TSAKOS ENERGY NAVIGATION REPORTS SECOND QUARTER AND SIX MONTH FINANCIAL RESULTS FOR THE PERIODS ENDED JUNE 30, 2012

News Release Tsakos Energy Navigation Ltd. August 6, 2012

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Dividend of $0.15 cents declared for payment on September 14,
2012
Charter extensions of 36 months aggregate for two tankers with $20
million minimum
revenues
$10.1 million in operating income
2012 SECOND QUARTER AND RECENT
HIGHLIGHTS
&#56256;&#56451; Voyage revenues of $99.0 million
&#56256;&#56451; 46 out of 48 vessels with positive EBITDA
&#56256;&#56451; EBITDA totals $35.3 million
&#56256;&#56451; Vessel average daily operating expenses down 4% to
$7,505
&#56256;&#56451; $10.1 million in operating income compared to $1.7 million loss in
the 2011 quarter
&#56256;&#56451; Net loss of $5.7 million compared to a net loss of $18.1 million
in the 2011 quarter
&#56256;&#56451; Strong liquidity maintained of $221 million as of the end of
second quarter
&#56256;&#56451; Commencement of new accretive four-year charter for LNG carrier
Neo Energy
&#56256;&#56451; Total of four new charters since April 2012 with future minimum
gross revenues of $62
million over their respective fixtures spanning from one to five
years
&#56256;&#56451; Active fleet utilization of 98%
&#56256;&#56451; Quarterly dividend of $0.15 per share paid May 25, 2012, and a
further quarterly
dividend of $0.15 per share declared today
&#56256;&#56451; $62.7 million raised in equity offering
&#56256;&#56451; Order of new tri-fuel 162,000 cbm LNG
carrier
&#56256;&#56451; Option for a further LNG carrier
Athens, Greece – August 3, 2012 – Tsakos Energy Navigation Limited (TEN or
the
“Company”) (NYSE: TNP) today reported results (unaudited) for the
second quarter and first
six months of 2012.
SECOND QUARTER RESULTS
Revenues, net of voyage expenses and commissions, were $72.0
million in the second quarter
of 2012, an increase of 12.7% over the second quarter of 2011,
despite a continuation of the
difficult freight market as a result of tanker oversupply.
However, there was considerable relief
in the second quarter of 2012 in the form of reduced bunker costs
for spot vessels by 5% as oil
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2
prices fell and from reduced consumption, especially by the VLCCS
which incurred lengthy
repositioning voyages last year.
On average, TEN’s fleet had 48.0 vessels (including a
non-operating VLCC La Prudencia which
is held for sale) versus 47.5 vessels in the prior year quarter.
Excluding La Prudencia, fleet
utilization remained high at 98.4%. The average daily time charter
equivalent rate per vessel was
$17,714 compared to $16,426 in the second quarter of 2011, and
$17,129 in the first quarter of
2012. Rates for most sectors were not significantly different from
those of the second quarter
of 2011 except for the handysize vessels where rates were down,
but this was outweighed by
the impact of the LNG carrier, Neo Energy
which
earned nearly four times as much as the rate it
was earning in the second quarter of 2011. The VLCC
La Madrina, which is also held for sale,
was active during the quarter and earned a break-even rate which
allowed it to generate a
positive EBITDA.
Total operating costs for the second quarter of 2012 amounted to
$32.1 million versus $33.1
million for the same period last year and $35.5 million in the
first quarter of 2012. Average daily
operating costs per vessel were $7,505 in the second quarter of
2012 compared to $7,826 in the
same period of 2011, and considerably less (by 10%) from the
unusual level reached in the first
quarter of 2012 caused by high non-deferrable dry-docking
expenditure. Cost savings on
purchases achieved by the technical managers, and the
strengthening of the US dollar against
the Euro were also factors in the reduction.
Depreciation and dry-docking amortization costs totaled $24.9
million in the second quarter of
2012 compared to $26.0 million in the second quarter of 2011, due
to cessation of depreciation
following the impairment and categorization as held for sale of
the two older VLCCS at the end
of 2011. Technical and commercial management fees were
approximately the same as in the
previous second quarter at just under $4.0 million. G&A costs
were down by nearly 10% from
the previous second quarter due to savings in most categories.
Interest and finance costs in the second quarter of 2012 were
$16.1 million, nearly 5% down
from the previous second quarter, but up by $5.8 million from the
first quarter of 2012. This
was mainly due to flat movements in the valuations of non-hedging
interest rate swaps in the
second quarter of 2012, compared to over $3 million gains in the
first quarter of 2012. There
was also a negative valuation movement on the bunker swap of $1.9
million, but this was
because of lower bunker prices in the quarter the results of which
outweighed the negative
movement on the related swap.
