Q2 2025 Tsakos Energy Navigation Ltd Earnings Call

Speaker #3: I'd like to.

Speaker #4: Thank you for standing by, ladies and gentlemen. And welcome to SAKOS ENERGY NAVIGATION conference call on the second quarter of 2025 financial results. We have with us today Mr. Tsakos, Arapoglou, Chairman of the Board, Mr. Nicholas Tsakos, Founder and CEO, Mr. George Saroglou, President and Chief Operating Officer, and Mr. Harrys Kosmatos, Co-CFO of the company.

Speaker #4: At this time, all participants are on a listen-only mode. There'll be a presentation followed by a question and answer session. 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.

Speaker #4: I must advise that this conference is being recorded today. And now I pass the floor over to your host, Mr. Nicholas Bornozis, President of Capital Link and Investor Relations, Advisor to SAKOS ENERGY NAVIGATION.

Speaker #4: Please go ahead, sir.

Speaker #5: Thank you very much, and good morning to all of our participants. I am Nicholas Bornozis, President of Capital Link and Investor Relations Advisor to SAKOS ENERGY NAVIGATION.

Nicolas Bornozis: Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations Advisor to Tsakos Energy Navigation Ltd. This morning, the company publicly released its financial results for the second quarter and six months ended on June 30, 2025. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at ir@capitallink.com, and we will have a copy for you emailed right away. Please note that parallel to today's conference call, there's also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the company's website.

Speaker #5: This morning, the company publicly released its financial results for the second quarter and six months ended on June 30, 2025. In case we do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at 10@capitallink.com.

Speaker #5: And we will have a copy for you emailed right away. Please note that parallel to today's conference call, there's also a live audio and slide webcast which can be accessed on the company's website on the front page at www.teann.gr.

Speaker #5: The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the company's website. Please note that the slides of the webcast presentation will be available in archived on the web chart of the company after the conference call.

Nicolas Bornozis: Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation 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. 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 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. At this moment, I would like to pass the floor to Mr. George Saroglou, the President and COO of Tsakos Energy Navigation Ltd. Please go ahead, sir.

Speaker #5: Also, please note that the slides of the webcast presentation 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 #5: At this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the private security litigation reform act of 1995.

Speaker #5: Investors are concerned that such forward-looking statements involve risks and uncertainties which may affect tens of business prospects and results of operations. And at this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of SAKOS ENERGY NAVIGATION.

Speaker #5: Please go ahead, sir.

Speaker #6: Thank you. Thank you, Nicholas. Good morning. good afternoon to everyone. in, in, in a thank you market with, with still strong fundamentals, we continue to perform extremely well.

Efstratios-Georgios Arapoglou: Thank you. Thank you, Nikolas. Good morning. Good afternoon to everyone. In a tanker market with still strong fundamentals, we continue to perform extremely well, sticking to our well-known industrial model that the CEO, Nikolas Tsakos, has described many times, generating healthy contracted revenue under very strict cost control, as you see in the numbers. At the same time, we're selling older vessels and replacing them with new state-of-the-art ships, keeping a young fleet attractive to our customers. I will remind you that some time ago, we identified the lack of good weighting on VLCCs. We are correcting this now. As you've seen, we've gone ahead to order three new VLCCs with scrubbers, plus option one. We are rebalancing the portfolio, and we are filling a gap that we always wanted to fill. The results, well done to Nikolas Tsakos and his team. Best wishes for every success going forward.

Speaker #6: sticking to our well-known industrial model, that, the CEO, Nicholas Tsakos, has, described many times. generating healthy contracted revenue under very strict cost control as you see in the numbers.

Speaker #6: At the same time, we're selling all the vessels and replacing them with new, state-of-the-art ships, keeping a young fleet attractive to our customers.

Speaker #6: I will remind you that some time ago we identified the, the lack of, good weighting on VLCCs, we are correcting this now. And as you've seen, we've, gone ahead to order three new VLCCs with scrubbers plus option one.

Speaker #6: So we are rebalancing, we are rebalancing the portfolio and we are filling a gap that, we always wanted to, to, to, to fill. So, again, the results, well done to Nicholas Tsakos and his team.

Speaker #6: Best wishes for every success. going forward. So over to you, Nicholas.

Efstratios-Georgios Arapoglou: Over to you, Nikolas.

Speaker #7: Yeah. Thank you, Chairman, and good morning to everybody. It's, a pleasure to be here after the short, summer lull. Whereas in, in ten, we did not experience such, lull because the company was very active during the summer months.

Nikolas Tsakos: Yeah. Thank you, Chairman, and good morning to everybody. It's a pleasure to be here after the short summer lull. Whereas in Tsakos Energy Navigation Ltd, we did not experience such a lull because the company was very active during the summer months. We find it always interesting to make sure that during the slow seasonal months of the summer, perhaps it's the best time to do business when not everybody is around his desk. We've been busy in August, either ordering the three plus one vessel, taking delivery in August and in July, starting from June of our Suez Maxes and our shuttle tankers with long employment, selling older vessels, and ordering, as the Chairman said, supporting the VLCC segment of our company. We have been traditionally a company with a larger number of VLCCs, and we renewed part of the fleet some years ago.

Speaker #7: We find it always interesting to make sure that during the slow seasonal months of the summer, perhaps it's the best time to do business when not everybody is around their desk.

Speaker #7: So we've been busy, in August, other the ordering the three plus one vessel, taking delivery of, in August, and in July, starting from June, of, our, our V of our Suez Maxis and, our shuttle tankers with, long employment.

Speaker #7: selling order vessels, and ordering, as the Chairman said, supporting the, the VLCC segment of our company. We have been traditionally a company with a larger number of, of VLCCs.

