Q1 2024 Tsakos Energy Navigation Ltd Earnings Call

Operator: Thank you for standing by, ladies and gentlemen, and welcome to TAKO's Energy Innovation Conference.

But I think about that.

Yeah.

Speaker Change: Thank you for standing by ladies and gentlemen, and welcome to Tacos near all of our conference call.

Operator: on the first quarter 2024 financial results. We have with us today Mr. Takis Arapologou, Chairman of the Board, Dr. Nikolas Tsakos, President and CEO, Mr. Paul Durham, Chief Financial Officer, and Mr. George Saroglou, Chief Operating Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. Sorry, Bornozis. President of Capital Link, Investor Relations Advisor for Tsakos Energy Navigation.

Speaker Change: On the first quarter 'twenty 'twenty four financial results, we have with US today, Mr. Hockey's Arab Pogo Chairman Board.

Speaker Change: A doctor or Nikolas, Tsakos, President and CEO, Mr. Paul Durham, Chief Financial Officer, and Mr. George Sarah Glu, Chief operating officer at the company at this time all participants are in a listen only mode there'll be a presentation followed by a question and answer session.

Speaker Change: At which time if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced I must advise you. This conference is being recorded today I will now pass the floor over to Nicholas <unk>.

Speaker Change: Oh, sorry, born out of this.

Speaker Change: President of capital Link Investor Relations advisor for Hello Navigation. Please go ahead Sir.

Nicolas Bornozis: Thank you very much and good morning to all of our participants. I am Nikolas Bornozis of Capitalink, Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the first quarter ended March 31st, 2024. If you do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at sen@capitalink.com, and we will have a copy for you emailed right away. Please note that parallel to today's conference call, there is also a live audio and slide webcast which can be accessed on the company's website on the front page at www.tenn.gr.

Speaker Change: Thank you very much and to all of our participants I am Nicolas bought notice of capital Inc.

Speaker Change: The rest of our lives advisor to Tsakos energy navigation.

Speaker Change: This morning, the company publicly released its financial results for the first quarter ended March 31st 2024.

Speaker Change: If you do not have a copy of today's earnings release, please call us at 212.

Speaker Change: 6617566.

Speaker Change: Or email us at <unk>.

Speaker Change: Selling dot com and we will have a copy for you right away.

Nicolas Bornozis: The conference call will follow the presentation slide, so please, we urge you to access the presentation slide on the company's website. Please note that the slides of the webcast presentation will be available and archived on the company's website after the conference call. Also, please note that the slides of the presentation, the webcast, are user-controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own.

Speaker Change: Please note that bothered with todays conference call. There is also a live audio and slide webcast, which can be accessed on the company's website on the front page at Www Dot T E N.

Speaker Change: G R E.

Speaker Change: Conference call will follow the presentation slides. So please we urge the drug.

Speaker Change: The presentation slides on the company's website.

Speaker Change: Please note that the slides of the webcast presentation will be available at an archive on the website of the company. After the conference call also please note that the.

Speaker Change: The slides of the presentation of the webcast are user controlled and that means that by clicking on the appropriate button you can move to the next or to the.

Speaker Change: Previous slide on your own.

Nicolas Bornozis: At this time, I would like to read the Safe Harbor Statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the Safe Harbor Provision of the Private Security Litigation Reform Act of 1995. Investors are concerned that such forward-looking statements involve risks and uncertainties which may affect TEM's business prospects and results of operations.

Speaker Change: At this time I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contain certain forward looking statements within the meaning.

Nicolas Bornozis: And before turning the floor over to the chairman, I'd like to mention that we also have today with us, as part of the management team, Mr. Harris Kosmatos, the Co-Chief Financial Officer. Congratulations, Mr. Kosmatos, on your new role. And at this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Please go ahead, si

Speaker Change: Safe Harbor provision of the private Securities Litigation Reform Act of 1995 investors are cautioned that such forward looking statements involve risks and uncertainties, which may affect ten's business prospects and results of operations and before turning the floor over to the chairman I'd like to mention that we also have to deal with us.

Speaker Change: As part of the management team the Chicago School Mottos, the co Chief Financial Officer, and congratulation to cycles, not just for the new role.

Speaker Change: And at this moment I would like to pass the floor to Ms without Apple glue, the Paramount of chocolate and it's gonna be Tucson. Please go ahead Sir.

Takis Arapologou: Thank you, Nicolas. Good morning and good afternoon to all.

Speaker Change: Thank you Nicolas good morning, and good afternoon to all.

Takis Arapologou: And thank you again for joining our call today for Q1 results. Despite, as you've seen, a historically low utilization of 91% just over, mainly due to a large number of dry docking that we decided to do. We continue to deliver operational excellence on the back of a very positive market, based on strong shipping fundamentals and geopolitical events, which are both expected to continue in the foreseeable future are very comfortable, and Nicolas Bornozis.

Speaker Change: And thank you again for joining our call today for the Q1 results.

This despite as you've seen historically low utilization of 91% just over mainly due to a large number of dry dockings that Oh, we decided to do we continue to deliver operational excellence.

Speaker Change: On the back of a very positive market based on strong shipping fundamentals and geopolitical events.

Speaker Change: Which are both expected to continue in the foreseeable future our Verdi.

Speaker Change: Comfortable.

Speaker Change: Equity generating ability and cash position allows us to double our semiannual dividend from from last years.

Takis Arapologou: In addition, we are mainly making use of the good market, and we're using opportunities in the S&P side of the business to sell old tonnage and buy new modern green vessels, reducing the age of our fleet and positioning ourselves to capture creative business that comes our way from a demanding blue chip client. The result of all this is the steady increase in our stock price in recent months as the market... recognizes our robust business model, and this makes us very happy. So, once again, well-deserved congratulations to Nikos Tsakos and his team, and best wishes for maintaining TEN's stellar performance going forward. Thank you, and over to you, Nikolas Tsakos.

Speaker Change: In addition, we have we are mainly.

Speaker Change: Making use of all the good market and we are using opportunities in the S&P side of the business to sell all the tonnage and buy new modern green vessels, reducing the age of our fleet.

