SECOND QUARTER 2009 HIGHLIGHTS * Net revenues of $88.60 million versus $146.64 million in Q2 2008 * Net income of $18.77 million versus $69.21 million in Q2 2008 * EPS of $0.51 per share (diluted) versus $1.82 for Q2 2008 * Semi-annual dividend of $0.85 per share paid in April 2009 (bringing the total for fiscal 2008 to $1.75, up from $1.725 in fiscal 2007) * 14% reduction in vessel daily operating expenses FIRST HALF 2009 HIGHLIGHTS * Net revenues of $194.74 million versus $262.31 million in the first half of 2008 * Net income of $43.23 million versus $134.34 million (including a $34.57 million capital gain) in the 2008 period * EPS of $1.16 per share (diluted) versus $3.52 for the first half of 2008 * Three year extension of time-charter of suezmax tanker Triathlon, from seven years to ten * Acquired and retired 237,700 shares for an average price of $16.59, a $3.9 million investment
ATHENS, Greece, Aug. 5, 2009 (GLOBE NEWSWIRE) -- Tsakos Energy Navigation Limited (TEN or the "Company") (NYSE:TNP) today reported results (unaudited) for the second quarter and first half of 2009.
SECOND QUARTER RESULTS
Revenues, net of voyage expenses and commissions, were $88.60 million in the second quarter of 2009 compared to $146.64 million in the comparable 2008 period reflecting the lower freight rate environment. TEN deployed on average 46.0 vessels versus 44.0 vessels in the prior year quarter. Fleet utilization remained high at 97.8% as compared with 97.4% in the second quarter of 2008. The average daily time charter equivalent rate per day, per vessel was $22,890 down from $39,512 in the 2008 quarter. Vessel operating costs were $8,514 per ship, per day, down 14% from $9,898 primarily due to lower crew costs, a result of a stronger US dollar against the Euro, and reduced repair expenditure given fewer vessel dry dockings, although higher insurance costs were incurred.
Depreciation and dry-docking amortization costs rose to $25.06 million from $22.03 million. Management fees increased in line with the larger fleet size and the 2009 fee increase, while G&A expenses were 20% down, partly as a result of a stronger US dollar. Stock compensation amortization was considerably reduced due to fewer grants outstanding and a lower share price.
Interest and finance costs net of interest income fell to $4.91 million from $9.08 million reflecting the reduction in interest rates, positive movements in interest rate swap valuations and positive movements in bunker swaps of $3.0 million included in interest and finance costs. Interest income was $1.13 million in the quarter compared to $1.82 million in the prior year quarter.
Net income in the 2009 period was $18.77 million versus $69.21 million in the second quarter of 2008. Diluted earnings per share were $0.51 versus $1.82 in the second quarter of 2008.
FIRST HALF RESULTS
Revenues, net of voyage expenses and commissions, were $194.74 million in the first six months of 2009, down from $262.31 million in the 2008 period reflecting the lower freight rate environment. TEN operated on average 46.0 vessels as compared with 43.6 a year earlier. TCE per vessel, per day decreased to $25,187 from $35,354 while operating expenses declined to $8,932 from $9,439. General and administrative expenses increased to $2.36 million from $2.11 million in the same period last year. Management fees rose in line with fleet expansion and contractual fee increases.
Interest and finance costs, net of interest income, decreased to $18.69 million from $30.73 million in the first half of 2008 due to reduced interest rates, positive interest rate swap valuations and a positive impact of bunker swap movements. Depreciation and drydocking amortization costs rose to $49.85 million from $44.01 million as a result of fleet expansion. G&A expenses were slightly increased over the previous first half year, but stock compensation expenses decreased to $0.19 million from $3.09 million.
Net income in the first half of 2009 reached $43.23 million compared to net income of $134.34 million in the corresponding 2008 period which included a gain on vessel sale of $34.6 million. Diluted earnings per share for the first half of 2009 were $1.16, while diluted earnings per share for the first six months of 2008 were $3.52.
"The rebound from the financial panic and the ensuing collapse of economies around the world has been and will be tedious. The impact on oil demand has been a severe drag on the tanker industry," observed D. John Stavropoulos, Chairman of the Board. He added, "The ability to operate profitably in such an environment verifies TEN's strategies and policies."
SUBSEQUENT EVENTS
In early July, the 2007-built suezmax tanker Arctic was fixed on a three-year time charter to a major South American oil company with a fixed minimum daily rate and a 50:50 profit share to a maximum pre-agreed level. Assuming only the minimum rate, this charter is expected to generate at least $25 million in gross revenues.
In late July, the 2006-built aframax product tanker Promitheas entered a time charter, up to six months, at a fixed rate to a major international oil trading company. The vessel was operating in the spot market.
On July 17, TEN took delivery of the Ise Princess, the fifth DNA-design aframax tanker in a series of eight from Sumitomo Heavy Industries in Japan. Upon delivery, the vessel entered an up to four month redelivery time charter to the Mid-Atlantic basin.