Speaker #7: and, we, we renewed part of the fleet, some, some years ago. And now it's, very much time to come up with a strong environmentally, friendly vessels, all of them, built in, in, in, in South Korea.

Nikolas Tsakos: Now it's very much time to come up with strong environmentally friendly vessels, all of them built in South Korea, in the traditional yards that we have been supporting over the years, like Hyundai. I mean, we must be one of the very few companies that we are very proud to take delivery of our vessels, thanks to our new building capacity and capability. We just took delivery of our 150th new building in the last less than 30 years. These vessels have been delivered from what I would say is the core peer group of shipbuilders in the world. We started in April in Samsung. We moved in June to Hyundai in South Korea, and we just renewed our relationship with what used to be called Daewoo, which we're just right now building VLCCs there. The company is following its model of quality comes first.

Speaker #7: In the traditional yards that we have been supporting, over the years, like Hyundai, I mean, we must be one of the very few companies that, we are very proud.

Speaker #7: To take delivery of our vessels, thanks to our new building capacity and capability, we just took delivery of our 150th new building in less than 30 years.

Speaker #7: and, this, vessels are, have been delivered from, what I would say is, is the core peer group of shipbuilders in the world. we started, we started in April with, in Samsung, we moved, in June, to Hyundai, in, in Korea.

Speaker #7: And we just, renewed, relationship with, what used to be called, Daewoo, which, we're just right now building, VLCCs there. So, the company's following, its model of quality, comes first.

Speaker #7: We are not, we have not, and, through the years, we have never cut corners. We have always done things, the correct way by the book.

Nikolas Tsakos: We have not, and through the years, we have never cut corners. We have always done things the correct way by the book. I think we are a proof that things can work when you actually follow your strategy, follow the rules, and always aim towards quality. As mentioned in the press release, this has the beginning of the year and the first six months have been a period of turmoil, mainly because we are big supporters of the open seas. Whenever sanctions and tariffs are imposed, of course, this puts a question mark and uncertainty in the market that we are facing. However, we have been able to navigate this, I would say, interesting and interesting new times successfully. We paid our first dividend in July. We're looking forward to pay the next dividend to announce it in November.

Speaker #7: And, and I think we, we are a proof that, things can work when you actually follow your strategy, follow the rules, and, and always aim, towards quality.

Speaker #7: This, as mentioned in the press release, this has the, the beginning of the year and the first six months, have been, a period of, of turmoil, mainly because, we are big supporters of the open seas and whenever, a sanctions and tariffs are imposed, of course, this, puts, question mark and uncertainty in the market that we are facing.

Speaker #7: However, we have been able, to navigate, this, I would say interesting, and, interesting new times, successfully. we paid our first dividend in July. We're looking forward to pay the next dividend, to announce it in November.

Speaker #7: And, in the meantime, we are happy to see the appetite of the major oil companies for good quality vessels at very, very accretive rates.

Nikolas Tsakos: In the meantime, we are happy to see the appetite of the major oil companies for good quality vessels at very, very accretive rates. With that, I would like to ask George Saroglou, our President, to give us a more detailed analysis, not very detailed, George, more detailed of what has happened in the last six months and this upcoming period.

Speaker #7: and with that, you know, I would like to ask, George, Saroglou, our President, to give us a more detailed analysis, not very detailed, George, more detailed of what has happened in the last, six months.

Speaker #7: And there's a, period.

Speaker #8: Thank you, Nicholas. We are pleased to report today another profitable quarter. Thank your markets have remained healthy through 2025 to date. Energy majors continue to approach our company for time-charter business.

George Saroglou: Thank you, Nikos. We are pleased to report today another profitable quarter. Tanker markets have remained healthy through 2025 to date. Energy majors continue to approach our company for time charter business. As we speak today, total fleet contracted revenue, the backlog that we have today, the minimum is approximately $3.7 billion, which coincides, equates to more than $120 per share, just to put it in a share perspective. That's the limit. Tsakos Energy Navigation Ltd is one of the largest transporters of energy in the world. We have started with four vessels back in 1993, and we have turned every crisis the world and shipping has faced into a growth opportunity. Today, we have a pro forma fleet of 82 vessels, thanks to the company's crisis-resistant model.

Speaker #8: And as, we speak today, total fleet contracted revenue, the backlog that we have today, the minimum is approximately 3.7 billion, which coincides equates to more than $120 per share.

Speaker #8: Just to put it in a, in, in share perspective, that's the limit, 10 is one of the largest transporters of energy in the world.

Speaker #8: We have started, with four vessels back in 1993, and we have turned every crisis the world and shipping has faced into a growth opportunity.

Speaker #8: Today, we have a pro forma fleet of 82 vessels, thanks to the company's crisis-resistant model. During these 32 years, we have combined self-generated cars, traditional bank lending, and counter-cyclical capital market fundraising in order to build a corporate fleet.

George Saroglou: During these 32 years, we have combined self-generated cash, traditional bank lending, and countercyclical capital market fundraising in order to build a corporate fleet. Fleet modernity is an integral part of our operating model. We build vessels at the best shipyards. We acquire very modern, high-specification tonnage, and at the same time, we sell some of the older vessels in the fleet. We have built a young, diversified, and versatile fleet, covering both the conventional and specialized transportation requirements of our clients, which are mainly major energy concerns, blue chip names with global risk. In slide number four, we list the pro forma fleets of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market and our new buildings under construction.

Speaker #8: Fleet modernity is an integral part of our operating model. We build vessels at the best shipyards, we acquire very modern, high-specification tonnage, and at the same time, we sell some of the older vessels in the fleet.

Speaker #8: We have built a young, diversified, and versatile fleet covering both the conventional and specialized transportation requirements of our clients, which are mainly major energy concerns, blue-chip names with global risk.

Speaker #8: In slide number four, we list the pro forma fleet of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market, as well as our new buildings under construction.