Speaker Change: And positioning ourselves to capture accretive business that comes our way.

Speaker Change: From a demanding blue chip clients.

Speaker Change: [laughter].

Speaker Change: The result of all this is the steady increase of our stock price in recent months as the market.

Speaker Change: Recognizes how robust business model and this makes us very happy.

Speaker Change: So once again, well deserved congratulations to Nikos tsakos and his team and best wishes for maintaining tens stellar performance going forward.

Speaker Change: Thank you and over to you Niko tsakos.

Nikolas P. Tsakos: get 10, we will finally be 10, after almost 22 years where our ticker belongs to another company which, right now, has moved from the stock exchange. I see this as a good sign, although the previous ticker, which took us from $3 in change in 2019 to in excess of $30 last month, was my initials. But I would rather sacrifice my initials for much closer identification for the company.

Nikolas P. Tsakos: Thank you. Thank you. Thank you chairman and yeah, that's what where we're going to have a huge.

Nikolas P. Tsakos: Digger, starting as of July 1st week, we wouldn't get there.

Speaker Change: Then when you finally be 10 after a almost a 2022 years.

Speaker Change: Where our ticker belong to another.

Speaker Change: Company, which right now has the has moved from there still could change a lot.

Speaker Change: I see this as a good sign there although the preview was stinker, which took us from $3 and change in 2019 too.

Speaker Change: Third the last month, what my initials, but are there other sacrifice.

Speaker Change: I need to underscore.

Nikolas P. Tsakos: As you said, the first quarter, which has been a strong out of service to prepare them for better days, we looked at ships, prepared them for sails, and, of course, we took delivery of a very large number of ships and, at the same time, we were able to increase our... Our cash position, looking at it today, we're way above $450 million, approaching half a billion dollars in liquidity as we finish the second quarter. And we're expecting a much better quarter, although I have to say that even the first quarter was a very healthy quarter, but we're looking at a much better quarter.

Speaker Change: Much closer identification.

Speaker Change: For the company.

Speaker Change: As you said, the first order or who has been in the.

Speaker Change: Strong profitable quarter.

Speaker Change: As a springboard.

Speaker Change: Well, that's what the eye.

Speaker Change: We are there to do it took a little more vessels.

Speaker Change: Out of service to prepare them for the better days are we looked at Simpson.

Speaker Change: And prepare them for sales and of course, we took delivery of a very large troubled 14 vessels, which are a very large number of ships and at the same time, we were able to increase our oh gosh position or looking at it today, we are way above our 450 million approaching that.

Speaker Change: Half a million dollars in liquidity as we were finishing.

Speaker Change: The second quarter and we're expecting go.

Speaker Change: It much better court, there Oh, although I have to say that even in the first quarter was already Celtic.

Speaker Change: We're looking at a much better quarter, we're already at the latter part of the second quarter. So I can see a much better quarter coming in the third and fourth quarter will have the whole tonnage into action and I think we want to see even better time, so looking for a record year.

Nikolas P. Tsakos: We're already at the latter part of the second quarter, so I can see a much better quarter coming. And in the third and fourth quarters, when we'll have the whole tonnage in action, I think we will see even better times. So looking for a record year for 2024, as we did last year, what makes us very positive is the unprecedented, in my 30 plus year history in the business, unprecedented demand by the major oil companies for any quality asset that is out there.

Yeah for 'twenty, 'twenty, one and Florida as we did last year.

Speaker Change: What makes us a.

Speaker Change: Very positive is the presented in my said the 30 year sort of implies here.

Speaker Change: He was studio for it in the business I'm presented in demand by the major oil companies for or any quality asset.

Speaker Change: That is out there and I mean, we get calls in and we deal only with a major oil companies and their first class end users or government bodies.

Nikolas P. Tsakos: We get calls and we deal only with the major oil companies and their first class end users or government bodies and the calls we get even during the festive time of Posidonia which we're all recovering still down in Greece in the last couple of weeks. We are getting, we were cornered at any time and asked to provide our tonnage for long term employment. It's a good situation. It's not always have been that way although 10 has fared well even at times when people, Looking forward, it seems that the stars are aligned for this period of time, as long as our industry, other than the LNG segment which I would say is the only grossly overbuilt side of the business with 60% of the order book out there, every other aspect of our business, any other segment of the energy business is well balanced and we're ordering ship in some segments that there is not any growth, and With that, yes, please, I will ask George to give us a more detailed development.

Speaker Change: And of course, we get the even during the festive time of pushing done yet, which we're only recovering student down in Greece in the last couple of weeks and we are getting Oh, we will coordinate that anytime and that's to provide our tenants with long term employment rates are good.

Speaker Change: The situation is not there always have been that way all the time has passed for the one leaving at the times when people do not want to see any wild Zips and I I believe we will see this on.

Speaker Change: But trade on our Oh, no surprise in that.

Speaker Change: This has been the most active period in the last five years I I couldn't I can't recall, a commercially for that for that business and again I want to thank our men and women are onboard the ships because they by keeping the propellers running they make things happen and they gave us the opportune.

Speaker Change: Anything to share with a long contracts and are another and of course our people.

Speaker Change: On London and not offices.

Speaker Change: Looking as I said looking forward. It seems that the stars are aligned so for this period of time as long as our industry other than the LNG segment, which I would change the only no grossly over build.

Speaker Change: The business with 60% of all for the order book out there every other aspect of our business and the other segment of the energy business is is well balanced and some some and we're all getting simpler in some segments that are there is no no.

Speaker Change: Any growth.

Speaker Change: And.

Speaker Change: With that yes, please I will ask George to give us a more detailed developments.

George V. Saroglou: Thank you very much, Nikos, and good morning to all of you joining our earnings call today. 2024 continues to be another good year for tankers, as the factors that have elevated freight rates in the last two years since 2002 continue. Key takeaways for TEN during the first quarter of 2024, which was one of the busiest quarters in TEN's history, as far as fleet renewal and volume of S&P transactions are concerned. First of all, we took delivery of the company's last two dual-fuel LNG-powered Aframax tankers in a series of four new buildings that were built against long-term employment for a major energy concern. We started taking delivery of the first in a series of five high-spec, environmentally-friendly tankers from Viking. The delivery of the remaining four took place during the second quarter of 2024.

