TNP Tsakos Energy Navigation Ltd

TEN, Ltd (TEN) (NYSE: TNP) (the “Company”) today reported results (unaudited) for the quarter and nine months ended September 30, 2020.

NINE MONTHS 2020 SUMMARY RESULTS TEN generated a net income of $70.6 million in the nine months ended September 30, 2020, before second-quarter 2020 reported non-cash charges of $16.5 million, compared to $2.0 million for the same nine-month period in 2019.

Gross revenues amounted to $512.5 million, a $90.4 million, or 21.4%, increase over the 2019 equivalent nine-month period, despite three vessels undergoing dry-docking for survey and upgrading purposes.

Adjusted EBITDA for the nine months ended September 30, 2020 increased to $234.1 million, $67.0 million higher from the same period in 2019.

Operating income, before non-cash items, totaled $133.3 million, a 130% increase from the 2019 equivalent nine-month period.

The average daily time charter equivalent (TCE) rate per vessel of the fleet increased by 27.4% to reach $25,351.

Fleet utilization for the first nine months of the year at a still strong 95.2% after increased dry-dockings and pandemic related operational obstacles.

On September 30, 2020, total cash reserves stood at $236.5 million.

Six tankers with an average age of 14.7 years were sold in the first half of 2020 generating about $37.5 million free cash after repaying nearly $61.0 million of related debt. Additionally, during the year, the Company has taken delivery of four environmentally friendly state of the art vessels, two suezmaxes and two aframaxes on minimum five-year contracts to an oil major with expected TCE-basis revenues of about $200 million. These transactions resulted in the reduction of the fleet’s average age by about three years and further enhanced its modern profile.

Vessel operating expenses were at $133.4 million, just under the operating expenses in the 2019 nine-month period with the same average number of vessels.

Average daily operating expenses per vessel in the 2020 first nine months also remained at a relatively stable level of $7,757.

Total finance costs remained steady at $61.0 million, almost exactly the level of the 2019 nine-month period, of which bank loan interest amounted to $35.4 million. A reduction of $18.5 million due to lower average outstanding debt, lower market interest rates and lower average margins in this nine-month period.

Total debt outstanding as of September 30, 2020 stood at $1.504 billion.

Q3 2020 SUMMARY RESULTSIn what is the seasonally slowest quarter, TEN’s net income for the three-month period that ended on September 30, 2020 reached $1.4 million compared to a net loss of $9.5 million in the same quarter of 2019. An $11.0 million positive turnaround.

Gross revenue generated by TEN’s vessels amounted to $142.8 million, 9% more than in the 2019 third quarter resulting to an EBITDA of $48.1 million.

Despite the additional pressure created by the global slow-down in demand due to the pandemic and the inevitable draw-down of global inventories, operating income increased by 29% from the 2019 third quarter to reach $15.1 million.

Average daily TCE rates per vessel increased to $20,451, compared to an average daily TCE per vessel of $18,837 in the 2019 third quarter.

Operating expenses of about $45.2 million were similar to those of the 2019 third quarter. Average daily opex per vessel at $7,927 increased modestly, due partly to a weakness in the US dollar, necessary dry-docking expenses and effects of the pandemic.

Finance and interest costs fell 39% to $13.5 million, due to a reduction in average debt outstanding between the two respective third quarters and a decrease in margins payable on several loans.

DIVIDEND – COMMON SHARESThe Company will pay a dividend of $0.1250 per common share on December 22, 2020 to shareholders of record as of December 16, 2020 bringing the total payments to holders of the common stock for 2020 to $0.50 per share on a reverse-split adjusted basis.

OTHER Following the full redemption of the $50 million Series B Preferred shares in July 2019, at the end of October 2020 TEN also repaid, at par, its 8.875% $50 million Series C Preferred Shares and reduced its total preferred shares by $100 million.

Since the commencement of the TEN’s share buyback program in May 2020, the Company has acquired approximately $10 million worth of common shares representing over 5% of the total (reverse-split adjusted) shares outstanding.