In late July 2009, TEN signed contracts for the construction of two suezmax tankers at the Sungdong shipyard in South Korea for delivery in the third quarter of 2011 for a price well below the highs established in 2008. The vessels are expected to be financed by a combination of bank debt and cash equity.
FLEET STRATEGY & OUTLOOK
In the second quarter, the turmoil and uncertainty prevailing in the global economy continued to impact the shipping markets. In this context, rates experienced prolonged downward pressures with welcome short-term lifts. The reduction in global oil demand and the effect of above average global oil inventories contributed to this softness.
In this world of uncertainty, TEN produced again results that validate its prudent strategy in terms of fleet deployment and operations and highlight its healthy financial foundation. As a result of this strategy, the Company's cash reserves rose to $309 million in the second quarter of 2009, an increase from last year. Cash preservation especially in times of global economic uncertainty has become the Company's cornerstone as it not only safeguards TEN from prolonged market pressures, should they occur, but also provides it with significant fire power to take advantage of opportunities that might arise either in the second hand or newbuilding market.
Looking ahead, signs of recovery in our markets will eventually occur as the world economies gradually start to rebound, as many analyst and market commentators predict. On the chartering front, such evidence starts to become apparent as charterers are beginning to reevaluate longer term time charters. TEN will continue to explore all available options for the chartering of its vessels and will strive to further increase the fixed employment of the fleet going forward. As of the third quarter 2009, TEN had 66% of remaining operating days under fixed employment and 44% for 2010. Without taking into consideration the potential additional revenues from profit-sharing arrangements in place and assuming only the minimum rates for the remaining operating days in 2009, TEN expects to earn at least $128 million in incremental gross revenues. For 2010, based on the same assumptions, the minimum gross revenue already secured is estimated at $170 million.
"In the challenging environment of this second quarter, TEN proved resilient to market pressures and the quality of our fleet continued to be in high demand from major oil companies as evidenced by our recent charters," Mr. Nikolas P. Tsakos, President & CEO of TEN, stated. "With expected improvements in the world economy during 2010, global oil demand should begin to show signs of recovery and our modern, versatile fleet, including our two recent newbuilding orders, will be well positioned to take advantage of the improvements. Our objective remains to operate the fleet with the highest possible utilization rate, efficiently, cost effectively and profitably," Mr. Tsakos concluded.
Conference Call
As previously announced, today, Wednesday, August 5th at 10:00 a.m. Eastern Time, TEN will host a conference call to review the results as well as management's outlook for the business. The call, which will be hosted by TEN's senior management, may contain information beyond what is included in the earnings press release.
To participate in the call from the United States or Canada, please dial +1.888.694.4702 approximately five minutes prior to the starting time. To participate in the call outside the United States or Canada, please dial +1.973.582.2741 five minutes prior to the starting time. The Conference ID is 2175 9049.
Two hours after the completion of the conference call, a digital recording of the call will be available for seven days, and can be accessed by dialing +1.800.642.1687 from inside the United States or Canada and +1.706.645.9291 from outside the United States or Canada and entering the Conference ID 2175 9049.
The call, which will be simultaneously broadcast live over the Internet, can be accessed at: http://www.videonewswire.com/event.asp?id=60858. The online archive of the broadcast will be available within one hour of the live call at the same web address.
ABOUT TSAKOS ENERGY NAVIGATION
TEN's pro forma fleet consists of 52 vessels of 5.6 million dwt. TEN's operational fleet consists of 47 vessels all of double-hull design. TEN's newbuilding program includes three DNA-aframax crude carriers and two suezmax tankers totaling about 615,000 dwt.
TEN's balanced fleet profile is reflected in 27 crude tankers ranging from VLCCs to aframaxes and 24 product carriers ranging from aframaxes to handysize, complemented by one LNG.
