Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation conference call on the first quarter 2026 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board, Mr. Nikolas Tsakos, Founder and CEO, Mr. George Saroglou, President and Chief Operating Officer, and Mr. Harrys Kosmatos, CFO of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. At which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise that this conference is being recorded today. Now I pass the floor over to Mr. Nicolas Bornozis, President of Capital Link and Investor Relations Advisor for Tsakos Energy Navigation Limited. Please go ahead, sir.
Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the three months ended March 31st, 2026. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at ten, T-E-N, @capitallink.com and we will have a copy for you emailed right away. Please note that prior to today's conference call, there is also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please, we urge you to access the presentation slides on the company's website.
Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user-controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties which may affect TEN's business prospects and results of operations. At this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Please go ahead, Mr. Arapoglou.
Thank you Nicolas. Good morning, good afternoon to everyone. It's another time when the TEN model has proved it works in good and in bad markets, that's the way it's structured. It's being run as a portfolio of vessels rather than a number of individual vessels. This has led to sustainable profitability throughout the years, while continuously increasing dividends. It was just highlighted to me that the total dividend per share paid since inception to every preferred or common share of TEN is $1 every year. While at the same time renewing fleets and always maintaining a cash buffer of well above $350, although this number increases as the quarters roll out. This number is not a static number. It's a number that rolls over through the sale and purchase situation. It's not because we want to have $350 steady there, that's just the policy.
The policy to be able to have either a buffer or the ability to make acquisitions. At the moment, this model has booked upfront revenues for the next two years of $3.6 billion of all kinds, profit sharing and time charters, which is part of the TEN that we have. All this is benefiting, allow me to say, in a way, ironically, from strong market fundamentals. The result is continued strong business growth, as evidenced by the steadily increasing stock price, which I'm sure you have noticed. Thank you all. I now wish to once again congratulate Nikolas Tsakos and his team for the excellent performance on all fronts. Mr. Tsakos, the floor is yours.
Chairman, thank you very much. Good morning and good afternoon to everybody. It's with great pleasure that we announce another successful and very productive quarter. The first quarter, as I said, or as it was said in our press release, reflects market conditions, market fundamentals, and has a small effect in its latter part on geopolitics. The quarter that we are actually into now, and we're more than halfway into the second quarter, is a quarter that when we will report, we will have the very strong market effects. It looks like it's going to be a much stronger quarter either than this record quarter because of geopolitical effects.
Of course, the company is placed in a way over the last 33 years that it can sustain prolonged periods of crisis and also grow at the same time, modernize at the same time, and distribute significant dividends to its shareholders, having the management being the largest shareholder since inception of this company and continuing growing its shareholding. I think the statistic our chairman mentioned is that through thick and thin, since we've been 24 years public on the New York Stock Exchange and 33 years public all over, is a period that we have been able to pay an average of $1 a share to our shareholders, both to our 30 million outstanding shares of the common stock and the 10-plus million of our preferred.
As I said, the year started with events in Venezuela that created, again, dislocation, but opened new ton-miles and new barriers. Of course, more than halfway in the first quarter, we have had the Hormuz Strait, which, as we speak right now, has really isolated more than 20,000 seafarers who are trapped for the last three months. We have a very important issue for our seafarers, a grave situation. Of course, we are in a situation where almost 5% of the world's tonnage is being blocked, and this is a big number. Even more than that, more than 10% of the world's VLCCs, which are the vessels that usually trade the Hormuz Straits are being blocked. It's a time of dislocation that has created opportunities.
We, as many say, we prefer for us to earn a living when the seas are open, when there are no tariffs, there's no sanctions, but we have to navigate things the way we are. With that, George, would you like to give us a bit more detailed developments of what has happened? It's been, as I said, operationally, emotionally, because of the human factor, a roller coaster of a quarter, and we had to think more than once outside the box to be able to navigate and maintain the efficient chain of supply of energy for our clients. George.
Thank you, Nikos. We are pleased to report ` today on another profitable quarter. We maintain a steady course in the most turbulent geopolitical environment in recent memory. The year started with the political developments in Venezuela and escalated with the war in the Middle East and the closure of the Strait of Hormuz. Even before geopolitics took center stage at the end of February, tanker market fundamentals were strong, 2026 was forecasted to be another year with growth in global oil demand. With each passing year after 2022 establishing a new record for oil demand, while at the same time, tonnage supply remained very balanced. Since March, and so far, for the most part of the second quarter, geopolitical events have significantly added to the market strength.