CORPORATE STRATEGY & OUTLOOKAs the rollercoaster year 2020 approaches to a close, a light glimmers at the end of the tunnel in the form of a vaccine that hopefully cures all.

In the meantime, TEN continues its steady course through these turbulent times.

The strong market at the start of the year gave us the opportunity to charter-out at accretive rates a number of our vessels operating in spot trades. At the same time, we sold six tankers with an average age of 14.7 years and replaced them with four brand new, purposely-built eco-designed vessels with solid long-term employment which will add $200 million, over 5 years, in TCE-basis revenues.

Concurrently, we took the opportunity of the distressed newbuilding prices to order two specialized vessels, one DP2 shuttle tanker and one LNG carrier, today both with long-term charter contracts.

Additionally, we have continued the reduction of our preferred securities and bank debt, whilst maintaining our uninterrupted dividend policy and strong cash reserves.

Looking forward, a normalization of the pandemic should revitalize world trade and materially increase oil demand, resulting in a stronger freight market. The historically low supply of tonnage currently in existence should assist in boosting rates and asset values significantly, providing better opportunities to divest our first-generation vessels and enhance profitability further.

In the meantime, we spare no effort in securing the well-being of our seafarers and thank them for their heroic efforts in maintaining our flawless operations and high utilization record in this unprecedented challenging environment.

We wish you all a SAFE Thanksgiving and better days ahead.

CONFERENCE CALLAs previously announced, today, Monday, November 23, 2020 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 that which is included in the earnings press release.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 877 553 9962 (US Toll Free Dial In), 0808 238 0669 (UK Toll Free Dial In) or +44 (0)2071 928592 (Standard International Dial In). Please quote "Tsakos" to the operator.

A telephonic replay of the conference call will be available until Monday, November 30, 2020 by dialing 1 866 331 1332 (US Toll Free Dial In), 0808 238 0667 (UK Toll Free Dial In) or +44 (0)3333 00 9785 (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.

ABOUT TENTEN, founded in 1993 and celebrating this year 27 years as a public company, is one of the first and most established public shipping companies in the world. TEN’s diversified energy fleet currently consists of 68 double-hull vessels, including one LNG carrier and one suezmax DP2 shuttle tanker under construction, constituting a mix of crude tankers, product tankers and LNG carriers, totalling 7.6 million dwt.

ABOUT FORWARD-LOOKING STATEMENTSExcept 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.

For further information, please contact:CompanyTsakos Energy Navigation Ltd.George SaroglouCOO+30210 94 07 710gsaroglou@tenn.gr