The second quarter of 2012 ended in a net loss of $5.7 million or
$0.10 per share compared to
a net loss of $18.1 million in the second quarter of 2011.
TEN’s liquidity at the end of the second quarter of 2012 remained
strong. Total cash and
investments amounted to $221 million. Total indebtedness since the
second quarter of 2011,
fell by $53 million. During the second quarter of 2012 TEN issued
ten million shares in a
secondary offering which raised a net amount of $62.7 million.
Cash flow from net income
before depreciation, amortization and finance costs (“EBITDA”) was
$35.3 million. Despite
the difficult market, all the vessels generated positive EBITDA,
except for the non-operational
La Prudencia and the product carrier Aegeas
which
underwent an extensive dry-docking.
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3
SIX MONTH RESULTS
Revenues, net of voyage expenses and commissions, in the first six
months of 2012, totaled
$138.2 million, a modest improvement over the first half of 2011.
TEN operated an average of
48.0 vessels as compared with 47.7 in the first half of 2011,
although the VLCC La Prudencia did
not operate in the first half of 2012. The average daily time
charter equivalent rate per vessel
was $17,407 and daily operating expenses per ship were $7,906.
Depreciation and dry-docking
amortization costs were $49.6 million. General and administrative
expenses totaled $1.8 million,
compared to $2.2 million in the first half of 2011.
Interest and finance costs increased in the first half of 2012 to
$26.4 million, mainly due to the
reduction in positive swap valuation movements.
In the first half of 2012, there was a net loss of $14.5 million,
or $0.29 per diluted share.
QUARTERLY DIVIDEND
As announced today, the Company’s Board of Directors has declared
a quarterly dividend of
$0.15 per share of common stock outstanding payable on September
14, 2012 to shareholders
of record as of September 7, 2012. Inclusive of this distribution,
TEN has distributed in total
$9.525 per share in dividends to its shareholders since the
Company was listed on the NYSE in
March of 2002. The listing price was $7.50 per share taking into
account the 2-1 share split of
November 14, 2007.
SUBSEQUENT EVENTS
On July 27, 2012 the Company announced a two-year charter of the
2008-built aframax tanker
Nippon Princess to the existing charterer, a state owned company. The gross
revenues from this
charter over the corresponding renewal period are expected to be
$14.5 million.
On July 31 and in direct continuation of its prior charter, the
Company has been successful in
re-fixing the 2003-built panamax product tanker
Maya for a period of twelve months for a
minimum rate that is expected to generate gross revenues of over
$5.5 million.
FLEET STRATEGY & OUTLOOK
The vessel supply situation in the crude market continued to
provide a lid to any material rate
appreciation that the current world oil demand would have
triggered and for another quarter
the tanker industry fell victim of its prior and on occasions,
uncontrollable, lust for
newbuildings. For products market, weak demand in Europe and slow
growth in the U.S.
economy failed to strengthen rates. On a positive note however,
the supply situation seems to
be recalibrating towards some equilibrium with the tanker
orderbook, this quarter, down to
12% of the fleet (13% in Q1 2012) compared to 27% at the end of
2009. With world
economies, driven by China and India with annual GDP growths in
the 8.0-9.0% range
compared to 1.5% in the US, on the rebound, oil consumption levels
at record highs coupled
with political tensions around the world, the tanker market
downturn may well come to an end
sooner than expected.
TEN, due to its size, fleet diversification and modernity,
extended client reach and experience
in managing cycles, has rode another difficult quarter with fewer
bruises then one would had
anticipated. With over $221 million in cash and investments
reserves at times when liquidity is
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4
scarce for most the Company continued to operate in a
“business-as-usual” mode and used this
time not only to further solidify its exposure with major
international end-users but also to
expand its chartering horizons further afield with equally
pristine names. Its exposure in LNG
and shuttle tankers has allowed for such latitude.
Cost containment will continue to feature highly on the agenda
going forward and the close to
10.0% drop in quarter-over-quarter daily operating expenses,
without jeopardizing the safety of
our people on board, provides a sample of our intentions and
capability.
In terms of growth, management is currently exploring various
opportunities in LNG, shuttle
tankers and other mainstream offshore markets while keeping a
close eye on developments
with conventional tankers which to some degree is entwined to
developments in the shipping
banking sector. The placement of a state-of-the-art tri-fuel LNG
newbuilding order (and an
option for an additional vessel) entrenches the Company deeper
into this close-knit and high
barriers-to-entry market, and management believes that TEN can
leverage this modest
exposure to its long term advantage.
