TEN Reports 4Q Results

Monday, March 14, 2011

18th consecutive year of profitability Company declares quarterly dividend of $0.15 payable in April 2011 Total dividends reach $333 million since 2002 NYSE listing

2010 HIGHLIGHTS

- Voyage revenues of $408.0 million.
- Operating income of $80.7 million, after vessel impairment charge of $3.1 million.
- Net income of $19.8 million, after vessel impairment charge of $3.1 million.
- EPS (diluted) of $0.50 ($0.58 per share excluding impairment charge). 
- Average daily operating expenses per vessel decreased by 11.9% to $7,647.
- Fleet utilization of 97.6%.
- Sale of five tankers with a net gain of $19.7 million.
- Delivery of two newbuilding aframax tankers and acquisition of four panamax product carriers with employment.
- Change from twice yearly to quarterly dividends. Total dividends paid in 2010 of $0.60.
- $105 million raised in equity offerings.
- Approximately $1.0 billion in net income since NYSE listing. 


2010 FOURTH QUARTER HIGHLIGHTS

- Voyage revenues of $95.0 million.
- Operating income of $9.0 million, after impairment charge of $3.1 million.
- Income $0.5 million, before impairment charge of $3.1 million. Net loss of $2.6 million, after impairment charge.
- EPS (diluted) of $0.01, excluding impairment charge, or $(0.06) after vessel impairment charge. 
- Average daily operating expenses per vessel decreased by 16.7% to $7,284.
- Agreement to sell one aframax tanker with delivery in the first quarter of 2011.
- Payment of second quarterly dividend of $0.15 per share with respect to 2010 operations. 
- Agreed 15-year charters for two suezmax shuttle tankers to South American oil major.

ATHENS, GREECE – March 14, 2011 – TSAKOS ENERGY NAVIGATION LIMITED (“TEN” or the  “Company”) (NYSE: TNP) today reported results for the fourth quarter and full year ended December 31, 2010.

FULL YEAR 2010 RESULTS


Net income for the year ended December 31,  2010 amounted to $19.8 million (after an impairment charge of $3.1 million) compared to the net income of $28.7 million (after an impairment charge of $19.1 million) achieved in 2009. The decrease is primarily attributable to the weaker freight market in 2010 compared to 2009 and increased non-cash finance costs. The net gain on the sales of five vessels during 2010 amounted to $19.7 million compared to a net gain of $5.1 million on the sale of one vessel in 2009. The poor freight market in the fourth quarter of 2010 and increasing discrimination against older vessels resulted in the requirement for a further impairment charge of $3.1 million relating to the 1991 built aframax tanker Vergina II.  This vessel was one of the three vessels that incurred impairment charges totaling $19.1 million in 2009. Diluted EPS based on weighted average number of shares outstanding was $0.50 versus diluted EPS of $0.77 achieved in 2009.

Voyage revenues, net of commissions and voyage expenses, totaled $308.4 million in 2010 compared to $351.6 million in 2009. The average number of vessels in the fleet decreased to 46.1 in 2010 from 46.6 in 2009, five vessels having been sold mostly in the earlier part of 2010 and six new vessels acquired mainly in the latter part of the year. The average time-charter equivalent (TCE) rate earned per vessel (voyage revenues less voyage  expenses) decreased to $19,825 per day in 2010 from $22,329 per day in 2009. Utilization of the fleet was 97.6% during this difficult year compared with 97.7% in 2009. 

Depreciation and dry-docking amortization costs fell to $97.4 million from $101.5 million mainly as a result of vessel sales. Operating  expenses per vessel per day decreased to $7,647 from  $8,677  in  2009,  an  11.9%  decrease  as  a  result  of  reduced  costs  on  crew  expenses, stores, spares, insurance and lubricants. This was primarily due to the increased purchasing power of Tsakos Columbia ShipManagement S.A. (TCM), which took  over the fleet’s technical management in July, 2010. In addition, since 2009, the Company’s technical managers, on the Company’s instructions, took specific measures to reduce crew costs, which also benefited from an appreciation of the U.S. Dollar against the Euro. Insurance costs were also down due to a reduction in P&I Club back calls. Overhead expenses increased to $1,144 per vessel per day in 2010 from $1,083 in 2009, due to increased management fees and an incentive award of $0.4 million, offset by reduced G&A expenditure and reduced stock compensation expense. 

Interest and finance costs increased to $62.3 million in 2010 from $45.9 million in 2009, due mainly to negative non-cash movements in the valuations of non-hedging interest-rate and bunker swaps.

Net gains from vessel sales amounted to $19.7 million in 2010 relating mainly to the sale of the suezmax tanker  Decathlon and aframax tankers  Marathon and  Parthenon. Two aged panamax tankers, which incurred impairment charges in 2009, were also sold, but at prices approximating book value. The sales reflected the Company’s continued  policy of fleet renewal and opportunistic divestments.

 

Source: TSAKOS ENERGY

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