TEN's diversified fleet, with its new charter renewal, together with the spot fleet and the profit-sharing market exposure, will continue to further benefit from this unprecedented market dislocation. We have a 33-year history as a public company. From four vessels back in 1993, we have turned every crisis the world and shipping has faced through the years into a growth opportunity. Today, TEN is one of the largest energy transporters in the world with a young, diversified, versatile pro forma fleet of 83 vessels. In slide four, we list the pro forma fleet of all conventional tankers, full crude and product carriers. The red color shows the vessels that trade in the spot market, and we have currently 11 tankers and our new buildings under construction.
With light blue, we have the vessels that are on time charter with profit sharing, 12 vessels, and with dark blue, the vessels that are on fixed rate time charters, 40 vessels. In the next slide, we list the pro forma diversified fleet, which consists of three LNG vessels, plus one LNG newbuild option, and our 16-vessel shuttle tanker fleet. We are one of the largest shuttle tanker operators in the world, with very young and technologically advanced vessels. We have six shuttle tankers in full operation after we took delivery of both Athens 04 and Paris 24 last year, which immediately commenced long time charters to an energy major.
If we combine the two slides together and account only for the current operating fleet of 63 vessels, 23 vessels or 37% of the operating fleet has market exposure, that is spot and time charter with profit sharing, while 55 vessels or 83% of the fleet is in secured revenue contracts. That is time charters and time charters with profit sharing. In the next slide, we list our clients with whom we do repeat business through the years, thanks to our industrial model. ExxonMobil is the largest revenue client, followed by Equinor, Shell, Chevron, TotalEnergies, and BP. We believe that over the years we have become the carrier of choice to energy majors thanks to the fleet that we have built, the operational and safety record, the disciplined financial approach, the strong balance sheet, and the strong financial performance.
Slide seven presents the all-in break-even cost for the various vessel types we operate in the company. We have a very simple operating model. We try to have our time charter vessels generate enough revenue to cover for the company's cash expenses. That is paying for vessel operating and finance expenses, for overheads, chartering costs, commissions, and we let the revenue from the spot and profit-sharing trading vessels make contributions to the profitability of the company. Thanks to the profit-sharing element, every $1,000 per day increase in spot rates has a positive $0.13 impact on the annual earnings per share, based on the number of TEN vessels that currently have exposure to the spot rates, 23 vessels. We have a solid balance sheet with strong cash reserves.
The fair market value of the operating fleet exceeds $4.6 billion against $2.1 billion of debt, and net debt to cap is around 48.4%. Fleet renewal and investing in eco-friendly, greener vessel has been key to our operating model. Since January 1st, 2023, we have further upgraded the quality of the fleet by divesting from our first generational conventional tankers, replacing them with more energy efficient new buildings and modern secondhand tankers, including dual-fuel vessels. In summary, we sold 18 vessels with an average age of 17 years and capacity of 1.7 million deadweight ton and replaced 34 contracted and modern acquired tankers with an average age of 0.5 years and 4.7 million deadweight capacity.
We announced today the sale and delivery to her new owners of a 10-year-old VLCC and TEN's agreement to buy, until the end of July, to in the money 2007-built Suezmax tankers currently operating under a sale and leaseback agreement. We continue to transition our fleet to greener and dual-fuel vessels. We are currently one of the largest owners of dual-fuel LNG-powered Aframax tankers with six vessels in the water. Tanker market fundamentals remain positive with the global order book still at a level equal to about 1/3 of the number of vessels over 15 years of age. CPRs are operating at full capacity. Scrapping activity is increasing and global oil demand is at record levels. The recent war in Iran, which resulted in the closure of the Strait of Hormuz, has provided further support to an already robust tanker market.
With that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance of the first quarter. Harrys?
Thank you George. Well, as both Nikos and George mentioned, 2026 started on a high note for the tanker markets as the event in Venezuela allowed for more barrels to be transported on non-sanctioned vessels, adding to global ton miles, already at high levels as a result of the war in Ukraine and the ongoing sanctions of Russian exports. On top of that, the war in Iran, which has led to over 5% of the global tanker fleet to be stranded within the Persian Gulf, has made countries like China and India to seek barrels from alternative sources, primarily from the Atlantic Basin, adding further miles to global seaborne transportation.
Against this backdrop, which spurred major oil companies to secure reliable tonnage for their long-term needs, TEN, with its modern fleet and operational expertise, was a prime beneficiary, which resulted in fleet utilization almost touching, but practicably unattainable, the perfect 100%. 98.3% compared to 97.2% in the 2025 first quarter. Quarters where each have just two vessels undergoing scheduled dry dockings.
These, combined with a fleet slightly larger than the one of the 2025 first quarter, both in terms of vessels and deadweight tons and vessels under secure revenue contracts, that is fixed time charters or time charters with profit sharing provisions, were 15% higher than the 2025 first quarter, and assisted TEN to generate voyage revenues of $253 million, $56 million higher from the first quarter of 2025. The resulting time charter equivalent rate per ship per day, reflecting the continuous robustness of the tanker market, reached almost $41,000 per day from about $31,000 per day in the 2025 first quarter, a 33% increase. The significant reduction of vessels operating in the spot rates, 48% lower from the 2025 first quarter, resulted in a $6.2 million drop in voyages expenses, to settle at $29.8 million.
Vessel operating expenses during the 2026 first quarter were at $53.3 million from $49.6 million in the 2025 corresponding quarter, a modest increase as a result of a bigger fleet in terms of vessels and deadweight tons. The resulting operating expenses per ship per day came in at a still competitive $9,952, about 1/4 of the TCE rate mentioned above, a very comfortable level. Depreciation amortization expenses, reflecting the increase in vessel sizes since the end of the 2025 first quarter, came in at $44.1 million from $41.1 million in last year same quarter. General and administrative expenses were at $12.4 million from $10 million in the 2025 first quarter, a still competitive level in the fleet of over 63 vessels.
As the result of all the above, TEN for the first quarter of 2026 generated an operating income of just about $110 million, without having any gains or losses from vessel sales. From $57 million in last year's first quarter, net of a $3.5 million capital gain. In other words, a $53 million increase or 93% higher from the levels of the 2025 first quarter. Despite an increase in our overall loans to correspond to the growth of the fleet, $2.1 billion this quarter from $1.9 billion at the end of the 2025 first quarter, interest costs fell by $3.2 million, the result of a lower interest rate environment and lower spreads. Interest income remained more or less the same as last year's quarter at $2.2 million.
Reflecting the above performance, both in terms of commercial and operational efficiencies and positive tanker market fundamentals, the resulting net income reached one of the highest levels over the last 10 years, $89 million from $37.7 million in the 2025 first quarter, 136% increase, or in dollar terms, a $51 million betterment. In terms of earnings per share, $2.72 this time from $1.04 in last year's first quarter, with an almost similar share count. Adjusted EBITDA for the quarter was higher by almost $55 million from the 2025 first quarter at $154 million, a 55% increase. These results have enabled the company to reward common shareholders with a handsome dividend, $1 per common share to be paid within July of this year, which is 67% higher the level paid at the same time last year.
If we are to include the February $0.50 payment, which we should, 36% higher from the total distributions made during 2025. From $10 in 2025 to $50 today, a very healthy $45 million distribution. On this happy note, I'll pass it back to Nikos. Thank you.
Thank you. Thank you, Harrys. I hope you keep on bringing happy news in the quarters that follow. I think as we said, it's been a period that we have not seen before. In general, the last six years have been years of continuous turmoil. For all of us who remember, we started with the pandemic, with COVID. All of a sudden, we had the world pausing for a while. We had the events in Ukraine followed immediately, almost by October 24, followed by the more recent events. Geopolitics have been driving part of the market. Even looking under those effects, the market still has legs, has good fundamentals. We believe that in a peaceful, normalized, open border world, the market will continue to be healthy. With that, as I said, we would open the floor for any questions.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question comes from the line of Omar Nokta with Clarksons Securities. Please proceed with your question.
Thank you. Hi, guys. Good afternoon and good morning.
Hi, Omar.
Hi. Just a couple of questions. Maybe just first, perhaps maybe big picture on the shuttle tankers. That segment provides a good amount of revenue visibility and also built-in earnings growth. That's obviously being built out quite a bit here over the next couple of years as you take delivery of those new buildings. How do you envision that business looking forward after those ships deliver? Do you think that they coexist within the broader conventional tanker business? Does it stay within TEN, or do you consider carving that out as its own separate vehicle?
Well, we are open to suggestions from people of your experience, and not only, but we are working as exactly one entity right now. Our new building department is busy making sure that sea trials are happening and the ships are being delivered. The focus right now is the operational focus. We are not planning to do the first, well, the third delivery of the series is at the end of July. I think sea trials are taking part in Samsung. The ships are state-of-the-art, very modern vessels at one of the best yards in the world. I think we have time to take this decision. No decision has been taken. Right now they are an integral part of TEN.
Thank you, Nick. A follow-up just on the LNG business. You recently ordered that new building plus one option. What does it look like in terms of employment opportunities now? I know there's been this interesting stunted LNG market where there was concern for this year that we were oversupplied, but that as you looked out towards 2028, 2029, as that vessel delivers or those two would deliver, it's much more constructive. What does the charter market look like, or what does interest look like for securing that ship today on a long-term contract?
Well, the market right now is in turmoil because you know better than me, part of the fleet and part of the production is being trapped or damaged. I wouldn't say that today really reflects things going forward. The market is still [audio distorted]. I think you can see fixers, which I don't consider something that would be interested starting for five or seven years in the 1980s. We are following this market closely. We have been initially one of the first movers in this market back in 2007 when we took delivery of our first steam turbine, the Neo Energy. Being a diversified fleet, we have the luxury that we do not have to run under every single low digit, mid digit business that is out there, like most of the companies that just specialize in gas. We have another 78 vessels at least to carry forward.
For us, it's a market which is very interesting operationally. We believe there is a future, but it's not a market that we are depending on, and that's why we're taking smaller steps, all of them depending on developments of technology.
If I may add, there is very strong energy demand throughout the world. Demand is going up, and there are no indications that this demand will dry up anytime soon.
As our chairman says, we have very strong indications for energy demand, including gas from all our clients. Today we could charter all our unchartered new buildings, including our later delivery VLs, which we ordered, thank God, at a very timely manner six months ago. We have the luxury to have more than $3.5 billion of backlog and waiting for the right trade and the right opportunities with the right client going forward.
Thank you. Okay. That's clear. Maybe just one final one, then I'll hop off the queue. Do you mind just maybe mentioning the Asahi Princess that you referenced in the release, loading up the Aframax cargo using road trucks. Can you just talk about what that is in terms of? Is that a means to bypass the Black Sea, and how do you see this application being used in other areas?
I think, Omar, it is closer to your parts of the world. It is bypassing the Red Sea, and of course, the Hormuz Strait. This was one of our big Middle East clients wanting to load from these parts of the world. We felt that it was too risky for our seafarers and for the crew, and for the vessel, and for the cargo. We gave them the idea, and they came with it to load from Eastern Mediterranean on product that was carried by 7,800 trucks. Actually, the loading took about two weeks. We have to try and think out of the box. It was successful. We were able to maintain a refinery who was thirsty for crude, was able not to have to shut down. We are just the messengers. We just carry the stuff.
We try to do the most we can do safely to make sure that the energy chain continues.
Yes. Okay. Well, thank you. That's very interesting. I'll pass it back.
Our next question comes from the line of Poe Fratt with Alliance Global Partners. Please proceed with your question. Poe Fratt, your line is live.
I apologize. Hello. I have a couple questions. The first of which is, can you just talk about the knock-on impact of cargo switching to the Atlantic? I've heard on another call that there's a squeeze on transits through the Panama Canal. Can you confirm that and then discuss what the impact is on the overall flows would be?
Yes. Again, good morning to you. It goes back to the new routings, that's another imaginative way. We've been seeing increasing calls to the Far East, this time through the Panama Canal. Of course, this really triples the ton-mile distance and more activity in the Atlantic, but it's actually through passage through the canal. You do West Africa through Panama Canal to the Far East, which is really something that we would have never thought of six months ago. This way you avoid having.
Yep. Are transits starting to become an issue there, Nikos, or is that a minor issue in the scheme of the global trade?
I think the way we see it, if things do not normalize in the next three months, we will be seeing more delays also happening on that side, on this canal.
Okay, great. Harry, in the last conference call, you talked about the impact of profit-sharing on the fourth quarter operating results. Do you have a number on the impact for the first quarter results from profit-sharing agreements?
Sure. Hi, Poe. Well, let me answer this differently. Last year, in the last quarter when we spoke last time, we made €27 million from profit-sharing. For the entire year of 2025, profit-sharing revenue came in at €45 million. So far this year, in the first quarter alone, profit-sharing revenues are in excess of €40 million. As you can imagine, we are very comfortable that this trajectory will last.
That's a good number.
We are already at the number that we made last year in just the first quarter.
Yep. That's really helpful. Can you just talk about your operating expenses looking forward? It looked like there was a one-time impact to G&A of about $3.5 million just due to the exchange rate changes last year. Can you just talk about G&A levels going forward, too?
We believe that we will be able to maintain them. The dollar has weakened on us and our major expenses are, I would say, the Euro. Yeah, this is an effect we might have. Again, it's a marginal cost in comparison to where we are. I think what we're also very focused on is to maintain our daily running expenses in this demanding environment steady. We were able to be under $10,000 on an average, very diversified fleet, which includes anything from LNGs to shuttle tankers, down to the MRs. Yes, the weak dollar has an effect on our balance sheet.
Okay, great. Looking into July, it looks like you're going to buy into sale-leasebacks. Can you quantify the amount you're going to spend there?
We cannot give all the secrets. Harrys comes up with imaginative ways of describing things, being from Corfu. I would say that we are buying assets that have been working for us, that we have built on a leaseback at less than 50% their current market value. Less than 50% their current market value. It's going to be a good situation.
Great. Thanks for your help.
Thank you.
Thank you, Poe.
As a reminder, if you would like to ask a question, press star one on your telephone keypad. Our next question comes from the line of Climent Molins with Value Investor's Edge. Please proceed with your question.
Hi, good afternoon, and thank you for taking my questions. I want to start by following up on Omar's question on the LNG side. Could you clarify until when is the option you hold for a second newbuild exercise? Well, how are you currently thinking about that?
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Well, we have, as I’m sure you know or you’ve seen, our AGM nicely timed next week just before the Posidonia events here in Greece. I think that’s when we will be discussing with our board the option of going forward. It won’t be that long. I think in the next couple of weeks, within this quarter, we will take a decision.
Okay. Makes sense. You sold the Ulysses at very solid pricing. As you think about your fleet positioning, is there, let’s say, any appetite to pursue additional sales over the coming months? You have several Suezmaxes, Aframaxes, LR2s, and even some smaller vessels built per 2010. How do you balance the free cash flow you’re currently generating in the market versus a potential sale?
This is a very good point, and this is what we try to do, is to balance. As I said, our aim is to part with our first-generation vessels. I think the market conditions today are giving us a lot of chances to do so. We will be seeing, I would say, a maximum of half a dozen sales. Don’t forget we have a new building program of 26 vessels. It’s the largest new building program than any of our peer group by far, thanks to our new building department here. We have taken delivery of four of those vessels so far, two late last year and two early this year. We still have a very big modernization program. I think we will be selling at today’s strong prices at least half a dozen ships from now to the end of the year.
Thanks for that, George. Final question from me, which is more on the modeling side. Harrys, this one may be for you. Could you confirm that the increase in net income attributable to a non-controlling interest is attributable to that, and this is where you hold a 51% stake?
Sorry, can you repeat because you were cutting off?
Yeah, I was asking about the increase in net income attributable to non-controlling interest and whether that’s attributable to the 2 Handysize?
Correct, yes.
Okay, perfect. That’s everything from me. I’ll turn it over. Thank you for taking my questions.
Thank you. Thank you all.
We have no further questions at this time. Mr. Tsakos, I’d like to turn the floor back over to you for closing comments.
Well, again, thank you very much for attending our first-quarter results. If anybody is in Greece for the Posidonia, we are having our annual meeting during that time, and we would love to host you so you could see the operation also. They have been very challenging times. We have to be continuously alert and take action, and this is what we do. We want to thank our men and women on the ships and those that are going through difficult times, we’re here to support them. We’re looking forward to announce, knocking on wood, even better results and in a peaceful environment for the second quarter. With that, thank you very much. Enjoy the dividend, and we will also do. Thank you.
Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.