 2011 operating days under contract, respectively. The gross revenues expected from these contracts and assuming vessels under profit sharing agreements only at the minimum rates amount to approximately $305 million. Management will endeavor to further increase contract coverage going forward while maintaining through profit sharing agreements the flexibility to share into the potential market upside.
"It is gratifying to report profitable results after going through one of the most challenging quarters in years," stated Mr. Nikolas P. Tsakos, President and Chief Executive Officer of TEN. "Our long stated policy of operating high quality tonnage under various flexible charters to well established oil entities together with profitable sales of second hand vessels, has and will continue to be the cornerstone of our strategy. The recent appetite of first class charters to employ vessels for longer term charters is an encouraging sign. We remain well positioned to successfully navigate weak markets and have a flexible platform in place to capitalize on market upturns. We will continue to look for opportunities to expand our profit generation capacity and provide long term value to our shareholders," Mr. Tsakos concluded.
ABOUT TSAKOS ENERGY NAVIGATION
To date, TEN's pro forma fleet and excluding the sale of the Pentathlon consists of 52 double-hull vessels of 5.6 million dwt and includes two DNA-aframax crude carriers and two suezmax tankers currently under construction totalling 526,000 dwt.
TEN's balanced fleet profile is reflected in 28 crude tankers ranging from VLCCs to aframaxes and 23 product carriers ranging from aframaxes to handysize and one LNG.
TEN's employment profile: --------------------------------------------------------------------- Type of Employment Vessels --------------------------------------------------------------------- Period Employment - Fixed, fixed w/profit share & min max 28 --------------------------------------------------------------------- CoA - market related 2 --------------------------------------------------------------------- Pool - market related 6 --------------------------------------------------------------------- Spot - market related 12 --------------------------------------------------------------------- TEN's current newbuilding program: --------------------------------------------------------------------- Aframax DWT Hull Type / Design Delivery --------------------------------------------------------------------- 1. Sapporo Princess 105,000 DH / DNA Q1 2010 --------------------------------------------------------------------- 2. Uraga Princess 105,000 DH / DNA Q3 2010 --------------------------------------------------------------------- 3. S2034 158,000 DH Q3 2011 --------------------------------------------------------------------- 4. S2035 158,000 DH Q3 2011 --------------------------------------------------------------------- DH: Double Hull DNA: Design New Aframax
FORWARD-LOOKING STATEMENTS
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. TEN undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.
TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES
Selected Consolidated Financial and Other Data (Unaudited)
(In Thousands of U.S. Dollars, except share and per share data)
Three months ended Nine months ended
STATEMENT OF September 30 September 30
INCOME DATA 2009 2008 2009 2008
---------- ---------- ---------- ----------
Voyage revenues $ 106,202 $ 158,834 $ 346,694 $ 466,987
---------- ---------- ---------- ----------
Commissions 3,677 6,045 13,009 17,061
Voyage expenses 19,743 28,435 56,165 63,258
Charter hire expense -- 4,186 -- 12,467
Vessel operating
expenses 34,381 34,941 107,162 104,772
Depreciation 24,116 21,256 70,389 62,606
Amortization of
deferred dry-docking
costs 1,787 1,165 5,360 3,827
Management fees 3,345 2,988 9,892 8,888
General and
administrative
expenses 796 1,053 3,152 3,158
Stock compensation
expense 467 1,157 660 4,246
Foreign currency
losses/(gains) 189 (158) 245 592
Amortization of
deferred gain on