Speaker Change: Thank you. Thank you Mike Thank you very much nikos.

Speaker Change: Good morning to all of you joining our earnings call today.

Speaker Change: 'twenty 'twenty four continues to be another good year for tankers.

Speaker Change: How does the factors.

The freight rates in the last three years since 2002 continue.

Speaker Change: Keep takeaways for 10 during the first quarter of 'twenty four.

Speaker Change: Which was one of the busiest quarters intense history, thus far split rate and volume of S&P transactions Ah is concerned.

Speaker Change: First of all we took delivery of the company's last two dual fuel LNG powers Aframax tankers.

Speaker Change: Cities are for new buildings.

Speaker Change: We're built against long term unemployment to a major energy can sir.

Speaker Change: We started taking delivery of the first in a series of five high spec and environmentally friendly tankers from weekend.

Speaker Change: Delivery of the remaining four took place during the second quarter of 'twenty 'twenty four.

George V. Saroglou: Two of the five tankers are dual-fuel LNG-powered AFRAMAXes. With the four that were purposely built for another client, the company now has six dual-fuel LNG-powered AFRAMAX tankers fully operational. This is one of the largest, if not the largest, concentration of LNG-powered aframaxes.

Speaker Change: Two of the five steinkrauss.

Speaker Change: LNG powered from axis with before that Stan surplus purposely built for another client. The company has now six dual fuel LNG powered aframax tankers fully operational.

This is one of the largest if not the largest concentration of LNG powered from axis.

George V. Saroglou: These six vessels mark TEN's entrance into Green Tankers. At the same time, we continue the sale of all the first generation vessels. Since the start of 2023, we sold 8 tankers that were built between 2005 and 2007. From January of this year, the company took advantage and sold more vessels. We started by announcing the sale of a 2005-built Suezmax tanker in January, and since then, four more vessels have been sold. Another 2005 built Suezmax, two Aframaxes, one built in 2007 and the other in 2008, plus the company's first steam turbine electric vessel built in 2007.

Speaker Change: These six vessels mark dense entrance into green tankers.

At the same time, we continue to sale of older than that first generation vessels.

Speaker Change: Since the start of 'twenty to 'twenty three we sold eight tankers built between 2005 and 2007.

Speaker Change: From January of this year.

Took advantage and shows the motor vessels.

Speaker Change: We started by announcing the sale of a 2005 built suezmax tanker in January and since then for more vessels have been short.

Speaker Change: 2005, built suezmax to offer them access one built in 2007 and 2018.

Speaker Change: Okay.

Speaker Change: Steam turbine.

Speaker Change: In 2007.

George V. Saroglou: In total, since 2023, 13 vessels have been sold with an average age of 17.5 years and have been replaced with 21 vessels that have doubled the deadweight capacity of the vessels that were disposed of at an average age of just one year. Part of the 21-vessel growth initiative is purpose-built vessels to fit existing transportation requirements of the company's long-term clients. Since the start of 2024, we have signed six new building contracts for one shuttle tanker and five LR1 tankers.

Speaker Change: In total since 2023.

Speaker Change: 17 vessels have been sold with an average age of 17 and a half years and had been replaced with 21 vessels that have stopped the deadweight capacity of the vessels that were disposed.

Speaker Change: <unk> just one year.

Speaker Change: Part of the 'twenty one vessel growth initiative is with surplus built new building vessels to fit the existing transportation requirements of the company's long term clients.

Speaker Change: Since the start of 'twenty 'twenty four we have stopped that we have signed six new building contracts for one shuttle tanker and fiber one tankers.

George V. Saroglou: This brings our current new building order book to 12 vessels. The freight market was strong last year and remains strong as we speak. We continue to renew time charters at higher time charter base rates. Oil majors continue to fix vessels forward, which is a testament to a market that is expected to sustain current freight levels. The order book continues to be low due to the uncertainty of the availability and affordability of alternative fuels other than biofuels and LNG currently.

Speaker Change: This brings our new building order book to 12 vessels.

Speaker Change: The freight market was strong last year and remain strong as we speak we continue to renew time charters at higher time charter base rates oil majors continue to fix vessels for work, which is a testament to a market that is expected to sustain current freight levels.

Speaker Change: The order book continues to be low due to the uncertainty of availability and unfold and affordability of alternative fuels other than Biofuels and LNG guidance.

George V. Saroglou: Many yards report availability after 2027. We continue to experience the largest change in trade flows due to ongoing crude and oil product movements as a result of Western sanctions on Russian seaborne oil and, more recently, changes in the crossings in the Red Sea and Suez Canal as a result of the Houthis' attacks on merchant vessels. And, as we have said in previous calls, most of these changes appear to be permanent.

Speaker Change: Many yards reported liability after 2027.

Speaker Change: We continue to experience the largest change in trade flows the ongoing crude and oil product movements as a result of western sanctions on Russia, and seaborne oil and more recently changes in the crossings in the Red Sea and Suez Canal as a result of the Fortis.

Speaker Change: Attacks on merchant vessels.

Speaker Change: And as we have said in previous calls most of these changes appear to be bottoming at.

George V. Saroglou: At the same time, global oil demand continues to grow. 2024 is expected to be another record year for global oil demand. We expect demand to reach approximately 103 million barrels per day versus approximately close to 102 million barrels per day in 2023. Now, we go to the slides of our presentation.

Speaker Change: At the same time global oil demand continues to grow 'twenty 'twenty four is expected to be another record year for global oil demand, we expect demand to reach approximately 103 million barrels per day versus approximately close to 102 million barrels per day in 2023.

Speaker Change: Let's go to the slides of our presentation.