Speaker #8: Since our last earnings call, we have added three new VLCCs to boost our presence in a sector that we felt we needed to increase the number of vessels we operate.

George Saroglou: Since our last earnings call, we have added three new building VLCCs to boost our presence in a sector that we felt we needed to increase the number of vessels we operate, with very good, solid fundamentals, as a big part of the VLCC fleet in the water is over 15 years. With light blue, we have the vessels that are on time charter with profit sharing, and with dark blue, the vessels that are on fixed-rate time charters. In the next slide, we list the pro forma diversified fleet, which consists of our two LNG vessels and our 16-vessel shuttle tanker fleet. We are one of the largest shuttle tanker operators in the world, following the recently announced deal with Transpetro in Brazil for nine high-specification shuttle tankers to be built in the Samsung shipyard in South Korea.

Speaker #8: And with, very good, solid fundamentals as a big part of the VLCC fleet in the water is over 15 years. With light blue, we have the vessels that are on time-charter with profit sharing, and with dark blue, the vessels that are on, on fixed rate time-charters.

Speaker #8: In the next slide, we list the pro forma diversified fleet, which consists of our two LNG vessels and our 16 vessel shuttle tanker fleet.

Speaker #8: We are one of the largest shuttle tanker operators in the world, following the recently announced deal with Transpetro in Brazil, for nine high-specification shuttle tankers to be built in the Samsung shipyard in South Korea.

Speaker #8: We have six shuttle tankers in full operation, after recently taking delivery of both Athens 4 and Paris 24, which commenced long time-charters to an energy major.

George Saroglou: We have six shuttle tankers in full operation after recently taking delivery of both Athens IV and Paris 24, which commenced long time charters to an energy major. If we combine the two slides and account only for the current operating fleet of 61 vessels, we have 24 vessels, or 39% of the operating fleet with market exposure that is spot and time charter with profit sharing, while 53 tankers, or 87% of the fleet, is in secured revenue contract, time charter and time charter with profit sharing. The next slides, we list our clients with whom we do repeat business through the year, thanks to our industrial model. ExxonMobil is the largest revenue client as we speak. Equinor, Shell, Chevron, Total, and BP follow.

Speaker #8: If we combine the two slides and account only for the current operating fleet of 61,000 vessels, we have 24 vessels or 39% of the operating fleet with market exposure, that is spot and time-charter with profit sharing, while 53 tankers or 87% of the fleet is in secured revenue contract.

Speaker #8: Time-charter and time-charter with profit sharing. The next slides we list our clients with whom we do repeat business through the year, thanks to our industrial model.

Speaker #8: ExxonMobil is the largest revenue client as we speak. Equinor, Shell, Chevron, Total, and BP follow. We believe that over the years we have become the carrier of choice to energy majors, thanks to the fleet that we built, the operational and safety record, the discipline financial approach, and the strong balances.

George Saroglou: We believe that over the years, we have become the carrier of choice to energy majors, thanks to the fleet that we built, the operational and safety records, the disciplined financial approach, and the strong balances. The left side of slide seven presents the all-in break-even cost for the various vessel types we operate in TEN. Our operating model is simple. We try to have our time charter vessels generate revenue to cover the company's cash expenses. That is, paying for the vessel operating expenses, finance expenses, overheads, chartering costs, and commissions. We let the revenue from the spot trading vessels contribute to the profitability of the company. Thanks to the profit sharing element, for every $1,000 per day increase in spot rates, we have a positive impact of $0.10 in the annual EPS based on the number of TEN vessels that currently are exposed to the spot markets.

Speaker #8: The left side of slide seven presents the all-in break-even course for the various vessel types we operate in ten. Our operating model is simple.

Speaker #8: We try to have our time-charter vessels generate revenue to cover the company's cost expenses. That is, paying for the vessel operating expenses, finance expenses, overheads, chartering costs, and commissions.

Speaker #8: And we let the revenue from the spot trading vessels contribute to the profitability of the company. Thanks to the profit sharing element, for every $1,000 per day increase in spot rates, we have a positive impact of 10 cents in the annual EPS, based on the number of 10 vessels that currently are exposed to the spot markets.

Speaker #8: We have, solid balance sheet with strong cash reserves, and the, and the fair market value of the fleet is 3.8 billion against 1.8 billion debt, and the net debt to cap is around 42%.

George Saroglou: We have a solid balance sheet with strong cash reserves, and the fair market value of the fleet is $3.8 billion against $1.8 billion debt, and the net debt to cap is around 42%. Fleet renewal and investing in eco-friendly, greener vessels has been key to our operating model. Since January 1, 2023, we have further upgraded the quality of the fleet by divesting from our first-generation conventional tankers, replacing them with more energy-efficient new buildings and modern second-hand tankers, including dual-fuel vessels. In summary, we have sold 17 vessels with an average age of 17.03 years and a capacity of 1.4 million deadweight and replaced them with 33 contracted and modern acquired vessels with an average age of less than a year and 3.4 times the deadweight capacity of the vessels we sold. We continue to transition our fleet to greener and dual-fuel vessels.

Speaker #8: Fleet renewal and investing in eco-friendly, greener vessels has been key to our operating model. Since January 1st, 2023, we have further upgraded the quality of the fleet by divesting from our first-generation conventional tankers and replacing them with more energy-efficient new buildings and modern second-hand tankers, including dual-fuel vessels.

Speaker #8: In summary, we have sold 17 vessels with an average age of 17.3 years, and capacity of 1.4 million debt we pay ton, and replaced them with 33 contracted and modern acquired vessels with an average age of less than a year, and 3.4 times the debt Y capacity of the vessels we sold.

Speaker #8: We continue to transition our fleet to greener and dual-fuel vessels. We are currently one of the largest owners of dual-fuel LNG-powered Aframax tankers, with six vessels in the water.

George Saroglou: We are currently one of the largest owners of dual-fuel LNG-powered Afromax tankers with six vessels in the water. The fundamentals continue to be good as global demand grows year after year. OPEC+ really accelerated further their voluntary production cuts. Economic sanctions, wars, sanctions-resistant tankers, and geopolitical events affect our tanker market positively. The same is happening on freight rates, while the tanker order book remains at healthy levels as a big part of the global tanker fleet is over 20 years and it needs to be replaced soon. With that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance of the second quarter.

Speaker #8: The fundamentals continue to be good, as global demand grows year after year. OPEC+ really accelerated further their voluntary production, cuts, economic sanctions, wars, sanctioned listed tankers and geopolitical events affect the our tanker market positively, the same is happening on freight rates, and while the tank while the tanker order book remains remains at healthy levels, as a big part of the global tanker fleet is over 20 years, and in need to be replaced soon.

Speaker #8: And with that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance of the second quarter. Thank you.

Harrys Kosmatos: Thank you. Thank you, George. Let me start with the first half highlights. With a slightly larger fleet, both in terms of vessels and deadweight tons, when compared to the first half of 2024, Tsakos Energy Navigation Ltd during the first six months of 2025 continued to place more tonnage on time charter contracts to adhere to the long-term needs of its clients. As a result, during the first six months of 2025, TEN's secured charters, including those with profit sharing provisions, increased by about 14%, while spot contracts experienced a marked decline by about 27%. A point of note, however, is the company's continued belief in the market, which despite TEN's limited exposure in the inherently volatile spot market, which has softened somewhat from prior periods of the recent past, has increased its presence in profit sharing contracts by about 28% from the 2024 first half.

Speaker #8: Thank you, George. So let me start with the first half highlights. With the slightly larger fleet, both in terms of vessels and debt tonnage, compared to the first half of 2024, during the first six months of 2025, Tsakos Energy Navigation Ltd continued to place more tonnage on time-charter contracts to adhere to the long-term needs of its clients.

Speaker #8: As a result, during the first six months of 2025, ten secured charters, including those with profit-sharing provisions, increased by about 14%. While spot contracts experienced a marked decline by about 27%. company's continued belief in the market, which, despite ten's limited exposure in the inherent volatile spot market, which has softened somewhat from prior periods of the recent past, has increased its presence in profit-sharing contracts by about 28% from the 2024 first half.

Speaker #8: As a result, during the first six months of 2025, ten secured charters, including those with profit-sharing provisions, increased by about 14%. While spot contracts experienced a marked decline by about 27%.

Harrys Kosmatos: In order to capture the upside, tanker loads are expected to provide, starting with the upcoming winter months. In addition, during the first six months of 2025, five vessels underwent scheduled dry dockings from eight in the same period of 2024, which, when combined with the shift in employment patterns explained above, resulted in an increase of fleet utilization from 91.9% in the first half of 2024 to 96.9% in the first half of 2025. As a result, TEN's 62 vessels in the water fleet generated $390 million of gross revenues during the first half of 2025, from $415 million in the spot-heavy 2024 first half, averaging a healthy $30,754 per ship per day. The aforementioned shift in employment patterns led to a material reduction in voyage expenses from $83.4 million in the first half of 2024 to about $68 million in the 2025 months, a $15.5 million reduction.

Speaker #8: upside, tankers are expected to A point of note, however, is the provide starting with the upcoming winter months. In addition, during the first six months of 2025, five vessels underwent scheduled ride auctions from eight in the same period of 2024.

Speaker #8: Which, when combined with the shift in employment patterns explained above, resulted in an increase of fleet utilization from 2024 to 96.9% in the first half of 2025.

Speaker #8: As a result, ten's 62 vessels in the water fleet generated 390 million of gross revenues, during the first half of 2025, from 415 million in the spot heavy 2024 first half.

Speaker #8: Averaging a healthy 30,754 dollars per ship per day. The aforementioned shift in employment patterns led to a material reduction in voyage expenses, from 83.4 million in the first half of 2024, to about 91.9% in the first half 68 million in the 2025 first six months.

Speaker #8: A 15.5 million reduction in a similar fashion, charter hire expenses fell from 11 million to 6.6 million. A 4.5 million improvement during the equivalent six-month timeframe.

Harrys Kosmatos: In a similar fashion, charter hire expenses fell from $11 million to $6.6 million, a $4.5 million improvement during the equivalent six-month timeframe. Vessel operating expenses reflecting the somewhat larger fleet, both in terms of numbers and vessel sizes, were at $102.3 million, slightly higher than the 2024 first half level, equating to a daily average expense of a still competitive $9,743 per vessel. A similar pattern was evident in both depreciation and amortization expenses, which closed the first half of 2025 at $83.2 million, up $6 million from the 2024 period. Unlike the 2024 first half, whose results included a mere $49 million capital gain from a series of vessel sales, such gains for the 2025 first half were reduced to just $3.5 million as a result of the sale of a 2009-built Suezmax tanker during the first quarter of 2025.

Speaker #8: Vessel operating expenses reflecting the somewhat larger fleet, both in terms of numbers and vessel sizes, were at 1.102.3 million slightly higher the 2024 first half level.

Speaker #8: Equating to a daily average expense of a still competitive 9,743 dollars per vessel. A similar pattern was evident in both depreciation and amortization expenses, which closed the first half of 2025 at 83.2 million.

Speaker #8: Up $6 million from the 2024 period. Unlike the 2024 first half, whose results included a mere $49 million capital gain from a series of vessel sales, such gains for the 2025 first half were reduced to just $3.5 million.

Speaker #8: As a result of the sale of a 2009-built Suezmax tanker during the first quarter of 2025. Inclusive of these gains, during the first half of 2025, ten's operating income settled at near at about 111 million dollars.

Harrys Kosmatos: Inclusive of these gains, during the first half of 2025, TEN's operating income settled at about $111 million. Interest and finance costs during the 2025 first half, on the back of a somewhat lower interest rate environment and two refinances of lower margins, were at $49 million from $55.2 million in the same 2024 six-month period, an over $6 million improvement. Interest income during the first half of 2025 reached $5.5 million. General and administrative expenses for the first half of 2025 were at $23.1 million, incorporating a management incentive and stock compensation plan. Reflecting all the above, the company generated a net income for the first half of 2025 of $64.5 million or $1.70 per share.

Speaker #8: Interest and finance costs during the first half of 2025, on the back of a somewhat lower interest rate environment and two refinances at lower margins, were at $49 million, down from $55.2 million in the same six-month period of 2024.

Speaker #8: An over 6 million improvement. Interest income during the first half of 2025 reached 5.5 million. General and administrative expenses for the first half of 2025 were at 23.1 million, incorporating a management incentive and stock compensation plan.

Speaker #8: Reflecting all the above, the company generated a net income for the first half of 2025 of 64.5 million, or $1.70 per share. Adjusted EBITDA for the first six months of 2025 came in at 193.2 million, while total debt net of 287 million of cash at hand settled at 1.4 billion, leading to net debt to capital of accountable 43.6%.

Harrys Kosmatos: Adjusted EBITDA for the first six months of 2025 came in at $193.2 million, while total debt net of $287 million of cash at hand settled at $1.4 billion, leading to net debt to capital of a comfortable 43.6%. Now let's go into the second quarter highlights. During the second quarter of 2025, the employment shift towards secured employment was equally evident as available days under time charters and profit sharing contracts increased by 12% from the 2024 second quarter, while days under spot voyages dropped precipitously by 31.5%, leading to fleet utilization increasing to 96.6% from 92.4% in the 2024 second quarter. Worth highlighting here is the 30% increase in total days of profit sharing contracts, emphasizing TEN's employment strategy of downside protection with upside optionality.

Speaker #8: To and now let's go into the second quarter highlights. During the second quarter of 2025, the employment shift towards secured employment was equally evident as available days under time-charters and profit-sharing contracts increased by 12% from the 2024 second quarter.

Speaker #8: While days under spot voyages dropped precipitously by 31.5%, leading to fleet utilization increasing to 96.6% from 92.4% in the 2024 second quarter. Worth highlighting here is the 30% increase in total days of profit-sharing contracts emphasizing ten's employment strategy of downside protection with upside optionality.

Speaker #8: Resolving from the above and reflecting again a somewhat softer but still healthy market from the 2024 second quarter, and after having the three vessels on dry dock, TEN's fleet generated $193 million of gross revenues, equating to $30,767 per vessel per day.

Harrys Kosmatos: Resulting from the above and reflecting again a somewhat softer but still healthy market from the 2024 second quarter, and after having the three vessels on dry dock, TEN's fleet generated $193 million of gross revenues, equating to $30,767 per vessel per day, a healthy performance. Voyage expenses, again due to lesser days on spot contracts, declined by about $10 million from the 2024 same period, while charter hire expenses also experienced a drop to settle at $3.3 million from $5.1 million in the second quarter of 2025. Operating expenses, and as indicated earlier during our first half overview, were just $3 million higher from the 2024 second quarter at $52.7 million or $9,982 per ship per day, a still competitive level thanks to the efficient and proactive management performed by TEN's technical managers.

Speaker #8: A healthy performance. Voyage expenses again decreased due to fewer days on spot, settling at $X million from the same period in 2024, while charter hire expenses also experienced a drop, settling at $3.3 million from $5.1 million in the second quarter of 2025.

Speaker #8: Operating expenses, as indicated earlier during our first half overview, were just $3 million higher. In the 2024 second quarter, contracts declined by about 10 to $52.7 million, or $9,982 per ship per day.

Speaker #8: A still competitive level thanks to the efficient and proactive management performed by ten's technical managers. Depreciation and amortization costs during the 2025 second quarter and again reflected a slightly higher vessel classes in the fleet were at 42.1 million from 39.5 million in the second quarter of 2024.

Harrys Kosmatos: Depreciation and amortization costs during the 2025 second quarter, and again reflecting the slightly higher vessel classes in the fleet, were at $42.1 million from $39.5 million in the second quarter of 2024. During this second quarter, there were no gains or losses on vessel sales registered compared to the 2024 second quarter, which recorded total gains of $32.5 million. As a result, operating income for the second quarter of 2025 settled at $50 million. Interest and finance costs during the second quarter of 2025 were $5 million lower from the 2024 second quarter at $25 million, while interest income reached $3.2 million. Taking all the above in consideration, TEN during the second quarter of 2025 generated a net income of $26.8 million, which equates to $0.67 per share. In ending, adjusted EBITDA for the 2025 second quarter was at approximately $94 million.

Speaker #8: During this second quarter, there were no gains or losses on vessel sales registered, compared to the 2024 second quarter, which recorded total gains of $32.5 million.

Speaker #8: As a result, operating income for the second quarter of 2025 settled at $50 million. Interest and finance costs during the second quarter of 2025 were $5 million lower than in the second quarter of 2024, at $25 million, while interest income reached $3.2 million.

Speaker #8: Taking all the above into consideration, ten, during the second quarter of 2025, generated a net income of 26.8 million, which equates to 67 cents per share.

Speaker #8: In ending, adjusted EBITDA for the 2025 second quarter was at approximately 94 million dollars. And with this, I pass it back to Nicholas. Thank you.

Harrys Kosmatos: With this, I pass it back to Nikos. Thank you.

Speaker #7: Thank you, Harry. For, your detailed, analysis. And, with this, we would like to open, the floor. For any questions or input, that, you may have.

Nikolas Tsakos: Thank you, Harry, for your detailed analysis. With this, we would like to open the floor for any questions or input that you may have. Thank you.

Speaker #7: Thank you.

Speaker #2: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad.

Speaker 9: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Paul Durham with Alliance Global Partners. Please proceed with your question.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Speaker #2: Our first question comes from Pofrat with Alliance Global Partners. Please proceed with your question.

Speaker #9: Yes. thank you. can we talk about the new build orders for the BLCCs, you know, as you mentioned on the last quarterly call? You know, you previewed, you previewed it seemed to preview that.

Paul Durham: Yes. Thank you. Can we talk about the new build orders for the VLCCs? As you mentioned on the last quarterly call, you previewed it seemed to preview that. Can you talk about how you decided to go forward with new builds versus acquiring assets in the open market?

Speaker #9: Can you talk about how you decided to go forward with new builds versus acquiring assets in the open market?

Speaker #7: Yes. Thank you. Well, we are always looking for good quality vessels in, in the open market also. So, I mean, we do not exclude this to happen.

Nikolas Tsakos: Yes, thank you. We are always looking for good quality vessels in the open market also. I mean, we do not exclude this to happen. We took advantage of the strong second-hand market to sell vessels. Perhaps it is, you know, when it's a good time to sell vessels, and we made a significant cash profit and a profit overall on the sale of 18-year-old vessels, it means that it's not perhaps the best time to acquire second-hand vessels because they are pricey. I believe that it's very, very good for us. We have very competent and experienced new building site offices in Korea and Japan in the past.

Speaker #7: we took advantage of the strong second-hand market to sell vessels. So perhaps, it, you know, when it's a good time to sell vessels, we made a significant cash profit and a profit overall on the sale of, 18-year-old vessels.

Speaker #7: it means that, it's not perhaps the best time to acquire second-hand vessels because, they, they are, they are pricey. So I believe that, it's very, very good.

Speaker #7: for us, we have very competent and experienced new building new building, site offices, in, in Korea. And, and, and Japan in the past. so it has been it makes much more sense since we are building a big number of vessels in the first-class Korean yards with the site office there to build the environmentally friendly, vessels, of the future.

Nikolas Tsakos: It makes much more sense since we are building a big number of vessels in the first-class Korean yards with a site office there to build environmentally friendly vessels of the future that are actually following all the upcoming regulations, and they are built at the yards that we traditionally build ships. I think VLCCs have been a part of our portfolio that we have lagging behind, and I think that's a very good opportunity to find. We believe it may be the reason we are able to run ships at, I would say, significantly lower operating expenses than a big part of our peer group is because we tend to build good quality ships and sister vessels. That helps us very, very much in keeping operating expenses and the experience of our seafarers, the crew, and the captains.

Speaker #7: That, are actually, following all the upcoming, regulations. And they are built at the yards, that we traditionally build ships. So I think, VLCCs has been, part of, of our, portfolio that we have, lagging behind.

Speaker #7: And I think that's a very good opportunity to find. We believe it may be the reason we are able to run ships at, I would say, significantly lower operating expenses than a big part of our peer group. This is because we tend to build good quality ships and sister vessels.

Speaker #7: And that helps us very, very much, in keeping operating expenses and the experience of our seafarers, the crew, and the captains, it's like running, let's say, you know, a very similar fleet of, of, of, of airplanes or a very similar, fleet of Boeings or, in, in, in order for, to have the training for the crew, the spare parts, for, for all the vessels.

Nikolas Tsakos: It's like running, let's say, you know, a very similar fleet of airplanes or a very similar fleet of Boeings in order to have the training for the crew, the spare parts for all the vessels, and it gives us a lot of flexibility.

Speaker #7: And it gives us a lot of flexibility.

Speaker #9: Great. And, and if you could clarify whether you've exercised the option, that you had when you were first announced the, BLCC new builds, and then secondly, typically you when you have a new build, you, you typically have a contract or a time-charter set up.

Paul Durham: Great. If you could clarify whether you've exercised the option that you had when you first announced the VLCC new builds. Secondly, typically, when you have a new build, you typically have a contractor or a time charter set up in advance of delivery. Do you currently have a time charter in place, or when do you anticipate securing a time charter for the Vs?

Speaker #9: In advance of delivery, do you currently have a time-charter in place or when do you anticipate securing a time-charter for the B for the Bs?

Nikolas Tsakos: Yes. I think what we did is we opted for the option, and we actually got an extra option for another couple of months because we believe that it's good to maintain these price levels going forward in a very uncertain environment. Options are always valuable. Actually, yes, we have three firm vessels right now, plus an additional option in the same yard in the same quality. Right now, the VLCC market is a very hot market. We have actually three of our existing VLs opening in the next six months, and we see a lot of appetite. We're in the process of renewing some of the existing VLs going forward with significant increased base rates and profit-sharing arrangements. The new orders, there's a lot of appetite, but it's still early to make a decision.

Speaker #7: think, what we did is we we opted for the option and we actually got an extra option for another, couple of months. because we believe that, it's good to maintain this, price levels, going forward in a very uncertain, environment.

Speaker #7: So options are always, valuable. So actually, yes, we, we yes. have three firm vessels, I, I right now, plus an additional, option in the same yard, in the same, quality.

Speaker #7: process of renewing, some of the existing VLs going forward with significant, increased base rates and profit-sharing arrangements. and, the, the, the new orders, we are there's a lot of appetite, but it's still early.

Speaker #7: to, to make a decision. So we would be taking care more of the three existing ships, very young ships also themselves. but, it, it, it gives us, with six VLs, and perhaps more coming, it's starting to get critical mass in that, in that, very, I would say, interesting segment of, of the tanker market.

Nikolas Tsakos: We will be taking care of more of the three existing ships, very young ships also themselves. It gives us, with six VLs and perhaps more coming, it's starting to get critical mass in that very, I would say, interesting segment of the tanker market.

Speaker #9: Great. Thank you. And then could you preview? I know that you talked about, you know, declaring the second-half dividend in the November timeframe.

Paul Durham: Great, thank you. Could you preview? I know that you're talking about declaring the second half dividend in the November timeframe. Can you preview it at this point in time, or is it just too early?

Speaker #9: Can you preview it at this point in time or is it just too early?

Speaker #7: Well, I, you know, I, I, I, I think it, it is early, but we are looking at the healthy market. So we are expecting, you know, to, to for the board to opt for a for a healthy for a healthy dividend.

Nikolas Tsakos: I think it is early, but we are looking at a healthy market. We are expecting for the board to opt for a healthy dividend. I think we are in a good space, I would say.

Speaker #7: So I think, we are we are in a good space, I would say.

Speaker #9: Okay. and then on the last call, you talked about potentially, you know, given the current valuation and the equity market, you talked about potentially restructuring the company or looking at alternatives, maybe splitting the company into, you know, a com a company that has two folds, one with, you know, long-term time-charters in place, especially on the, you know, when you look at the deep, you know, the shuttle tankers, versus, you know, assets that have shorter-term, time-charters.

Paul Durham: Okay. On the last call, you talked about potentially, given the current valuation in the equity market, potentially restructuring the company or looking at alternatives, maybe splitting the company into a company that has twofold, one with long-term time charters in place, especially when you look at the shuttle tankers versus assets that have shorter-term time charters. Any progress or any comments on that type of move?

Speaker #9: Any progress or any comments on, you know, that type of move?

Nikolas Tsakos: First of all, we are not restructuring the company. We have never restructured any part of our debt or the company. I think, you know, Tsakos Energy Navigation Ltd is one of the few companies that, you know, I'm just joking, but we're not restructuring. We're always thinking out of the box. I think we are very happy to where we are today with the growth of the company, with the profitability of the company. One thing that I would say, like other shipping companies, but especially ourselves, we are disappointed is with the share performance. We're trying to, you know, I think our company should have easily a market cap of $2 billion from where it is today. We're always thinking of ways to get shareholders' interest and appreciation.

Speaker #7: First of all, we are not restructuring the company. We have never restructured any part of our debt or the company. So I think, you know, Tsakos is one of the few companies that, you know, I'm just joking, but we're not restructuring.

Speaker #7: We were always thinking out of the box, I think we are very, we are very happy to where we are today with the growth of the company, with the profitability of the company.

Speaker #7: One thing that, I would say, like, like other shipping companies, but especially ourselves, we are disappointed is with the with the share performance and we're trying to, you know, I think our company should be, should have easily a market cap of 2 billion from where it is where it is today.

Speaker #7: But, so we're always thinking of ways to get shareholders' interest and appreciation. We are, I think we are going through a period that, with inflation, being around, we are going through a period where real assets matter.

Nikolas Tsakos: I think we are going through a period that, with inflation being around, we are going through a period where real assets matter. I think this is, you know, and we have very, very, very real assets and quite undervalued real assets. I think what we want to do is to be able to have a much more efficient, to make it more efficient for our shareholders. We have thoughts of perhaps having one of the largest shuttle tanker fleets plus a lot of long-term business and specialized vessels to do something down the road in the next, you know, in the next eight quarters, I would say, in perhaps putting the more specialized vessels in a vehicle that, of course, Tsakos Energy Navigation Ltd will be by far the major shareholder. Again, these are ideas that we are discussing with our investment bankers.

Speaker #7: So I think this is, this is, you know, and, and we have, you know, very, very, very real assets. and, and, and quite undervalued real assets.

Speaker #7: So I think what we want to do is to be able to, to, to have a much more efficient, to make it more efficient for our shareholders.

Speaker #7: So, yeah, we, we have thoughts of perhaps, having one of the largest shuttle tanker fleets plus, a lot of long-term business and specialized vessels to do something down the road in the next, you know, in the next eight quarters, I would say.

Speaker #7: In perhaps putting the more specialized vessels in a vehicle that, of course, ten will be by far the major shareholder. But, again, these are ideas that we are discussing with our investment bankers.

Speaker #7: But it's nothing, nothing imminent, I would say, for the next, four quarters.

Nikolas Tsakos: It's nothing imminent, I would say, for the next four quarters.

Speaker #9: Okay, thank you. And then could you preview or give me an idea of sort of the direction of OPEX and G&A over the second half of the year?

Paul Durham: Okay. Thank you. Could you preview or give me an idea of the direction of OpEx and G&A over the second half of the year? It looks like over the first half, G&A especially might have had some one-time items in it.

Speaker #9: It looks over like the first half G&A, especially might have had some one-time items in it.

Speaker #7: Yes. Well, I, I, I, I, I think, we are putting a lot of emphasis if, you know, we, we, we are, running things, hands-on.

Nikolas Tsakos: Yes. I think we are putting a lot of emphasis, you know, we are running things hands-on, and we look at our technical managers almost on a weekly and monthly performance. We are facing some inflation issues, but I think we have been able to cap the majority, and we still have an average for such a big diversified fleet, which includes DP vessels, which the operating expense of those ships are in the high teens, and we're still under $10,000 on operating expenses. I think, you know, we put a lot of emphasis in running a tight ship, literally. I believe that we will be able to maintain the expenses there.

Speaker #7: And we, we look at our technical management, managers, almost on, on, on a weekly and monthly performance. we are facing some inflation issues, but, I think we have been able to, to cap the majority and we're, we, we still have an average for such a big diversified fleet.

