TEN Ltd. Reports Record Profits for Year-End and Fourth Quarter 2023 Results and Dividend of $0.60 per Common Share
- Record annual profits exceeding $300 million, a 60% increase from the previous year
- EPS of $9.93 and EBITDA of $490 million reported
- 100% increase in common dividends for shareholders
- Dynamic growth and fleet renewal initiatives, including a green ship initiative
- Market fundamentals remain strong for TEN
- None.
Insights
The announcement of TEN Ltd's record annual profits and the increase of their common dividend is a significant indicator of the company's financial health and strategic direction. The 60% increase in net income, coupled with a 24% increase in adjusted EBITDA, reflects a robust operational performance. The substantial rise in average TCE per ship per day suggests that TEN has effectively capitalized on favorable market rates, which is indicative of a strong demand for shipping services. The reduction in total debt obligations is a positive sign for investors, as it indicates prudent financial management and a commitment to de-leveraging the balance sheet.
From a financial perspective, the increase in vessel operating expenses and overhead costs is noteworthy, as it reflects the broader inflationary pressures affecting global economies. However, the company's ability to maintain solid cash balances despite these pressures is commendable. The dynamic growth and fleet renewal, with a focus on 'green ship initiatives', aligns with the increasing emphasis on environmental sustainability in the shipping industry and may provide a competitive advantage in the long run.
The doubling of the common dividend is a clear signal to shareholders of the company's confidence in its financial position and future prospects. However, investors should be aware of potential risks associated with the shipping industry, such as fluctuations in global trade volumes, charter rates and operational costs, which could impact future earnings.
Analysis of TEN's financial results reveals a strategic positioning within a shipping industry that continues to show strong market fundamentals. The company's focus on fleet renewal and the green ship initiative demonstrates an understanding of the long-term trends in the industry, particularly the shift towards more environmentally friendly operations. This strategic foresight is likely to resonate with stakeholders who are increasingly valuing sustainability.
The high vessel utilization rate and increased TCE suggest that TEN is optimizing its fleet efficiency, which is important in an industry where margins can be significantly impacted by operational downtime. The decision to invest in new vessel acquisitions and the construction of a suezmax DP2 Shuttle Tanker with a long-term charter agreement indicates a forward-looking approach to securing future revenue streams.
It's important to note that the shipping industry is cyclical and sensitive to global economic conditions. While the current market fundamentals are strong, changes in trade policies, geopolitical tensions, or economic downturns could alter the landscape. Investors should consider how TEN's strategic initiatives position it to weather potential industry downturns and capitalize on market upswings.
TEN's green ship initiative represents a proactive approach to the increasing regulatory and societal pressures for environmental sustainability within the maritime sector. The investment in newer, more efficient vessels is likely to reduce greenhouse gas emissions and operational costs over time. This initiative not only addresses the environmental impact but also aligns with the International Maritime Organization's (IMO) regulations aimed at reducing the shipping industry's carbon footprint.
From an environmental perspective, the modernization of the fleet with more energy-efficient ships can lead to a reduction in fuel consumption, which is one of the most significant operational expenses for shipping companies. Furthermore, the company's commitment to environmental sustainability can enhance its reputation among consumers and investors, potentially leading to more business opportunities and a stronger market position.
However, the transition to greener operations requires substantial capital investment and the returns on such investments may take time to materialize. Stakeholders should evaluate the balance between the short-term financial impact of these investments and the long-term benefits of improved sustainability and regulatory compliance.
Record annual profits in excess of
EBITDA of
Dynamic growth and fleet renewal with green ship initiative
Market fundamentals remain strong
ATHENS. Greece, March 27, 2024 (GLOBE NEWSWIRE) -- TEN, Ltd. (TEN) (NYSE: TNP) (the “Company”) reports results (unaudited) for the fourth quarter and the year ended December 31, 2023.
