Tsakos Energy Navigation. May 31, 2016 Q Earnings Conference Call

Transcription

1 TEN Ltd Tsakos Energy Navigation May 31, 2016 Q Earnings Conference Call

2 This presentation may contain forward-looking statements that are not based on historical fact, including without limitation, statements containing the words expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include those risks described from time to time in Tsakos Energy Navigation Ltd s (TEN) filings with the Securities and Exchange Commission, including, without limitation, the risks described in TEN s most recent Annual Report on Form 20-F on file with the Securities and Exchange Commission. These factors should be considered carefully and you are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date of this presentation, and TEN undertakes no duty to update this information. 2

3 Corporate Facts 65 vessels (pro forma) - excluding Shuttle NB option Average fleet age (3/31/2016): 8.6 years vs. 9.8 of world tanker fleet To reduce further with introduction of vessels under construction Fleet utilization in Q at 95.3% after early dry docking of three suezmaxes for regulatory upgrades 57% of 2016 and 46% of 2017 available days to date in secured revenue contracts (incl. CoAs) 21 vessels with ice-class capabilities Accumulated income since 2002 NYSE listing in excess of $1 billion $4.5 billion investment in 76 newbuildings since 1997 (including current orders) 31 vessels in secured contracts at strong rates 9 of which with profit sharing provisions Dividend payments since 2002 NYSE listing, including upcoming August 2016 payment, at $10.275/share ($7.50 issue price, split adjusted) Payment increased by 33% from Q Management interests have continued to invest in the Company confirming confidence in tanker markets 2.21 million common shares acquired from January 2016 to date at an average gross price of 5.84 per share Exploring opportunities through strategic relations with significant oil majors and end-users in conventional tankers (crude, products) 3

4 Q Highlights Net income of $25.4 million or $0.25 per diluted share Operating income of $33.1 million Healthy liquidity at March 31, 2016 of $276 million Pro-forma fleet of 65 vessels, totaling 7.2 million dwt, consisting of 47 tankers for trade in the crude space, three shuttle tankers, 13 tankers carrying products and two LNG vessels (including one tri-fuel 174,000m 3 LNG carrier under construction). 57.4% of 2016 ship available days (as at May 31, 2016) in secured revenues contracts Total contracted coverage of fleet in the water today at minimum $805 million with average charter length 2.4 years Total pro forma fleet contracted revenue at a minimum of $1.5 billion plus profit share Remaining new building program of one VLCCs, nine aframax crude carriers, two LR1 product carriers, one shuttle tanker and one LNG Low oil prices and dollar strength continue to provide material benefits TEN s bottom line 4

5 Fleet Composition 65 vessels (pro-forma) CRUDE TRADING PRODUCTS DP2/LNG m dwt m dwt 5 0.7m dwt One World Trade 1,775 VLCC 1, ,000dwt (1) Suezmax ,000dwt Aframax ,000dwt (2) Aframax LR ,000dwt Panamax ,000dwt Handymax ,000dwt Handysize ,000dwt (3) DP2 Shuttle ,000dwt 3 LNG ,602dwt (4) (5) 2 Sophisticated, multi-purpose fleet addresses all customer needs (1) Includes one VLCC currently under construction (2) Includes nine vessels under construction for Statoil business (3) Includes two LR1 vessels under construction (4) DP2 shuttles built with coated tanks but currently operate in crude trades Includes one shuttle tanker under construction and excludes an option for a second (5) Includes one LNG carrier (Maria Energy) under construction 5

6 Timely Acquisitions - Low Q1 Breakeven Rates (BE rates after Operating Expenses, G&A, Interest & Depreciation) VLCC $19,500* SUEZMAX $18,338 AFRAMAX $18,951 AFRAMAX LR2 $20,409 PANAMAX LR1 $14,826 HANDYMAX MR $17,249 HANDYSIZE MR $13,166 LNG $27,008 DP2 SHUTTLE $32,516 Tanker Rates Remain Strong YTD Av. Spot Rates VLCC $56,673 Suezmax $30,675 Aframax $26,605 Panamax $17,174 LR2 $23,343 LR1 $19,241 MR/Handy $16,956 Source: Howe Robinson Partners Daily Tanker Report, May 26, 2016 * Including M/T Ulysses delivered in May

7 Successful Employment Strategy Secured Coverage On Increase 50.0% 45.0% 40.0% 35.0% 39.5% 42.7% Every $1,000pd increase in our spot rates (annualized) equates to about $0.08 increase in EPS Average charter per vessel today at 2.4 years ~ 57.4% of 2016 days in secured charters (as at 5/16) To increase as some spot vessels revert to time charters 30.0% 25.0% 20.0% Secured employment charters, including long term contracts of newbuilding vessels, account for $1.5 billion in minimum revenues Consistently achieved 95%+ fleet utilization over the last five years 15.0% 10.0% 5.0% 14.3% 3.6% Profit share arrangements offer revenue upside and provide a cap to a potential downside 70% of 2015 revenues generated by top 10 customers 0.0% TC (Fixed) TCPS CoA Spot 57.4% Secured Employment 60.6% Flexible Employment As of May 31, operating vessels with secured chartered employment (profit-share vessels at min. rates) have until end of respective charters secured: 864 months forward coverage years av. TC and $805m in expected min. revenues 7