George V. Saroglou: If we start with slide three, we see that since inception in 1993, we have faced five major crises, and each time, the company came out stronger thanks to its operating model. The average company growth is 21% in terms of total dead weight. In slide 4, we see the company's fleet growth and the capital market. Also, on slide 4, we see the fleet and its current employment profile. The slide shows all the five ex-vacant tankers that are now fully integrated and operational.

Speaker Change: If we start with slide state, we see that since inception in 1993, we have faced five major prices and each time the company came out stronger thanks to each operating model.

Speaker Change: The average company growth is 21% in terms of total deadweight ton.

Speaker Change: In slide four we see the company script growth and capital markets.

Speaker Change: And capital.

Four.

Speaker Change: We see the fleet and its current employment.

Speaker Change: Hi.

Speaker Change: Yeah.

Speaker Change: This slide has all the five X vacant anchors is that now fully integrated and operationally we have a pro forma fleet of 62 tankers 29 out of the 62 or 47% of the fleet.

George V. Saroglou: We have a pro-forma fleet of 62 tankers; 29 out of the 62, or 47% of the fleet. For 47% of the fleet in the water, they have market exposure, a combination of spot, COAs, and time charters with profit sharing. 52 of the 62 vessels, or 82%, are in secured contracts, fixed time charters, time charters, and time charters with profit sharing.

Speaker Change: 447% of our fleet in the water have market exposure a combination of spot <unk>.

Speaker Change: <unk> and time charters with profit sharing 52 of the 62 vessels or 82% audience at good contracts fixed time charters.

Speaker Change: Charter and time charters with profit sharing.

George V. Saroglou: This means that TEN is well positioned to continue capturing the positive tanker market fundamentals. In slide 5, we see that companies have flipped growth and capital market access since inception. We raised capital for growth, not at the top of the market, but at times when asset prices were usually low.

Speaker Change: This means that 10 is well positioned to continue capturing the positive tanker market fundamentals.

Speaker Change: In slide number five we see the company's fleet growth and capital market access since inception, we've raised capital for growth.

Speaker Change: Not at the top of the market, but at times when asset prices were usually low.

George V. Saroglou: In the slide, the numbers in the blue boxes represent the company's common share offerings, and in red, the series of preferred share offerings since the company was listed on the New York Stock Exchange. The first three preferred series totaling $188 million in par value, the series B, C, and D, plus a private-placed preferred instrument of $35 million in initial par value, have been fully redeemed, saving the company in excess of $18 million per year in coupon payments for all retired preferred shares.

Speaker Change: In the slides the numbers in the blue boxes represent the company's common share offerings and in Red The series a preferred share offering since our company New York stock exchange listing.

Speaker Change: The first three preferred series totaling $188 million par value the series B C and D plus a private place preferred instrument of 35 million initial par value had been fully redeem saving the company in excess of $18 million per year of coupon payments for all three.

Speaker Change: Diet preferred shares.

Speaker Change: Okay.

George V. Saroglou: In the next slides, we see the company's current and long-term clients. As you can see, we have a blue-chip customer base consisting of all major global energy companies, refineries, and commodity traders, with Equinor currently topping the list as our largest charterer, with 13 vessels, all on long-term charters. In slide 7, the left side presents the all-in breakeven cost for the various vessel types we operate in TEN. Our operating model is simple.

Speaker Change: And the next slides, we see the company's current and long term clients as you see we have a blue chip customer base, consisting of all major global energy companies refineries commodity traders with equity not currently topping the list is our largest charter with 13 vessels all on a long time.

Speaker Change: Charter.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: On slide seven the left side presents the all in breakeven enforced for the various vessel types, we operate in 10.

Speaker Change: Our operating model is simple.

George V. Saroglou: We try to have our time-chartered vessels generate revenue to cover our company's cash expenses. That means paying for the company's vessel operating expenses, finance expenses, overhead, chartering costs, and commissions, and we let revenue from the spot-trading vessels contribute to the profitability of the company. Fleet utilization as a result of the eight vessels undergoing scheduled maintenance and repairs during the first quarter of 2024 was 91.3% versus 96.1% the prior year quarter. And thanks to the profit sharing element, for every $1,000 per day increase in spot rates, this has a positive 14 cents impact on annual EPS based on the number of 10 vessels that currently have exposure in spot rates.

Speaker Change: We'll have our time charter vessels generate revenue to cover our company Scott gas expenses.

Speaker Change: In Spain for the company's vessel operating expenses finance expenses overheads chartering costs and commissions and we let revenue from the spot trading vessels contribute to the profitability of the company.

Speaker Change: Fleet utilization.

Speaker Change: As a result of the eight vessels undergoing scheduled maintenance and repairs. During the first quarter of 2024 was 91, 3% versus 96, 1% the prior to the airport.

Speaker Change: Thanks to the profit sharing element for every $1000 per day increase in spot rates. This has a positive 14 cents impact in annual EPS based on the number of 10 vessels that currently have exposure in spot rates.

George V. Saroglou: Managing debt is an integral part of the company's strategy and capital allocation. The company's debt, as this slide shows, peaked in December of 2016. Since then, we have repaid $250 million of debt and redeemed $211 million in three series of preferred shares plus a privately placed preferred investment. Sail and People's activity is also important.

Speaker Change: Managing that she is an integral part of the company's strategy and capital allocation our company's debt as this slide shows picked in December of 2016.

Speaker Change: Since then we have repaid 250 million deaths and redeemed 211 million in three series of preferred shares shares plus privately placed with us.

George V. Saroglou: It's a cornerstone of TEN's strategy and the resulting fleet modernity, a key element of our operating model. The left side of the slide shows the divestments in tankers since... January 1st, 2023. We sold 13 vessels totaling 1 million deadweight tons, having an average age of 17.5 years. On the right side of the slide, under growth, we have the number of vessels we are currently building and acquiring since the 1st of January, 2023. 21 vessels in total, an eco-friendly, greener tank.

Speaker Change: [noise] sale and purchase activity is also important.

Speaker Change: Cornerstone of 10 strategy and the resulting slipped modality, a key element of our operating model.

Speaker Change: The left side of the slide shows the divestments in tankers since.

Speaker Change: January 1st 2023, we saw 13 vessels totaling 1 million deadweight ton, having an average age of 17.5 years.

Speaker Change: On the right side of the slides and the growth we have the number of vessels. We are currently building and and acquired since.

Speaker Change: The first January 2023, 21 vessels in comps in contracting in total echo friendly greener tankers that has currently a new building program of 12 tankers consisting of DP two shuttle tankers.

George V. Saroglou: TEN currently has a new building program of 12 tankers, consisting of 3 DP-2 shuttle tankers for delivery in 2025 and 2026, one vessel, 2 eco-friendly scrubber-fitted SUEZ MAXs for delivery also in 2025, 2 scrubber-fitted MR tankers for delivery in early 2026, and five LR1 product tankers for delivery in 2027, one vessel, and 2024, four vessels. And we have taken delivery of four DFLR2 new buildings and five ex-vig and tankers with a combined average age of one year and 2.3 million deadweight tons. We have more than doubled the cargo capacity of the fleet with new, more environmentally friendly, eco-built tankers.

Speaker Change: Delivery in 25, and 26 one vessel.

Speaker Change: We have a friendly scrubber fitted tourism access for delivery orphan twenty-five two scrubber fitted and my tankers for delivery in early 'twenty six.

Speaker Change: And five Ela run product tanker for delivery in 2027, one vessel in 'twenty 'twenty four four vessels and we have taken delivery of four D. F. L. A to new buildings and five X weekend tankers with a combined average age of one year and $2 3 million deadweight tons, we more than doubled.

Speaker Change: The cargo capacity of the fleet with new more environmentally friendly echo build tankers.

Speaker Change: Yes.

George V. Saroglou: This slide highlights the company's financial performance since 2004. As the fleet was growing through the years, so did the company's cash position. Always maintaining strong cash reserves to manage the ups and downs of the shipping cycle, we have maintained strong profitability, with the last two years generating record profits, and we have kept manageable debt levels throughout this 20-year period. The first 5 months of 2024 have given TEN the opportunity to further upgrade the quality and earnings power of the field.

Speaker Change: This slide highlights the company's financial performance since 2004.

Speaker Change: As the fleet was growing through the years, so did the company's cash position.

Speaker Change: All wins, maintaining struck strong cash reserves to manage the ups and downs of the shipping cycle. We have maintained strong profitability with SaaS with the last two years generating record profits.

Speaker Change: And we have kept monitor depth levels throughout this 20 year periods.

Speaker Change: The first five months of 'twenty four have given them the opportunity to further upgrade the quality and net earnings power of the fleet.

George V. Saroglou: We expect the new addition to contribute positively to the overall financial performance of the company, starting from the second half of this year. In addition to paying down debt, dividend continuity is important for common shareholders and managers. 10 has always paid a dividend irrespective of the market cycle. Our dividend policy is semi-annual. Last year we paid 30 cents in June, a special dividend of 40 cents in October, and 30 cents in December.

Speaker Change: We expect the New addition to contribute positively in the overall financial performance of the company.

Speaker Change: Starting from the second half of this year.

Speaker Change: Yes.

Speaker Change: In addition to paying down debt dividend continuity is important for common shareholders and management.

Speaker Change: Dan has always paid the dividend irrespective of the market cycle.

Speaker Change: Dividend policy is semiannual.

Speaker Change: Last year, we paid 70 cents in June especial dividend of 40 cents in October and 30 cents in December.

George V. Saroglou: This year, we announced 60 cents per share to be paid July 18 to shareholders of record on July 12. Inclusive of this upcoming dividend, which is double the first semiannual dividend of 2023, Ken has distributed over 800 million of common and preferred share dividends, 546 million of which to common shareholders since the company's 2002 New York Stock Exchange listing.

Speaker Change: This year, we announced 60 cents per share to be paid July 18th to shareholders of record on July 12.

Speaker Change: Inclusive of this upcoming dividend, which is double the first semiannual dividend of 2023.

Speaker Change: Has distributed over $800 million of common and preferred dividends.

Speaker Change: 546 million of which to common shareholders.

Speaker Change: Company 2002, New York Stock exchange listing.

George V. Saroglou: Global oil demand continues to grow. Despite financial and geopolitical headwinds, the International Energy Agency expects global oil demand to grow by approximately 1 million barrels per day to approximately 103 million barrels per day. It's going to be another record year after last year.

Speaker Change: Global oil demand continues to grow despite financial and geopolitical headwinds the international Energy agency expects global oil demand to grow by approximately 1 million barrels per day to approximately 103 million barrels per day.

It's going to be another record year. After last year. Most of the growth is coming from Asia, and Asia Pacific region, mainly India and China on the supply side most of the growth in 'twenty 'twenty four is expected to come from non OPEC plus countries like Brazil, the United States of America, We honor.

George V. Saroglou: Most of the growth is coming from Asia and the Asia-Pacific region, mainly India and China. On the supply side, most of the growth in 2024 is expected to come from non-OPEC plus countries like Brazil, the United States of America, Guyana, Canada, Mexico, and Norway. The majority of the additional supply is in the Atlantic Basin, while demand growth continues to be concentrated in the Pacific, boosting long-haul tanker demand. As global oil demand continues to grow, let's look at the forecast for the supply of tankers. The order book, as of May 24, stands at 10%, or 577 tankers, over the next three years. The figure still represents a low number of new ships.

Speaker Change: Canada, Mexico, Norway.

Speaker Change: The majority of the additional supply isn't the Atlantic basin, while demand growth continues to be concentrated in the Pacific.

Speaker Change: Boosting long haul tanker demand.

Speaker Change: As global oil demand continues to grow let's look at the forecast for the supply of the order book as of May 24th stands at 10% or 577 times, yes.

Over the next three years that figure still represents a low number of new buildings at the same time being part of the fleet.

George V. Saroglou: At the same time, a big part of the fleet..., almost 42% of the fleet is over 16 years old, and 893 tankers, or almost 60% of the fleet, are currently over 20 years old. The next slide shows the scrapping activities since 2008. We believe scrapping activity will pick up as the global fleet gets older and older tankers are getting out of favor for long-term business by major charters.