sale of vessels -- 950 -- (634)
Gain on sale of
vessels -- -- -- (34,565)
---------- ---------- ---------- ----------
Total expenses 88,501 102,018 266,034 245,676
---------- ---------- ---------- ----------
Operating income 17,701 56,816 80,660 221,311
Interest and finance
costs, net (15,985) (17,185) (37,136) (51,929)
Interest income 642 2,108 3,106 6,120
Other, net (107) 15 80 116
---------- ---------- ---------- ----------
Total other expenses,
net (15,450) (15,062) (33,950) (45,693)
---------- ---------- ---------- ----------
Net income 2,251 41,754 46,710 175,618
Less: Net income
attributable to
the noncontrolling
interest (140) (771) (1,374) (301)
---------- ---------- ---------- ----------
Net Income
attributable to
Tsakos Energy
Navigation Ltd. $ 2,111 $ 40,983 $ 45,336 $ 175,317
========== ========== ========== ==========
Earnings per share,
basic $ 0.06 $ 1.09 $ 1.23 $ 4.64
Earnings per share,
diluted $ 0.06 $ 1.08 $ 1.22 $ 4.60
Weighted average
number of shares
outstanding
Basic 36,904,366 37,616,515 36,953,082 37,744,030
Diluted 37,163,512 38,026,595 37,192,689 38,143,274
BALANCE SHEET DATA Sept. 30 Dec. 31 Sept. 30
2009 2008 2008
---------- ---------- ----------
Cash and cash equivalents 270,348 312,169 368,328
---------- ---------- ----------
Current assets, including cash 334,678 370,781 436,334
Investments 1,000 1,000 1,000
Financial instruments, net of
current portion 1,933 -- --
Advances for vessels under
construction 42,366 53,715 96,338
---------- ---------- ----------
Vessels 2,597,914 2,468,472 2,247,098
Accumulated Depreciation (383,372) (312,983) (290,127)
---------- ---------- ----------
Vessels' Net Book Value 2,214,542 2,155,489 1,956,971
Deferred charges, net 18,588 21,332 18,224
---------- ---------- ----------
Total assets $2,613,107 $2,602,317 $2,508,867
========== ========== ==========
Current portion of long-term debt 107,128 91,805 67,935
---------- ---------- ----------
Current liabilities, including
current portion of long term debt 214,997 189,488 200,293
Long-term debt, net of current
portion 1,423,804 1,421,824 1,341,517
Financial instruments, net of
current portion 49,541 75,890 26,078
Total stockholders' equity 924,765 915,115 940,979
---------- ---------- ----------
Total liabilities and
stockholders' equity $2,613,107 $2,602,317 $2,508,867
========== ========== ==========
Three months ended Nine months ended
OTHER FINANCIAL DATA September 30 September 30
2009 2008 2009 2008
--------- -------- --------- ---------
Net cash from
operating
activities $ 20,284 $ 74,166 $ 93,900 $ 208,647
Net cash (used in)/
from investing
activities $(114,164) $(17,683) $(118,092) $ 14,115
Net cash (used in)/
from financing
activities $ 55,564 $ 7,549 $ (17,629) $ (35,881)
TCE per ship per day $ 21,116 $ 33,732 $ 23,819 $ 34,890
Operating expenses
per ship per day $ 8,121 $ 9,243 $ 8,655 $ 9,373
Vessel overhead
costs per ship
per day $ 1,066 $ 1,284 $ 1,083 $ 1,361
--------- -------- --------- ---------
9,187 10,527 9,738 10,734
FLEET DATA
Average number of
vessels during
period 47.0 44.0 46.3 43.7
Number of vessels
at end of period 48.0 44.0 48.0 44.0
Average age of fleet
at end of period Years 6.6 6.1 6.6 6.1
Dwt at end of period
(in thousands) 5,133.0 4,711.0 5,133.0 4,711.0
Time charter
employment - fixed
rate Days 1,121 1,063 3,224 3,258
Time charter
employment -
variable rate Days 1,639 2,110 5,496 6,401
Period employment
(pool and coa) at
market rates Days 610 359 1,404 1,050
Spot voyage
employment at
market rates Days 768 361 2,188 941
--------- -------- --------- ---------
Total operating
days 4,138 3,893 12,312 11,650
Total available
days 4,324 4,048 12,650 11,975
Utilization 95.7% 96.2% 97.3% 97.3%
TCE represents voyage revenue less voyage expenses. Commission is not
deducted.
Operating expenses per ship per day exclude the two chartered-in
vessels (in 2008) and the vessel bare-boat chartered out.
Vessel overhead costs include Management fees, General &
Administrative expenses, Management incentive award, and Stock
compensation expense.