8 Demand Strong Positive Long Term Outlook Strong potential of China and India with a combined population of 2.5 billion in a world of 7.0 billion. Their per capita oil consumption is at extremely low levels and have already embarked on an aggressive industrialization program If China reaches the same levels of consumption per capita as Thailand, Chinese oil demand (based on existing population) would rise to 18mbpd, an increase of 10mbpd from current levels Non-OECD demand and in particular China and India remain the main drivers behind oil demand growth in China expected growth in % to 11.5mbpd. India expected growth for % to 4.2mbpd Oil demand expected to remain positive in the non-oecd (forecasted up 2.4% from 2016) and slightly higher than 2015 in the OECD as the economic recovery continues (with US demand expected to grow by 100,000 pd when the rest of the OECD is expected to be flat year over year) IEA expects oil demand to continue growing => 94.7mbpd in 2015, +1.8mbpd over 2014 and 95.9mbpd in 2016, +1.2mbpd over 2015 Crude oil tankers at strong levels and products following due to high global refinery utilization and strong refinery margins Global activity continues to strengthen. IMF expects global GDP to grow to 3.1% in 2015 and 3.2% in 2016 Source: International Energy Agency, Oil Market Report, December 2015 & Clarkson Shipping Intelligence Network BARRELS OF OIL PER CAPITA PER ANNUM (Source: BP Statistical Review of World Energy June 2015) 12 9 United States Japan EU Thailand China (incl. HK) India $ $ Oil Price vs. Global Oil Demand (in mbpd) $ $ $ $111 $ $ $ $ E Oil Demand Oil Price (Brent) 8 $120 $100 $80 $60 $40 $20 $0

9 Number of Ships Tanker Orderbook/Delivery Schedule vs. Fleet >15 years Total Orderbook of 722 tankers (312 of which are Products or 43%) vs. 782 vessels (308 of which Products or 39%) in fleet over 15 years of age 58% of product tanker orderbook are MRs In 2010 the tanker orderbook (vessels >30K dwt) was at 22.3%. In May 2016 it stood at 15.6% NB Delivery Schedule Current >15yrs Current O/B Over 15yrs 782 VLCC Suezmax Aframax Panamax Handy/MRs Source: Clarkson Research Studies, Oil & Tanker Trades Outlook - May 2016 Handy/MRs Panamax Aframax Suezmax VLCC 9

10 Solid Growth Through Cycles - Secured Dividend Payments TEN has always paid a dividend irrespective of market cycles - $ per share in total dividends since inception Long-term nature of Company s employment policy provides cash flow sustainability and visibility $400 Av. Yield of 5.25% pa 377 $ $ $30m Av. Dividends pa 292 $ $ $150 $100 $50 $ NOTE: EBITDA and Dividend numbers in USD millions EBITDA Dividends 10

11 Attractive Valuation Upside Potential Analyst Coverage (May 2016): 1. Morgan Stanley Overweight 2. JP Morgan Overweight 3. Wells Fargo Outperform 4. Credit Suisse Outperform 5. UBS Buy 6. Jefferies Buy 7. DnB Buy 8. Clarksons Buy 9. Stifel Buy 10. Seaport Global Securities Buy 11. Axia Ventures Buy 12. Evercore Buy Net Asset Value (05/31/2016) NAV (Fair Value): $11.84/share NAV (Book Value): $14.01/share All-Time High (12/07/2007): $38.90 All-Time Low (12/12/2012): $

12 Income Statement Three months ended March 31 (unaudited) STATEMENT OF OPERATIONS DATA Voyage revenues $ 122,091 $ 148,867 Voyage expenses 22,453 34,550 Vessel operating expenses 34,898 35,979 Depreciation and amortization 26,169 26,088 General and administrative expenses 5,432 6,554 Total expenses 88, ,171 Operating income 33,139 45,696 Interest and finance costs, net (7,947) (8,487) Interest income Other, net 11 (3) Total other expenses, net (7,824) (8,437) Net Income 25,315 37,259 Less: Net loss attributable to the noncontrolling interest Net Income attributable to Tsakos Energy Navigation Limited $ 25,425 $ 37,281 Effect of preferred dividends (3,969) (2,109) Net Income attributable to common stockholders of Tsakos Energy Navigation Limited $ 21,456 $ 35,172 Earnings per share, basic and diluted $ 0.25 $ 0.42 Weighted average number of common shares, basic and diluted 86,632,949 84,712,295 12

13 Balance Sheet BALANCE SHEET DATA March 31 December Cash 275, ,006 Other assets 156, ,636 Vessels, net 2,094,229 2,053,286 Advances for vessels under construction 402, ,238 Total assets $ 2,928,427 $ 2,893,166 Debt, net of deferred finance costs 1,417,250 1,392,563 Other liabilities 90,981 85,531 Stockholders' equity 1,420,196 1,415,072 Total liabilities and stockholders' equity $ 2,928,427 $ 2,893,166 13

14 Other Financial / Fleet Data Three months ended OTHER FINANCIAL DATA March Net cash from operating activities $ 53,709 $ 55,413 Net cash used in investing activities $ (96,732) $ (43,855) Net cash provided by/(used in) financing activities $ 20,893 $ (13,895) TCE per ship per day $ 23,378 $ 25,591 Operating expenses per ship per day $ 7,890 $ 7,995 Vessel overhead costs per ship per day $ 1,203 $ 1,456 9,093 9,451 FLEET DATA Average number of vessels during period Number of vessels at end of period Average age of fleet at end of period Years Dwt at end of period (in thousands) 5,220 5,102 Time charter employment - fixed rate Days 1,680 1,700 Time charter employment - variable rate Days Period employment (pool and coa) at market rates Days Spot voyage employment at market rates Days 1,749 1,659 Total operating days 4,301 4,467 Total available days 4,514 4,500 Utilization 95.3% 99.3% 14

15 TSAKOS ENERGY NAVIGATION, LTD For more information please contact: Paul Durham: Chief Financial Officer George Saroglou: Chief Operating Officer Harrys Kosmatos: Corporate Development Officer Tsakos Energy Navigation, Ltd 367 Syngrou Avenue Athens Greece Tel: Fax: