Tsakos Energy Navigation Reports Earnings Of $0.20 Per Share

Press Release
Wednesday, May 11, 2011

Four newbuilding suezmaxes (including two shuttle tankers) chartered for a combined 53 years with minimum total revenues of $720 million Fleet utilization at 99%

* Voyage revenues of $99.2 million
* Net income of $9.3 million
* Earnings per share (diluted) of $0.20
* Average daily operating expenses per vessel decreased by 11.1% to $7,482
* Sale of aframax tanker with a gain of $5.8 million
* Fleet utilization of 99%
* Quarterly dividend of $0.15 per share, paid February 1, 2011, and a further quarterly dividend declared of $0.15 per share (paid April 28, 2011)
* Contracts signed for construction of two suezmax DP2 shuttle tankers
* Entered eighteenth year in the public markets – profitable since inception

Athens, Greece--May 11, 2011--Tsakos Energy Navigation Limited (TEN) (NYSE: TNP) (the “Company”) today reported results (unaudited) for the first quarter ended March 31, 2011. TEN attained net income of $9.3 million (including a $5.8 million gain on the sale of a vessel) for the first quarter of 2011 compared to $19.5 million (including $14.3 million gains on the sale of vessels) for the first quarter of 2010. Diluted EPS this first quarter were $0.20.

Revenues, net of commissions and voyage expenses amounted to $72.3 million in the first quarter of 2011 as compared to $81.3 million in the first quarter of 2010. TEN operated an average of 47.9 vessels in the first quarter of 2011 compared to 46.6 in the first quarter of 2010. The average daily time charter equivalent (TCE) rate (voyage revenue less voyage expenses) was $17,964 versus $20,708 in the first quarter 2010 due to a market which saw some unusually depressed freight rates for crude carriers, brought about primarily by over-capacity in the global fleet. Despite the over-supply of vessels, oil demand remained buoyant and our fleet achieved utilization of 99%. Our fleet benefited from extra profit share earned by the three ice-class LR2 aframaxes operating in the Baltic, a short spike in aframax freight rates operating in the Mediterranean at the beginning of the Libya crisis and the gradual increase in product carrier rates which is continuing strongly in the second quarter. However, the aframaxes and product carriers operating in the spot market were hard hit by increasing oil prices, raising bunker costs by as much as 30% over first quarter, 2010. A part of these costs, however, was recouped through our bunker hedges.

Total operating expenses amounted to $31.6 million in the first quarter of 2011, compared to $34.5 million in the first quarter of 2010. Vessel operating expenses per ship per day decreased by 11.1% to $7,482 compared to $8,414 in the first quarter of 2010. The decrease in vessel operating expenses is partly attributable to the increased purchasing power of our new technical managers, Tsakos Columbia ShipManagement Ltd. (“TCM”), which took over the technical management of TEN’s fleet on July 1, 2010. Despite rising oil prices, expenditure on lubricants was down due to increased efficiencies in pricing and vessel supply. There was also reduced repair activity in the quarter compared to the previous year’s first quarter. Crew expenses also were held down as a result of actions taken over the past eighteen months in respect of crew composition.

Depreciation and dry-docking amortization costs were $25.3 million in the first quarter of 2011 versus $22.9 million in the first quarter of 2010. The increase was primarily due to the addition of six new vessels since the beginning of 2010 (the five vessels that were sold in 2010 were accounted for as held-for sale during the first quarter of 2010 and bore no depreciation in that quarter). Management fees in the first quarter of 2011 were $3.9 million versus $3.3 million in the first quarter of 2010, arising primarily from one extra vessel in the fleet and an increase in monthly fees since the prior-year’s first quarter. General and administrative expenses in the first quarter amounted to $1.1 million, just over $0.1 million higher than in the first quarter of 2010.

A gain of $5.8 million was achieved in the first quarter on the sale of the aframax tanker Opal Queen. This sale had been arranged in the latter part of 2010 and the vessel was accounted for as held-for-sale at the end of 2010. It was delivered to its buyers on March 23, 2011. After a prepayment of outstanding debt of $15.6 million, free cash from this sale amounted to $17.2 million.

Interest and finance costs fell to $6.4 million compared to $14.0 million in the first quarter of 2010 due primarily to positive valuations of $3.5 million on non-hedging interest rate and $2.6 million on bunker swaps, while in the previous year there were negative movements on swap valuations. Total loan and swap interest payable, less capitalized interest, was approximately $13.1 million in both first quarters.

“We are very pleased that net income in the first quarter of 2011 again exceeded our initial expectations, given the very difficult environment that confronted the tanker market” observed Mr. D. John Stavropoulos, Tsakos Energy Navigation’s Chairman of the Board. He added, “Management continues to control costs effectively, and achieve gains and the release of cash through strategic sale of assets, while maintaining virtually full employment of the fleet, thus remaining in a position to reward its shareholders with a generous dividend”.

Source: http://www.tenn.gr

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