Speaker Change: Almost 42% with over 16 years.

Speaker Change: 800, and 893 tankers or almost 60% of the fleet are currently over 20 years.

Speaker Change: The next slide shows the scrapping activity since 2018.

We believe scrapping activity will pick up as the global fleet gets older and older tankers or getting out of favor for a long term business by major chapters.

Paul Durham: And with that, I will ask Paul to walk you through the financial highlights of the first quarter. Paul. Thank you, George.

Speaker Change: And with that I will ask Paul to walk you through the financial highlights of the first quarter.

Speaker Change: Paul.

Paul Durham: Thank you.

Paul Durham: And first, I'd just like to say how happy I am to be with my colleagues for a long, long time. It's been a long time really. It feels like a long time. Thank you, George.

Paul Durham: And firstly I'd, just like to say how happy I am.

Paul Durham: It could be with.

Speaker Change: My colleague.

Speaker Change: A long long time.

Speaker Change:

Speaker Change: It's been a long time.

Speaker Change: Okay.

George: Thank you George.

Paul Durham: Since the beginning of 2024, we have been very active on the sale and purchase front, which enabled us to divest from some of our first generation tankers and replace them with new ones in high-end green technology. From the sale of our older vessels, we generated $200 million, which, together with the strong cash flow... The fleet has earned, enabled, and enabled us to retain very solid cash reserves. During this time, while engaging in this green ship initiative, we took eight vessels for our scheduled maintenance and repairs. [inaudible] with a natural drop in fleet.

George: Since the beginning of 'twenty 'twenty four we have been very active on the sale and purchase front.

George: Which enabled us to divest from some of our first generation tankers and replace them with new ones and high end Green technology.

George: From the sale of our older vessels, we generated $200 million.

George: Which together with our strong cash flow.

Fleet has earned.

George: Enabled.

George: And enabled us to maintain very solid cash reserves.

Speaker Change: During this time.

While engaging in this screen chip initiative.

Speaker Change: We took eight vessels for a scheduled maintenance and repairs.

Speaker Change: Unnecessary activity, which should fade away into the second quarter.

Speaker Change: The result of this.

With a natural drop.

Speaker Change: Sweet.

Speaker Change: Drawing [laughter].

Speaker Change: Uh huh.

Unknown Attendee: Unknown Attendee, Climent Molins, Nikolas Tsakos, Nicolas Bornozis, Tsakos Energy, Unknown Attendee, Climent Molins, Nikolas Tsakos, Nicolas Bornozis, Tsakos Energy, Unknown like, you know, take to the tango. So let's continue the tango. So let me take it over from here.

Speaker Change: No I'm kidding, yeah place okay great.

Speaker Change: It's like.

Speaker Change: In the text at the Tango, So let's continue the tango.

Speaker Change: Let me take it over from here.

Nikolas P. Tsakos: So, as Paul started saying, the result of this maintenance... created this natural drop in utilization from 96.4% in the same quarter of 2023 to 91.3% this quarter. Despite these actions, Voyage revenues totaled $202 million and operating income, including $16.2 million in capital gains from a vessel sale, settled at $76.2 million. The resulting net income reached $54 million, which translates to $1.60 in earnings per share.

Speaker Change: So Paul started saying the results of its maintenance.

[noise] created this natural drop in utilization from 96, 4% in the same quarter of 2023% to 91.3 this quarter.

Speaker Change: Despite these actions voyage revenues totaled $202 million and operating income included a $16 2 million in capital gains from the vessel sale settled out seven to $6 2 million.

Speaker Change: The resulting net income reached $54 million, which translates to $1.06 in earnings per share.

Paul Durham: Operating expenses continued to be somewhat influenced by inflationary pressures and reached 48.6 million, similar to the 2023 first quarter, which did have approximately two vessels more on average. Operating expenses per ship per day were at about 9,400, not far off the 2023 first quarter with the average TCE time charge equivalent per ship per day at around 33,400, so a big, still healthy number, but impacted by the reduction in vessels and the steep dry dockings and repairs evident in the quarter, as mentioned earlier.

Speaker Change: Operating expenses continued to be somewhat influenced by inflationary pressures and reached $48 6 million similar to the 2023 first quarter, which did have approximately two vessels more elaborate.

Speaker Change: Operating expenses per ship per day, we're at about 9400, not far off the 'twenty to 'twenty three first quarter with the average TCE time charter equivalent per ship per day at around 33 or 400, so a big multiple difference.

Speaker Change: It's still a healthy number but impacted by the reduction in vessels and the steam dry dockings and repair as evidenced in the quarter.

Speaker Change: As mentioned earlier.

Speaker Change: EBITDA.

Speaker Change: The end of the first quarter.

Paul Durham: EBITDA at the end of the first quarter of 2024 was at about 101 million and expected to return to higher levels once the new vessels begin to generate their lucrative returns. From the beginning of Q1 of 2024, we have seen a distinct continuation of demand for our vessels, and we expect this to help to further build our cost reserves going forward. As the tank and market fundamentals continue to remain firm and assisted by the various geopolitical events around the globe, we are confident that TEN will continue to be the main beneficiary. And I think that concludes the summary from the financial point of view. So, over to you, Nikolas.

Speaker Change: 20% before was up about $101 million.

Speaker Change: And expect it to return to higher levels once the new vessels will begin to generate lucrative returns.

Speaker Change: From the beginning of Q1 of 'twenty 'twenty four will have seen a distinct continuation of demand for our vessels and we expect this to help.

Speaker Change: Rather build our cost reserves going forward.

Speaker Change: The tanker market fundamentals continue to remain firm and assisted by their various geopolitical events around the globe. We are confident that <unk> will continue to be the main beneficiary.

Speaker Change: And I think that concludes the summary from the financial.

Nicholas: Point of view so over to you because you Nicholas.

Nikolas P. Tsakos: Thank you, thank you guys, and I think it's good to give... George Saroglou, Nikolas Tsakos, Nicolas Bornozis, Paul Durham, Nicolas Bornozis, Tsakos Energi, our next phase, which is very clearly to be one of the first, if not the first company, to run the most environmentally friendly fleet out there. And we did this before, we were about 30 years younger, for those of And the reason TEN is around today was a very quick reaction to the OPA90, and that was a big change in the industry's design of ships; that was the biggest really structural change in our industry's design since the ancient years. And we were the first company to have a fully double-deck fleet way before the..., and Nikolas Saroglou.

Nicholas: Thank you thank you guys and.

Nicholas: I think it's good to give.

Nicholas: Yeah.

Speaker Change: The shareholders know that how busy.

Speaker Change: Yeah, we.

Speaker Change: Have been and I think this has been a one of the.

Speaker Change: And the longest but presentations by our present them because we have been oh sure busy, but Georgia, we better yeah, its better to be accurate and do nothing but as I said I think we use this period of time as a springboard.

But overall, our Oh boy next phase, which is very clearly to me one of the first if not the first company to run the most environmental friendly fleet out there and we did this before but I mean, what about 30 years younger for those who you who.

Speaker Change: It's a long memory and and the reason is around today was a very weak.

Speaker Change: Our reaction to the Opa 90, and that was a big change of the industry's design of shippers that was the biggest structural change and that in their studies designed since the engineers and we were the first company to have a full needs double double click the way before the.

Speaker Change: Yeah.

Speaker Change: Did you did the did you time, they do the obligatory view di and we're looking to do the same.

Speaker Change: We don't need to with the help of our clients I think where we are and in the meantime, it makes it significant brokerage and without that we'd like to open the floor to any questions that you may have thank you.

Operator: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Climent Molins with Value Investor Edge. Please proceed.

Speaker Change: Thank you if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May Press Star two if he would like to remove your question from the queue and for participants using speaker equipment. It may be necessary to pick up your handset before.

Speaker Change: Pressing the star keys.

Speaker Change: Our first question is from climate more islands with value Investor Edge. Please proceed.

Climent Molins: Good morning or, well, afternoon. Thank you for taking my question. I wanted to start by asking about the recent order for 5 LR1s. Should we think about it as fleet renewal, or is there a plan to increase your exposure to that subsegment? And secondly, do you plan to fix those vessels on medium-term contracts before delivery, or would you be comfortable trading them on spot?

Speaker Change: Good morning, or Wella Stern Arun. Thank you for taking my questions.

Speaker Change: I wanted to stop asking about the recent order for Pfeifle her once.

Should we think about the the split to bring you want or is there a plan to increase your exposure to that sub segment.

Speaker Change: And secondly, do you plan to fix those vessels on medium term contracts before the library or would you be comfortable trading demonstrate.

Nikolas P. Tsakos: Very well, I think that's a really good point, and if you look at the... If you look at the fleet list that our President was presenting, you see that we have vessels there. We still have the Andes, which is kind of our oldest vessel. It was built before most of my children were even born now, and I'm an empty nester, but we have fond memories of her performance. That ship is, of course, a big candidate for SAIL, but she has performed very well for us being built in Mabari, in Japan, and you see that we have a significant fleet built between you know two thousand and Nikolas T

Speaker Change: Very well I think I think that's a really good point that if you look at.

If you look at the Oh for me at least that the President was Oh.

Speaker Change: Presenting to you will see that we have lessons there would've wished didn't happen beyond this which is a it's kind of our oldest vessel.

Speaker Change: It was it was built before most of them I didn't have already been borne out and Oh My name. The nice thing about that well we have a phone members the peer performance.

CPC is of course, a big candidate foreseen, but he has performed very well for what has been built in the in my body ends up but then you will see that we have a significant.

Speaker Change: Felipe built between two.

Speaker Change: 2000.

Speaker Change: Eight in 2016, let's say so it is a category of ships that we we believe we have they have been profitable for us.

Nikolas P. Tsakos: And if you look at the order book, I don't think anybody's building any of those ships. I think the order book is, anyway, two to three percent. So it's a combination.

Speaker Change: And if you look at the order book I don't think anybody's building any of those ships I think that the order book is there anyway to do two 3%. So it's a combination yes. It is really the New Orleans decides the business man if you will.

Nikolas P. Tsakos: Yes, it is fleet renewal. It's a side of the business that very few people operate, and it's something that I think is a good opportunity.

Speaker Change: People, Oh parade, and it's something that Oh, I think it's a good opportunity. It. These are the least build the ER segment.

Nikolas P. Tsakos: It is the least built segment of the vessel that we operate.

Speaker Change: Oh over the vessels that we operate.

Climent Molins: Makes sense. Thanks for the color.

Speaker Change: Makes sense makes sense, thanks for the corner and would you be willing to trade them on spot or do you still plan to follow your usual strategy of securing that charter.

Nikolas P. Tsakos: And would you be willing to trade them on the spot? Or do you still plan to follow your usual strategy of securing a charter?

Nikolas P. Tsakos: Well, I mean, the way things are today, we do not have a good chance of trading ships on the spot because our clients are actually grabbing those ships as soon as we ink a new bidding order or, you know, have a discussion or take delivery of a ship. What I try to do, and I think our clients are now much, much more open to it, is put market-related features like profit sharing in the market.

Speaker Change: Well I mean with the way things are today.

Speaker Change: We do not have a big a big tons from food trading Simpson spot because our clients are actually good ive been little ships as soon as we inked a new building order or a discussion or they deliberately shape well, what what I tried to do and I think our clients are now much.

Speaker Change: Much more open to it is a boat market related ventures like profit settings in the U S.

Nikolas P. Tsakos: So, most probably, those ships will be either entering some of our very successful pools or will be working on profit arrangements with our clients. So, yes, you know, we are always looking for the highest utilization and the propeller to earn us money every hour.

Speaker Change: In the market. So most probably those ships will be the either entering some of our very successful bullish or would it be working one profit arrangement through their planes.

Speaker Change: So yes.