FINANCIAL RESULTS FOR THE YEAR 2023
TEN celebrated its 30th year as a public company, with another record year performance. In 2023 it generated
Adjusted EBITDA for the year reached
Average TCE per ship per day for 2023 amounted to
Depreciation and amortization combined for 2023 remained relatively stable compared to 2022 at
The Company’s total debt obligations were reduced from the 2022 level and settled at
Interest and finance costs continued to be impacted by higher rates globally and reached
Vessel overhead costs per ship per day in 2023 were at
Cash balances, as on December 31, 2023 remained solid at
FINANCIAL RESULTS FOR THE FOURTH QUARTER OF 2023
The fourth quarter of 2023 was a transitional period for TEN, as it operated six fewer vessels than the same period in 2022 due to vessel sales and before the add-on of the five new vessel acquisitions. This resulted to an adjusted EBITDA of
This reduction in the number of vessels led to equivalent decreases in voyage, charter hire and operating expenses when compared to the 2022 fourth quarter with the most notable decrease being in voyage expenses which were
Depreciation and amortization remained largely unchanged at
As a result of this reduced fleet, operating income in the fourth quarter of 2023, amounted to
Fleet utilization reached
The average daily Time Charter Equivalent (TCE) rate per vessel in the fleet reached
DIVIDEND – CORPORATE AFFAIRS
Reflecting its strong performance and positive market fundamentals, the Company will pay
SUBSEQUENT EVENTS
In February 2024, TEN signed a newbuilding contract with a major South Korean yard for the construction of one option one suezmax DP2 Shuttle Tanker with expected delivery in 2026. The vessel has a 10-year employment with a major energy concern with embedded charterer options to increase the duration of the charter to a maximum of 20 years. The expected gross revenues over the maximum life of this contract are about
Under the recently announced agreement to acquire five-modern eco-friendly tankers employed on term contracts, the first vessel, the DF Montmartre, a 2023-built LNG-powered LR2 aframax tanker was delivered to the Company on March 26, 2024. The other four are expected to join the fleet between early April 2024 and June 2024.
STRATEGY & OUTLOOK
TEN celebrated its 30th year with a record performance and is on a springboard for future growth. Following its tried and tested strategy of vessel renewal, it has sold nine vessels of an average age of 18.5 years and replaced them with 16 vessels with an average of 1.3 years, whilst increasing its dwt by 1.5 million tonnes.
It has used the strong market fundamentals to extend and secure new employments with profit-sharing arrangements for 32 of its vessels, resulting to
TEN’s CURRENT NEWBUILDING PROGRAM
| # | Name | Type | Delivery | Status | Employment |
| 1 | Paris 24 | DP2 Shuttle Tanker | Q2 2025* | Under Construction | Yes |
| 2 | Athens 04 | DP2 Shuttle Tanker | Q2 2025* | Under Construction | Yes |
| 3 | TBN | Suezmax – Scrubber Fitted | Q2 2025* | Under Construction | Under Discussion |
| 4 | TBN | Suezmax – Scrubber Fitted | Q4 2025* | Under Construction | Under Discussion |
| 5 | TBN | MR – Scrubber Fitted | Q1 2026* | Under Construction | Under Discussion |
| 6 | TBN | MR – Scrubber Fitted | Q1 2026* | Under Construction | Under Discussion |
| 7 | TBN | DP2 Shuttle Tanker | Q3 2026* | Under Construction | Yes |
| 8 | TBN | DP2 Shuttle Tanker | Q4 2026* | Option TBC | Under Discussion |
*Expected delivery as per shipbuilding contracts
ABOUT TSAKOS ENERGY NAVIGATION
TEN, founded in 1993 and is one of the first and most established public shipping companies in the world. TEN’s diversified energy fleet currently consists of 74 double-hull vessels, including four DP2 shuttle tankers, two scrubber-fitted suezmax vessels and two scrubber-fitted MR product tankers under construction, constituting a mix of crude tankers, product tankers and LNG carriers, totaling 9.1 million dwt.
ABOUT FORWARD-LOOKING STATEMENTS
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. TEN undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.
Conference Call Details:
As announced previously, today, Wednesday, March 27, 2024 at 12:00 p.m. Eastern Time, TEN will host a conference call to review the results as well as management's outlook for the business. The call, which will be hosted by TEN's senior management, may contain information beyond what is included in the earnings press release.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 877-405-1226 (US Toll-Free Dial In) or +1 201-689-7823 (US and Standard International Dial In). Please quote “Tsakos” to the operator and/or conference ID 13745387. Click here for the additional participant international Toll-Free access numbers.
Alternatively, participants can register for the call using the call me option for a faster connection to join the conference call. You can enter your phone number and let the system call you right away. Click here for the call me option.