“Following our tested corporate strategy, TEN has managed to
absorb the pressures of the
tanker markets while navigating the Company closer to
profitability,” stated Mr. Nikolas P.
Tsakos, President and Chief Executive Officer of TEN. “As
mentioned in the past, high
utilization, cost control, cash generation and a healthy balance
sheet are the cornerstones of our
business model. We continue to be alert of market developments and
remain optimistic that the
Company is well positioned to benefit when the market turns,” Mr.
Tsakos concluded.
Conference Call
As previously announced, today at 10:00 a.m. Eastern Time, TEN
will host a conference call to
review the results as well as management's outlook for the
business. The call, which will be
hosted by TEN's senior management, may contain information beyond
what is included in this
earnings press release.
Conference Call details:
Participants should dial into the call 10 minutes before the
scheduled time using the following
numbers: 1 866 819 7111 (US Toll Free Dial In), 0800 953 0329 (UK
Toll Free Dial In) or +44
(0)1452 542 301 (Standard International Dial In). Please quote
"Tsakos" to the operator.
A telephonic replay of the conference call will be available until
August 10, 2012 by dialing 1
866 247 4222 (US Toll Free Dial In), 0800 953 1533 (UK Toll Free
Dial In) or +44 (0)1452 550
000 (Standard International Dial In). Access Code:
90295809#
Simultaneous Slides and Audio Webcast:
There will also be a simultaneous live, and then archived, slides
webcast of the conference call,
available through TEN's website (www.tenn.gr). The slides webcast
will also provide details
related to fleet composition and deployment and other related
company information. This
presentation will be available on the Company's corporate website
reception page at
www.tenn.gr. Participants for the live webcast should register on
the website approximately 10
minutes prior to the start of the
webcast.
Visit our company website at: http://www.tenn.gr
5
ABOUT TSAKOS ENERGY NAVIGATION
To date, TEN's pro forma fleet consists of 51 double-hull vessels
of 5.5 million dwt. This
figure includes one LNG carrier and two DP2 suezmax shuttle
tankers under construction
totaling 400,000 dwt. TEN’s balanced fleet profile is reflected in
23 crude tankers ranging from
VLCCs to aframaxes and 26 product carriers ranging from aframaxes
to handysize and two
LNG carriers. The Company has an option for a third LNG carrier to
be declared no later than
October 2012, totaling 86,000 dwt.
TEN’s employment profile (operating fleet as of August 3,
2012):
Period Employment – Fixed, fixed w/profit share & min max
(30)
Pool – market related (4)
Spot – market related (14)
TEN’s current newbuilding program:
• Suezmax Shuttle DP2 157,000dwt Q1 2013
• Suezmax Shuttle DP2 157,000dwt Q2 2013
• LNG TBN 86,000dwt/162,000 cbm Tri-Fuel Q1 2015
• LNG TBN 86,000dwt/162,000 cbm Tri-Fuel Q4 2015 (option)
(All vessels are Double Hull)
Forward-Looking Statements
This press release contains forward-looking statements (as defined
in Section 27A of the
Securities Act of 1933, as amended, and in Section 21E of the
Securities Exchange Act of 1934,
as amended). Words such as “expects,” “intends,” “plans,”
“believes,” “anticipates,” “hopes,”
“estimates” and variations of such words and similar expressions
are intended to identify
forward-looking statements. Statements contained in this press
release are based upon
information presently available to the Company and assumptions
that the Company believes to
be reasonable. The Company is not assuming any duty to update this
information should those
facts change or should the Company no longer believe the
assumptions to be reasonable. These
statements are subject to risks and uncertainties, including
without limitation, general market
conditions, the market for the Company's common shares, the
performance of the Company's
business and other risks detailed from time-to-time in the
Company's filings with the Securities
and Exchange Commission.
For further information please contact:
Company
Tsakos Energy Navigation Ltd.
George Saroglou, COO
+30210 94 07 710
gsaroglou@tenn.gr
Investor Relations / Media
Capital Link, Inc.
Nicolas Bornozis
Paul Lampoutis
+212 661 7566
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6
ten@capitallink.com
STATEMENT OF INCOME DATA 2012 2011 2012 2011
Voyage revenues $ 99,046 $ 101,309 $
201,276 $ 200,505
Commissions 1,503 3,718 5,172 7,073
Voyage expenses 25,576 33,707 57,888 57,240
Vessel operating expenses 32,110 33,139 67,650 64,735
Depreciation 23,685 24,851 47,369 49,086
Amortization of deferred dry-docking costs 1,211 1,194 2,268
2,302
Management fees 3,967 3,933 7,959 7,818
General and administrative expenses 952 1,054 1,784 2,193
Stock compensation expense 14 329 168 701
Foreign currency (gains)/losses (69) 240 (119) 637
Net gain on sale of vessels - 801 -
(5,001)
Total expenses 88,949 102,966
190,139 186,784
Operating income 10,097 (1,657) 11,137
13,721
Interest and finance costs, net (16,111) (16,945) (26,409)
(23,370)
Interest income 395 598 878 1,188
Other, net (38) (10) (19) (131)
Total other expenses, net (15,754) (16,357)
(25,550) (22,313)
Net loss (5,657) (18,014)
(14,413) (8,592)
Less: Net income attributable to the noncontrolling interest (42)
(113) (91) (250)
Net loss attributable to Tsakos Energy Navigation Limited
$ (5,699) $ (18,127) $ (14,504) $ (8,842)
Loss per share, basic $ (0.10) $ (0.39) $ (0.29) $ (0.19)
Loss per share, diluted $ (0.10) $ (0.39) $ (0.29) $ (0.19)
Weighted average number of shares outstanding
Basic 54,341,534 46,082,284 50,275,135 46,081,888
Diluted 54,341,534 46,082,284 50,275,135
46,081,888
TSAKOS ENERGY NAVIGATION LIMITED AND
SUBSIDIARIES
Selected Consolidated Financial and Other Data
(In Thousands of U.S. Dollars, except share and per share
data)
Three months ended Six months ended
June 30 June 30
BALANCE SHEET DATA June 30 December 31 June 30
2012 2011 2011
Cash and cash equivalents 212,679 175,708 227,472
Current assets, including cash 315,599 287,633 300,175
Investments 1,000 1,000 1,000
Financial instruments, net of current portion 0 0 959
Advances for vessels under construction 38,591 37,636 77,101
Vessels 2,640,669 2,639,878 2,704,861
Accumulated Depreciation (492,827) (445,518) (452,528)
Vessels' Net Book Value 2,147,842 2,194,360 2,252,333
Deferred charges, net 17,623 14,708
17,236
Total assets $ 2,520,655 $
2,535,337 $ 2,648,804
Current portion of long-term debt 225,600 196,996 120,218
Current liabilities, including current portion of long-term debt
297,362 279,712 210,617
Long-term debt, net of current portion 1,248,566 1,318,667
1,406,905
Financial instruments, net of current portion 13,004 17,800
25,546
Total stockholders' equity 961,723 919,158
1,005,736
Total liabilities and stockholders' equity $ 2,520,655 $
2,535,337 $ 2,648,804
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7
OTHER FINANCIAL DATA
2012 2011 2012 2011
Net cash from operating activities $ 16,356 $ 7,901 $ 34,633 $
35,619
Net cash (used in)/from investing activities $ (1,556) $ (39,007)
$ (2,482) $ (32,086)
Net cash (used in)/from financing activities $ 12,256 $ (1,048) $
4,820 $ (52,698)
TCE per ship per day $ 17,714 $ 16,426 $ 17,424 $ 17,203
Operating expenses per ship per day $ 7,505 $ 7,826 $ 7,906 $
7,654
Vessel overhead costs per ship per day $ 1,129 $ 1,231 $ 1,135 $
1,241
8,634 9,057 9,041 8,895
FLEET DATA
Average number of vessels during period 48.0 47.5 48.0 47.7
Number of vessels at end of period 48.0 47.0 48.0 47.0
Average age of fleet at end of period Years 7.5 6.7 7.5 6.7
Dwt at end of period (in thousands) 5,073 4,915 5,073 4,915
Time charter employment - fixed rate Days 1,222 811 2,364
1,610
Time charter employment - variable rate Days 1,456 1,676 2,797
3,517
Period employment (pool and coa) at market rates Days 526 695
1,070 1,415
Spot voyage employment at market rates Days 995 989 2,103
1,891
Total operating days 4,199 4,171 8,334 8,433
Total available days 4,368 4,320 8,736 8,631
Utilization 96.1% 96.6% 95.4%
97.7%
Utilization (excluding La Prudencia) 98.2%
97.4%
TCE represents voyage revenue less voyage expenses. Commission is
not deducted.
Operating expenses per ship per day exclude the vessel bare-boat
chartered out.
Vessel overhead costs include Management fees, General &
Administrative expenses and Stock compensation expense.
EBITDA (earnings before interest, taxes, net gain on sale of
vessels, depreciation and amortization) is a non-GAAP metric used within the
financial community for evaluating and comparing the performance of
companies.
The Company does not incur corporation
tax.</DIV></BODY></HTML>