Investor Relations / MediaCapital Link, Inc.Nicolas BornozisMarkella Kara+212 661 7566ten@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									Nine months ended
			September 30 (unaudited)									September 30 (unaudited)
	STATEMENT OF OPERATIONS DATA		2020					2019				2020					2019
	Voyage revenues	$	142,834				$	131,002			$	512,503				$	422,066
	Voyage expenses		37,242					30,132				105,363					96,888
	Charter hire expense		5,471					2,728				16,033					8,094
	Vessel operating expenses		45,246					44,766				133,440					134,163
	Depreciation and amortization		33,144					34,522				102,477					104,065
	General and administrative expenses		6,591					7,143				21,859					20,375
	Loss on sale of vessels		-					-				3,050					-
	Impairment charges		-					-				13,450					-
	Total expenses		127,694					119,291				395,672					363,585
	Operating income		15,140					11,711				116,831					58,481
	Interest and finance costs, net		(13,485	)				(22,133	)			(60,958	)				(60,988	)
	Interest income		28					690				538					3,238
	Other, net		(140	)				(3	)			377					(34	)
	Total other expenses, net		(13,597	)				(21,446	)			(60,043	)				(57,784	)
	Net income (loss)		1,543					(9,735	)			56,788					697
	Less: Net (income) loss attributable to the noncontrolling interest		(123	)				206				(2,668	)				1,312
	Net income (loss) attributable to Tsakos Energy Navigation Limited	$	1,420				$	(9,529	)		$	54,120				$	2,009
	Effect of preferred dividends		(9,204	)				(10,204	)			(28,268	)				(30,613	)
	Undistributed income to Series G participants		-					-				(1,370	)				-
	Deemed dividend on Series B preferred shares		-					-				-					(2,750	)
	Deemed dividend on Series C preferred shares		(2,493	)				-				(2,493	)				-
	Net income (loss) attributable to common stockholders of Tsakos Energy Navigation Limited, basic	$	(10,277	)			$	(19,733	)		$	21,989				$	(31,354	)
	Net income (loss) attributable to common stockholders of Tsakos Energy Navigation Limited, diluted	$	(10,277	)			$	(19,733	)		$	24,013				$	(31,354	)
	Earnings (Loss) per share, basic	$	(0.55	)			$	(1.11	)		$	1.16				$	(1.78	)
	Earnings (Loss) per share, diluted	$	(0.55	)			$	(1.11	)		$	1.16				$	(1.78	)
	Weighted average number of common shares, basic		18,605,661					17,825,746				18,937,444					17,633,473
	Weighted average number of common shares, diluted		18,605,661					17,825,746				20,681,143					17,633,473
	BALANCE SHEET DATA		September 30					December 31
			2020					2019
	Cash		236,493					197,770
	Other  assets		290,639					261,607
	Vessels, net		2,574,077					2,633,251
	Advances for vessels  under construction		77,493					61,475
	Total assets	$	3,178,702				$	3,154,103
	Debt, net of deferred finance costs		1,495,003					1,534,296
	Other liabilities		262,897					147,488
	Stockholders' equity		1,420,802					1,472,319
	Total liabilities and stockholders' equity	$	3,178,702				$	3,154,103
			Three months ended									Nine months ended
	OTHER FINANCIAL DATA		September 30									September 30
			2020					2019				2020					2019
	Net cash from operating activities	$	45,098				$	36,769			$	187,179				$	121,373
	Net cash used in investing activities	$	(86,375	)			$	(27,453	)		$	(70,274	)			$	(60,297	)
	Net cash provided by (used in) financing activities	$	21,217				$	(24,898	)		$	(78,183	)			$	(104,598	)
	TCE per ship per day	$	20,451				$	18,837			$	25,351				$	19,900
	Operating expenses per ship per day	$	7,927				$	7,603			$	7,757				$	7,679
	Vessel overhead costs per ship per day	$	1,117				$	1,213			$	1,232				$	1,166
			9,044					8,816				8,989					8,845
	FLEET DATA
	Average number of vessels during period		64.1					64.0				64.8					64.0
	Number of vessels at end of period		65.0					64.0				65.0					64.0
	Average age of fleet at end of period	Years	9.2					9.0				9.2					9.0
	Dwt at end of period (in thousands)		7,119					6,936				7,119					6,936
	Time charter employment - fixed rate	Days	2,030					2,425				6,953					7,090
	Time charter employment - variable rate	Days	1,225					1,589				4,448					4,817
	Period employment (coa) at market rates	Days	58					177				234					630
	Spot voyage employment at market rates	Days	2,171					1,289				5,261					4,143
	Total operating days		5,484					5,480				16,896					16,680
	Total available days		5,898					5,888				17,749					17,472
	Utilization		93.0	%				93.1	%			95.2	%				95.5	%
	Non-GAAP Measures
	Reconciliation of Net income (loss) to Adjusted EBITDA
			Three months ended									Nine months ended
			September 30									September 30
			2020					2019				2020					2019
	Net income (loss) attributable to Tsakos Energy Navigation Limited		1,420					(9,529	)			54,120					2,009
	Depreciation and amortization		33,144					34,522				102,477					104,065
	Interest Expense		13,485					22,133				60,958					60,988
	Loss on sale of vessels		-					-				3,050					-
	Impairment charges		-					-				13,450					-
	Adjusted EBITDA	$	48,049				$	47,126			$	234,055				$	167,062
	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 226 days  lost for the third quarter and 618 days for the nine-month of 2020 and 125 days for the prior year quarter of 2019 and 339 days for the nine-month of 2019, 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) 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.