Tsakos Energy Navigation Limited (TEN) has reported unaudited results for the second quarter and first half of 2003.
Net revenues for the second quarter of 2003 were $61.5 million, a 122% increase over the $27.8 million generated in the second quarter of 2002. This increase reflected the expansion in the fleet (average number of vessels of 25.4 in 2003 vs. 17.0 in 2002) as well as the strong charter market. Net income for the second quarter of 2003 was a record $18.7 million versus $2.2 million in the second quarter of 2002. Earnings per share were a record $1.08 as compared with $0.13 per share in the like period of 2002.
Interest and finance costs were
$3.3 million in the second quarter of 2003 compared with $3.8 million in the second three months of 2002, as lower effective interest rates more than offset the increase in debt associated with TEN's fleet expansion. Depreciation and amortization of deferred dry docking charges increased to $10.4 million in the most recent quarter versus $6.5 million in the second quarter of 2002, reflecting fleet expansion. Vessel operating costs in the second quarter of 2003 were $11.9 million up from $7.4 million in the second quarter of 2002. The increase arose from fleet expansion, somewhat higher insurance costs and the pressures of a weak U.S. dollar.
Net revenues for the first six months of 2003 were $117.2 million, a 113% increase over the $55.1 million generated in the first half of 2002 reflecting major expansion in the fleet (average number of vessels in the 2003 period was 24.5 versus 16.6 in the first half of 2002) and the strong charter market. Net income for the first half of 2003 established a record of $36.8 million as compared with $7.3 million in the year earlier period. This includes a contribution of $0.7 million from the joint venture between TEN and Lauritzen Kosan A/S. Basic earnings per share also reached a new record of $2.15 measured against $0.51 per share for the first six months of 2002.
Interest and finance costs were $6.3 million for the first six months of 2003 versus $5.3 million for the first half of 2002 reflecting significant expansion of the fleet and increase in borrowings to support the program. Depreciation and amortization of dry docking expenses also increased, totaling $19.6 million in the first half of 2003 vs. $13.1 million in the year earlier period. Vessel operating expenses also rose reflecting the increased number of ships, but per vessel costs were well contained ($5,638 per vessel in the first half of 2003 as compared with $5,459 per vessel in the first six months of 2002) despite higher insurance costs
, an industry-wide factor, and the pressures from the weakened U.S. dollar.
The organic expansion program launched in 1997 continued in earnest during the first half of 2003 with TEN taking delivery of four newbuildings including one aframax and three panamaxes. Additionally, last week TEN took delivery of another aframax, the Parthenon, and will take delivery of the last panamax in a series of four, the Andes, in September. Overall, the program, commenced in 1997, will have added sixteen newbuilding vessels by September 2003. Future newbuildings include three handysized products carriers scheduled for delivery in June 2004, December 2004 and June 2005. Additionally, TEN expects delivery of two suezmaxes in October and November 2005, respectively. This brings the total number of newbuildings that have been ordered since 1997, including options, to 26 vessels, all of which have been contracted with the Imabari Group in Japan and the Hyundai Group in South Korea.