Simultaneous Slides and Audio Webcast:
There will also be a live, and then archived, webcast of the conference call and accompanying slides, available through the Company’s website. To listen to the archived audio file, visit our website www.tenn.gr and click on Webcasts & Presentations under our Investor Relations page. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
For further information, please contact:
Company
Tsakos Energy Navigation Ltd.
George Saroglou
President & COO
+30210 94 07 710
gsaroglou@tenn.gr
Investor Relations / Media
Capital Link, Inc.
Nicolas Bornozis
Markella Kara
+212 661 7566
ten@capitallink.com
| TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES | ||||||||||||
| Selected Consolidated Financial and Other Data | ||||||||||||
| (In Thousands of U.S. Dollars, except share, per share and fleet data) | ||||||||||||
| Three months ended | Year ended | |||||||||||
| December 31 (unaudited) | December 31 (unaudited) | |||||||||||
| STATEMENT OF OPERATIONS DATA | 2023 | 2022 | 2023 | 2022 | ||||||||
| Voyage revenues | $ | 220,241 | $ | 270,255 | $ | 889,566 | $ | 860,400 | ||||
| Voyage expenses | 36,674 | 46,137 | 155,724 | 209,890 | ||||||||
| Charter hire expense | 6,079 | 6,642 | 24,680 | 32,774 | ||||||||
| Vessel operating expenses | 49,300 | 50,033 | 194,914 | 190,268 | ||||||||
| Depreciation and amortization | 37,540 | 37,409 | 144,241 | 140,821 | ||||||||
| General and administrative expenses | 7,502 | 7,616 | 33,339 | 29,854 | ||||||||
| (Gain) Loss on sale of vessels | – | – | (81,198) | 440 | ||||||||
| Impairment charges | 26,367 | – | 26,367 | – | ||||||||
| Total expenses | 163,462 | 147,837 | 498,067 | 604,047 | ||||||||
| Operating income | 56,779 | 122,418 | 391,499 | 256,353 | ||||||||
| Interest and finance costs, net | (27,928) | (20,893) | (100,821) | (50,253) | ||||||||
| Interest income | 4,472 | 1,155 | 14,582 | 2,000 | ||||||||
| Other, net | (149) | 196 | (176) | 366 | ||||||||
| Total other expenses, net | (23,605) | (19,542) | (86,415) | (47,887) | ||||||||
| Net income | 33,174 | 102,876 | 305,084 | 208,466 | ||||||||
| Less: Net income attributable to the noncontrolling interest | (1,412) | (1,740) | (4,902) | (4,232) | ||||||||
| Net income attributable to Tsakos Energy Navigation Limited | $ | 31,762 | $ | 101,136 | $ | 300,182 | $ | 204,234 | ||||
| Effect of preferred dividends | (6,750) | (8,673) | (30,184) | (34,724) | ||||||||
| Undistributed income to Series G participants | – | – | – | (1,250) | ||||||||
| Deemed dividend on Series D preferred shares | – | – | (3,256) | – | ||||||||
| Net income attributable to common stockholders of Tsakos Energy Navigation Limited | $ | 25,012 | $ | 92,463 | $ | 266,742 | $ | 168,260 | ||||
| Earnings per share, basic | $ | 0.85 | $ | 3.17 | $ | 9.04 | $ | 6.02 | ||||
| Earnings per share, diluted | $ | 0.85 | $ | 3.17 | $ | 9.04 | $ | 6.01 | ||||
| Weighted average number of common shares, basic | 29,505,603 | 29,188,716 | 29,505,603 | 27,970,799 | ||||||||
| Weighted average number of common shares, diluted | 29,505,603 | 29,188,716 | 29,505,603 | 28,188,064 | ||||||||
| BALANCE SHEET DATA | December 31 | December 31 | ||||||||||
| 2023 | 2022 | |||||||||||
| Cash | 376,694 | 309,439 | ||||||||||
| Other assets | 236,800 | 371,911 | ||||||||||
| Vessels, net | 2,600,021 | 2,580,575 | ||||||||||
| Advances for vessels under construction and acquisitions | 150,575 | 46,650 | ||||||||||
| Total assets | $ | 3,364,090 | $ | 3,308,575 | ||||||||
| Debt and other financial liabilities, net of deferred finance costs | 1,562,657 | 1,577,877 | ||||||||||
| Other liabilities | 148,786 | 207,779 | ||||||||||
| Stockholders' equity | 1,652,647 | 1,522,919 | ||||||||||
| Total liabilities and stockholders' equity | $ | 3,364,090 | $ | 3,308,575 | ||||||||