Speaker Change: We are we are always looking for the highest utilization in the propane to door in less money.

Every hour.

Nikolas P. Tsakos: That's helpful. Thank you. And actually, talking about long-term contracts, I noticed that your exposure to every $1,000 per day increase in rate has decreased to 14 cents relative to last quarter's 18 cents, and I was wondering if you could provide some commentary on some of the fixtures you have added over the past few months.

Speaker Change: That's helpful. Thank you.

Speaker Change: And actually talking about long term contracts I know that your exposure to every thousand dollar per day increase in rates.

Speaker Change: Has decreased to 14 cents for this last quarter, there's 18 cents and I was wondering could you provide some commentary on some of the features you have added over the past few months.

Nikolas P. Tsakos: Yes, I think by the end of actually by the end of the second quarter, it would be closer to 20 cents from our calculations because we have refixed some vessels in the third quarter and presented a level. I cannot say too much because our competition is listening, and although we're all nice friends and we can have a drink in marine money or capital income, it's better for everybody to run his own business, but in some cases, our minimums have doubled from where they were from the profit share. So you will see that it is increasing significantly. The reason is that in the first quarter, we took some vessels that had on them, with their previous owners, fixed employment.

Speaker Change: Yes, I think I think by by the end of Oh excuse me by the end of the second quarter. It will be closer to 20% for my own calculations, because we have very fixed.

Speaker Change: Some vessels are in the third quarter up I'm presented.

Speaker Change: Nevertheless, I cannot say too much because our competition is listening and although we're really nice friends and we can have a drink and marine money or capital goods.

Speaker Change: You do it on his own business.

Speaker Change: In some cases, oh, well the minimums have doubled.

Speaker Change: Where they are.

Speaker Change: From other provinces. So you wouldn't see that are increasing significantly. The reason is that in the first quarter. We took on some vessels.

Speaker Change: HUD.

On its brand with its previous owners are fixed employment.

Climent Molins: Thanks for the cover. And final question from me. This is more on the shareholder return side. Last year, you declared a special dividend alongside Q2 earnings. And I was wondering, considering you expect Q2 earnings to be significantly better than Q1, is it fair to expect a special dividend as well when you report earnings?

Speaker Change: Thanks for the color and final question from me.

Speaker Change: These more on the shareholder return.

Speaker Change: Last year, you declared the special dividend alongside Q2 earnings and I was wondering considering do you expect Q2 earnings to be significantly better than Q1s is it fair to expect a special leaving US well when you report earnings.

Nikolas P. Tsakos: That's a very good question. I mean, all of your questions are good, but I think that I want to clarify something. Yes. Last year, we actually announced and paid an extra dividend, and Nikolas Saroglou.

Speaker Change: That's a very good question and I'm going to lose versions are good, but I think that that.

Speaker Change: I want to clarify something yes last year, we actually are.

Speaker Change: Announced and paid an extra dividend.

Speaker Change: Which went unnoticed by the analysts and the market.

Speaker Change: As a you know a one off.

Speaker Change: So we did not get any additional valuation for our shareholders.

Speaker Change: We would not pay and mixed about dividend because it goes unnoticed.

Do I put dollars in you know should be paid after we pay them they should be noticed and we would like it on the second half dividend. So it wouldn't go nowadays so I guess the you know our intention is if the market continues to increase the second half of the year, but not with a special dividend.

Speaker Change: Because the market seems to think that it's a one off occasion and they do not give it to anybody. So what are included in our second the second half.

Speaker Change: And in our December deal with it.

Climent Molins: Makes sense. That's all from me. Thank you for taking my questions. Thank you.

Speaker Change: Makes sense that's all for me. Thank you for taking my questions.

Speaker Change: Thank you.

Operator: As a reminder, it is star one on your telephone keypad. If you would like to ask a question, we will pause for a brief moment to see if there are any final questions. With no further questions at this time, I would like to turn the floor back over to the CEO, Dr. Nikolas Tsakos.

Speaker Change: As a reminder, it is star one on your telephone keypad.

Speaker Change: He would like to ask a question we will pause for a brief moment to see if there's any final questions.

Speaker Change: With no further questions at this time I would like to turn the floor back over to the CEO Dr. Nicholas taxes. Please.

Speaker Change: Right.

Speaker Change: Yeah.

Nikolas P. Tsakos: and Nikolas Saroglou, Unknown Attendee, Climent Molins, Paul Durham, Nicolas Bornozis, Tsakos [inaudible] and I think we're organizing a European road show and, of course, we're always in the U.S. quarterly to see our shareholders. And again, thank you very much and have a nice relaxing and peaceful summer. We will not have one because we will be working. Thank you. Thank you. This will conclude today's program.

Speaker Change: Again.

Speaker Change: It's a pleasure to be able to share the company's developments our developments with you at a 31st year hopefully we wouldn't see a you know last year, we were 10 or third thing. We broke 30 now we're at 31 I want to break 31 and more in much more above of that then.

Speaker Change: We hope that all but four months now.

Speaker Change: Our results in a dividend payments to shareholders and I'm surprised go much closer to where it should be although it does it has it has moved positively but we're still a long way from where we expected are expected to be in the again.

Speaker Change: Again, I want to thank everybody for their support it has been a frantic a period in the last six months so for commercial developments of renewing the fleet of growing the fleet significantly at the same time, making gaming positive earnings and profits by selling older ships and then again what was it.

Speaker Change: Placing them with much younger seems to growing the company modernizing the company. So we are in a go go always mode right now and but we only do it when there is solid business. You know that we are trying to avoid putting ever our company into into any trouble.

Speaker Change: I haven't done this for 31 years.

Speaker Change: We're always growing it responsibly and we want to thank you for your support and looking to see you face to face a very soon.

Speaker Change: Yeah.

Speaker Change: I think we're organizing their European neuro draw and of course, we're always in the U S quarterly to see our shareholders and again, thank you very much and Uh huh.

Speaker Change: A nice relaxing and this summer we will not have one because we wouldn't be working thank you.

Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation. Thank you for watching!

Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.

unknown: [inaudible]

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].