TEN's employment profile:
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Type of Employment Vessels
-----------------------------------------------------------------
Period Employment - Fixed, fixed w/profit share & min max 33
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CoA - market related 2
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Pool - market related 3
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Spot - market related 9
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TEN's current newbuilding program:
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Hull Type /
Aframax DWT Design Delivery
-----------------------------------------------------------------
1. Asahi Princess 105,000 DH / DNA Q4 2009
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2. Sapporo Princess 105,000 DH / DNA Q1 2010
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3. Uraga Princess 105,000 DH / DNA Q2 2010
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4. S2034 158,000 DH Q3 2011
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3. S2035 158,000 DH Q3 2011
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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 Six months ended
June 30 June 30
STATEMENT OF
INCOME DATA 2009 2008 2009 2008
---------- ---------- ---------- ----------
Voyage revenues $ 114,180 $ 171,409 $ 240,491 $ 308,153
---------- ---------- ---------- ----------
Commissions 4,245 6,506 9,332 11,016
Voyage expenses 21,334 18,262 36,422 34,824
Charter hire expense -- 4,141 -- 8,281
Vessel operating
expenses 34,879 37,036 72,780 69,829
Depreciation 23,272 21,023 46,273 41,350
Amortization of
deferred dry-docking
costs 1,789 1,005 3,573 2,662
Management fees 3,274 2,988 6,547 5,900
General and
administrative
expenses 896 1,113 2,356 2,105
Stock compensation
expense 147 1,745 193 3,089
Foreign currency
losses 257 318 56 749
Amortization
of deferred
gain on sale
of vessels -- (792) -- (1,584)
Gain on sale
of vessels -- -- -- (34,565)
---------- ---------- ---------- ----------
Total expenses 90,093 93,345 177,532 143,656
---------- ---------- ---------- ----------
Operating income 24,087 78,064 62,959 164,497
Interest and finance
costs, net (6,045) (10,906) (21,151) (34,744)
Interest income 1,133 1,823 2,464 4,012
Other, net 79 (48) 187 101
---------- ---------- ---------- ----------
Total other
expenses, net (4,833) (9,131) (18,500) (30,631)
---------- ---------- ---------- ----------
Net income 19,254 68,933 44,459 133,866
Less: Net
(income)/loss
attributable
to the
noncontrolling
interest (482) 273 (1,234) 469
---------- ---------- ---------- ----------
Net Income attributable
to Tsakos Energy
Navigation Ltd. $ 18,772 $ 69,206 $ 43,225 $ 134,335
========== ========== ========== ==========
Earnings per
share, basic $ 0.51 $ 1.84 $ 1.17 $ 3.55
Earnings per share,
diluted $ 0.51 $ 1.82 $ 1.16 $ 3.52
Weighted average
number of shares
outstanding
Basic 36,908,326 37,686,262 36,977,844 37,808,488
Diluted 37,152,243 38,018,386 37,217,103 38,120,119
BALANCE SHEET DATA June 30 Dec. 31 June 30
2009 2008 2008
----------- ----------- -----------
Cash and cash equivalents 308,664 312,169 304,296
----------- ----------- -----------
Current assets,
including cash 371,065 370,781 375,855
Investments 1,000 1,000 1,000
Financial instruments,
net of current portion 2,217 -- --
Advances for vessels
under construction 56,114 53,715 80,837
Vessels 2,470,002 2,468,472 2,246,908
Accumulated
Depreciation (359,256) (312,983) (268,871)
----------- ----------- -----------
Vessels' Net Book Value 2,110,746 2,155,489 1,978,037
Deferred charges, net 17,790 21,332 17,274
----------- ----------- -----------
Total assets $ 2,558,932 $ 2,602,317 $ 2,453,003
=========== =========== ===========
Current portion of
long-term debt 99,745 91,805 59,885
----------- ----------- -----------
Current liabilities,
including current
portion of
long-term debt 194,180 189,488 153,010
Long-term debt, net of
current portion 1,376,727 1,421,824 1,332,778
Financial instruments,
net of current portion 48,751 75,890 20,671
Total stockholders'
equity 939,274 915,115 946,544
----------- ----------- -----------
Total liabilities and
stockholders' equity $ 2,558,932 $ 2,602,317 $ 2,453,003
=========== =========== ===========
Three months ended Six months ended
OTHER FINANCIAL DATA June 30 June 30
2009 2008 2009 2008
--------- --------- --------- ---------
Net cash from
operating
activities $ 22,215 $ 65,599 $ 73,411 $ 134,483
Net cash (used
in)/from
investing activities $ (2,355) $ (2,991) $ (3,928) $ 31,798
Net cash (used
in)/from
financing activities $ (49,168) $ (50,414) $ (72,988) $ (43,432)
TCE per ship per day $ 22,890 $ 39,512 $ 25,187 $ 35,354
Operating expenses per
ship per day $ 8,514 $ 9,898 $ 8,932 $ 9,439
Vessel overhead costs
per ship per day $ 1,031 $ 1,460 $ 1,092 $ 1,400
--------- --------- --------- ---------
9,545 11,358 10,025 10,839
FLEET DATA
Average number of
vessels
during period 46.0 44.0 46.0 43.6
Number of vessels at
end of period 46.0 44.0 46.0 44.0
Average age of
fleet at
end of period Years 6.6 5.8 6.6 5.8
Dwt at end
of period
(in thousands) 4,922.0 4,711.0 4,922.0 4,711.0
Time charter
employment -
fixed rate Days 1,001 1,136 2,103 2,195
Time charter
employment -
variable rate Days 1,788 2,163 3,857 4,291
Period employment
(pool and coa)
at market rates Days 463 327 794 691
Spot voyage
employment
at market rates Days 844 273 1,420 580
--------- --------- --------- ---------
Total operating
days 4,096 3,899 8,174 7,757
Total available
days 4,186 4,004 8,326 7,927
Utilization 97.8% 97.4% 98.2% 97.9%
TCE represents voyage revenue less voyage expenses. Commission is not
deducted.
Operating expenses per ship per day exclude the two chartered-in
vessels and the vessel bare-boat chartered out.
Vessel overhead costs include Management fees, General &
Administrative expenses, Management incentive award, and Stock
compensation expense.