| Three months ended | Year ended | |||||||||||
| OTHER FINANCIAL DATA | December 31 | December 31 | ||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net cash provided by operating activities | $ | 92,204 | $ | 132,836 | $ | 395,279 | $ | 288,529 | ||||
| Net cash used in investing activities | $ | (83,600) | $ | (100,198) | $ | (137,441) | $ | (301,814) | ||||
| Net cash (used in) provided by financing activities | $ | (25,415) | $ | 75,376 | $ | (190,583) | $ | 195,527 | ||||
| TCE per ship per day | $ | 35,565 | $ | 39,776 | $ | 36,822 | $ | 30,399 | ||||
| Operating expenses per ship per day | $ | 9,607 | $ | 8,827 | $ | 9,617 | $ | 8,467 | ||||
| Vessel overhead costs per ship per day | $ | 1,365 | $ | 1,263 | $ | 1,535 | $ | 1,248 | ||||
| 10,972 | 10,090 | 11,152 | 9,715 | |||||||||
| FLEET DATA | ||||||||||||
| Average number of vessels during period | 59.7 | 65.6 | 59.5 | 65.5 | ||||||||
| Number of vessels at end of period | 60.0 | 66.0 | 60.0 | 66.0 | ||||||||
| Average age of fleet at end of period | Years | 10.7 | 10.4 | 10.7 | 10.4 | |||||||
| Dwt at end of period (in thousands) | 7,408 | 7,570 | 7,408 | 7,570 | ||||||||
| Time charter employment – fixed rate | Days | 2,641 | 2,282 | 9,703 | 8,337 | |||||||
| Time charter and pool employment – variable rate | Days | 1,424 | 2,168 | 6,311 | 8,131 | |||||||
| Period employment coa at market rates | Days | 83 | 84 | 230 | 386 | |||||||
| Spot voyage employment at market rates | Days | 1,253 | 1,344 | 4,659 | 5,786 | |||||||
| Total operating days | 5,401 | 5,878 | 20,903 | 22,640 | ||||||||
| Total available days | 5,495 | 6,032 | 21,713 | 23,919 | ||||||||
| Utilization | 98.3% | 97.4% | 96.3% | 94.7% | ||||||||
| Non-GAAP Measures | ||||||||||||
| Reconciliation of Net income to Adjusted EBITDA | ||||||||||||
| Three months ended | Year ended | |||||||||||
| December 31 | December 31 | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net income attributable to Tsakos Energy Navigation Limited | $ | 31,762 | $ | 101,136 | $ | 300,182 | $ | 204,234 | ||||
| Depreciation and amortization | 37,540 | 37,409 | 144,241 | 140,821 | ||||||||
| Interest Expense | 27,928 | 20,893 | 100,821 | 50,253 | ||||||||
| (Gain) Loss on sale of vessels | – | – | (81,198) | 440 | ||||||||
| Impairment charges | 26,367 | – | 26,367 | – | ||||||||
| Adjusted EBITDA | $ | 123,597 | $ | 159,438 | $ | 490,413 | $ | 395,748 | ||||
| The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP measures used within the financial community may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods as well as comparisons between the performance of Shipping Companies. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. We are using the following Non-GAAP measures: | ||||||||||||
| (i) TCE which represents voyage revenue less voyage expenses is divided by the number of operating days less 136 days lost for the fourth quarter and 577 days for the twelve-month of 2023 and 151 days for the prior year quarter of 2022 and 761 days for twelve-month period of 2022, respectively, as a result of calculating revenue on a loading to discharge basis. | ||||||||||||
| (ii) Vessel overhead costs are General & Administrative expenses, which also include Management fees, Stock compensation expense and Management incentive award. | ||||||||||||
| (iii) Operating expenses per ship per day which exclude Management fees, General & Administrative expenses, Stock compensation expense and Management incentive award. | ||||||||||||
| (iv) Adjusted EBITDA. See above for reconciliation to net income. | ||||||||||||
| Non-GAAP financial measures should be viewed in addition to and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. | ||||||||||||
| The Company does not incur corporation tax. | ||||||||||||
FAQ
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