Speaker #7: Don't we, which includes, DP vessels, which, you know, the operating expense of those ships are in the high teens. and we're still under 10,000 dollars, on, on, on operating expenses.

Speaker #7: So I think, you know, we, we, we put a lot of emphasis in, in, in, running a tight ship, literally. I, I believe that we will be able to maintain the expenses there.

Speaker #9: Great. Thank you for your time.

Paul Durham: Great. Thank you for your time.

Speaker #7: Thank you. Thank you.

Nikolas Tsakos: Thank you.

Speaker 11: Thank you.

Speaker #2: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we pull for questions.

Speaker 9: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. There are no further questions at this time. At this point, I'd like to turn the call back over to Mr. Tsakos for closing comments.

Speaker #2: There are no further questions at this time. At this point, I'd like to turn the call back over to Mr. Sakos for closing comments.

Speaker #7: Well, again, thank you for attending our call. The first six months, and I think moving forward, has been an exciting time for the energy markets.

Nikolas Tsakos: Thank you for attending our call in the first six months, and I think moving forward has been an exciting time for the energy markets. I believe that we are here to see even more solid results coming forward. The energy part of the world economy is becoming more and more important. The players right now are getting more. We're seeing a shipping energy part of the business where really you have a two-tier market. You have vessels, and they're growing in numbers that are, I would say, they do not serve the core part of the business, which allows us with modern high-specification vessels to be able to have more opportunities in order to serve our major clients. I believe I am optimistic that we're going to be seeing at least in the near future another 18 months of a very solid, perhaps getting even stronger market.

Speaker #7: I, I believe that we are here to see even more solid results, coming forward. the, the energy is energy part of, of the world economy is becoming more and more, important.

Speaker #7: the players right now are getting more. We're seeing, a shipping energy, part of the business where, really you have a two-tier market. you have vessels, and they're growing in numbers that are, I would say, they do not serve the core part of the business.

Speaker #7: and this and which allows, us, with modern, high specification vessels, to be able to have more, opportunities, in order to serve, our, our major clients.

Speaker #7: so I believe, I, I am optimistic. That we're going to be seeing at least in the near future another, 18 months of a of a very solid, perhaps getting even, stronger, stronger market.

Speaker #7: And we see also actions from the administration in the United States to support shipping, which is important because shipping and energy transportation have always been in the background.

Nikolas Tsakos: We see also actions from the administration in the United States to support shipping, which is important because shipping and energy transportation have always been in the background. I mean, we provide a significant service, a very big service for the world economy. In a way, we are kind of the unsung sailors, not heroes, the unsung sailors of the world economy. I think it's good to see that people are paying much more attention to actually the services we're doing, be it on the LNG, be it on the crude, on the product segment. I will be in the United States in the next couple of weeks having meetings specifically on ways where seaborne transportation and especially energy transportation is going to be appreciated and more and assisted more. I think it is going to be good for the charters and the shipowners.

Speaker #7: I mean, we provide a significant service, a very big service for the world economy. But in, in, in a way, we are kind of the unsung sailors, not heroes, the unsung the unsung sailors of, of the world economy.

Speaker #7: And, and, and I think it's good to see that people are paying much more attention to actually the services we're doing, be it on the LNG, be it on the crude, on the product segment.

Speaker #7: I will be in the United States in the next couple of weeks, having meetings specifically on ways where sea-borne transportation, and especially energy transportation, is going to be appreciated more and assisted more.

Speaker #7: And I think we have, it is going to be good for, for, the charterers and, and the and the ship owners. So I, I think we have an optimistic view, going, going forward.

Nikolas Tsakos: I think we have an optimistic view going forward. With that, I would like to thank everybody. I'll ask Mr. Arapoglou, our Chairman, if he wants to have a closing statement.

Speaker #7: And with that, I would like to thank everybody. I ask Mr. Efstratios-Georgios Arapoglou, our Chairman, if he wants to have a closing statement.

Speaker #10: Thank you, Nicholas. I, I just to say that the we believe that market, does not continues not to appreciate, the, the nearly $4 billion of, of minimum contractor revenue for ten.

George Saroglou: Thank you, Nikos. Just to say that we believe that the market continues not to appreciate the nearly $4 billion of minimum contracted revenue for Tsakos Energy Navigation Ltd and keeps looking at us like any other shipping company with high volatility and low predictability of income and revenues. We feel that perhaps the market has begun focusing on it, but we feel that the value of the stock is much higher than where it is today. As far as dividend is concerned, the CEO just mentioned that the Board is going to look at the results of the third quarter and be able to perhaps announce, make a decision on the dividend in a few months' time. We continue to be very positive on that front. Thank you very much. Thank you, Nikos.

Speaker #10: And, and keeps looking at us like any other shipping company with high volatility and low predictability of income and revenues. We feel that perhaps the market has begun focusing on it, but we feel that the value of the stock is much higher than where it is today.

Speaker #10: And as far as, dividend is concerned, the CEO just mentioned that, the board is going to look at, the results of, third quarter, and be able to perhaps announce, make a decision, on, on the dividend, in a few months' time.

Speaker #10: So we continue to be very positive on, on that front. So with that, thank you very much. thank you, Nicholas.

Speaker #7: Thank you. And, we, we I think we are, we, we will be I, I, I think the team will be attending, events in London, on for London International Shipping Week, including Capital League event, where our CFO is going to be, a speaker.

Nikolas Tsakos: Thank you. I think the team will be attending events in London for London International Shipping Week, including the Capital Link event where our CFO is going to be a speaker, and the following week in New York. Hope to see you face to face. Thank you very much, and have a good rest of the day.

Speaker #7: And, and, and the following week, in New York. So hope to see to see you face-to-face. And thank you very much. And, have a good rest of the day.

Speaker #10: Yes.

Speaker 9: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.