Release Date: September 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tsakos Energy Navigation Ltd (TEN, Financial) reported a 50% increase in dividend payments compared to 2023, highlighting strong financial performance and shareholder returns.
- The company has a significant cushion of at least USD 2 billion in contracted business, providing a stable revenue base.
- TEN has successfully modernized its fleet with dual-fuel vessels, aiming for significant emission reductions by 2030.
- The company maintains strong relationships with major oil companies, securing long-term contracts for its shuttle tankers.
- TEN's fleet renewal strategy includes acquiring 21 new vessels, enhancing its operational capacity and environmental efficiency.
Negative Points
- Fleet utilization dropped to 92% in the first half of 2024 due to scheduled dry dockings and repositioning voyages.
- Operating expenses increased in line with the larger fleet size, impacting overall cost management.
- The company's stock price has been volatile, with recent declines from its highs, raising concerns about market perception.
- TEN's stock buyback strategy is not prioritized, which may not appeal to investors looking for immediate capital returns.
- The tanker market faces challenges from geopolitical tensions and changes in trade flows, which could impact future demand.
Q & A Highlights
Q: Could you help me understand whether the $0.90 dividend will be paid this year or next year?
A: The dividend will be paid this year. We always announce the date after our strategy meeting, which is at the end of October. - Nikolas Tsakos, CEO
Q: Your stock price has been volatile. Where do stock buybacks fit in your capital allocation strategy?
A: Stock buybacks are not a priority in our financial strategy. We prefer to reward shareholders for staying with dividends rather than paying them to leave. - Nikolas Tsakos, CEO
Q: You ordered five LR1s. What is the rough total amount you'll spend on those? Is $350 million total appropriate?
A: Yes, approximately $350 million is correct. We have made the first down payment and expect to raise some bank debt on them. - Nikolas Tsakos, CEO and Harrys Kosmatos, Co-CFO
Q: During the quarter, you sold about $158 million of assets. How much did you spend on acquisitions, and did you make any new build payments?
A: We have increased our payments since the first quarter and made down payments for the remaining four LR1 vessels. Detailed information will be in the 6-K report. - Nikolas Tsakos, CEO and Harrys Kosmatos, Co-CFO
Q: Can you provide any closing comments on the company's future outlook?
A: We are focused on growth and maintaining strong relationships with major oil companies. Our investment in LR1s is strategic due to the low order book in that segment. We are also proud of our dual-fuel vessels and our new naval academy for training future personnel. - Nikolas Tsakos, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
