Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the First Quarter 2024 Financial Results. We have with us today Mr. Takis Arapoglou, Chairman of the Board; Dr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr. George Saroglou, Chief Operating Officer 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. I must advise you, this conference is being recorded today. I will now pass the floor over to Mr. Nicolas Bornozis, President of Investor Relations Advisor for Tsakos Energy Navigation. Please go ahead, sir.

Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis of Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the first quarter ended March 31, 2024. If you do not have a copy of today's earnings release, please call us at 212 661 7566 or email us at [email protected] and we will have a copy for you emailed right away. Please note that parallel 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 presentation, the webcast, 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. And 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. And before turning the floor over to the Chairman, I'd like to mention that we also have today with us as part of the management team Mr. Harrys Kosmatos, the co-Chief Financial Officer, and congratulations Mr. Kosmatos for your new role. And at this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Please go ahead, sir.

Thank you, Nicolas. Good morning and good afternoon to all. Thank you again for joining our call today for Q1 results. Despite a historically low utilization of 91%, mainly due to a large number of dry dockings that we decided to undertake, we continue to deliver operational excellence on the back of a very positive market driven by strong shipping fundamentals and geopolitical events, which are both expected to continue in the foreseeable future. Our comfortable equity-generating ability and cash position allows us to double our semi-annual dividend from last year. We are primarily taking advantage of the favorable market by selling older vessels and purchasing new, modern green vessels, reducing the age of our fleet and positioning ourselves to capture accretive business that comes our way from our demanding blue-chip clients. The result of all this is the steady increase of our stock price in recent months as the market recognizes our robust business model, which makes us very happy. Once again, we extend our congratulations to Nikos Tsakos and his team, and best wishes for sustaining TEN’s stellar performance going forward. Thank you, and over to you, Nikos Tsakos.

Thank you, Chairman. We will have a new ticker starting as of July 1st. TEN will finally be TEN after almost 22 years, when our ticker belonged to another company that has since moved from the stock exchange. I see this as a good sign. The previous ticker took us from $3.00 in 2019 to over $30 last month. While I would prefer to keep my initials, I believe this change will enhance the company's identity. As you said, this first quarter has been a strong, profitable quarter and is a springboard for what we are going to achieve. We took many of our vessels out of service to prepare them for better days, looked at ships, and prepared them for sales. We also took delivery of about 14 vessels, while consistently increasing our cash position, which is now well above $450 million, approaching $0.5 billion in liquidity as we move into the second quarter. We're expecting a much better quarter. Although I have to say even the first quarter was healthy, we anticipate an even stronger second quarter. We are already seeing encouraging signs. Looking ahead, we are projecting a record year for 2024, as we did last year. Our optimism is based on unprecedented demand from major oil companies for quality assets. We are consistently being approached by major oil companies and first-class end-users or government bodies, even during festive times. The interest in our services is currently at an all-time high. This has been the most active period in the last five years for our business. I want to express gratitude to the crew on our ships, as their hard work keeps the operations running smoothly and allows us to secure long-term contracts. Overall, the market dynamics are favorable, with the exception of the LNG segment, which remains overbuilt. Most other segments appear well balanced. Thank you, and I will ask George to provide more detailed developments.

Thank you very much, Nikos. Good morning to all of you joining our earnings call today. 2024 continues to be another good year for tankers as the factors that elevated freight rates in the last two years remain in effect. Key takeaways for TEN during the first quarter of 2024, which was one of the busiest in TEN's history for fleet renewal and volume of sale and purchase transactions. First, we took delivery of the last two dual fuel LNG-powered aframax tankers in a series of four new builds that were constructed against long-term contracts with a major energy company. We started taking delivery of the first in a series of five high-spec, environmentally friendly tankers from Viken, with the remaining four to be delivered during the second quarter of 2024. Two of the five tankers are dual-fuel LNG-powered aframaxes. Combined with the four we built for another client, we now have six fully operational dual-fuel LNG-powered aframax tankers, representing one of the largest concentrations of LNG-powered aframaxes in the market. These six vessels mark TEN’s entrance into the realm of green tankers. Simultaneously, we continued selling older generation vessels. Since the start of 2023, we sold eight tankers built between 2005 and 2007. Starting in January 2023, we announced the sale of five vessels, including a 2005 built suezmax tanker. In total, we have sold 13 vessels averaging 17.5 years old, replacing them with 21 newer vessels that have doubled the deadweight capacity of those disposed of, with an average age of just one year. We have signed six new building contracts since the start of 2024 for one shuttle tanker and five LR1 tankers, bringing our current new building order book to 12 vessels. The freight market remains strong, and we continue to renew charters at higher rates. Oil majors are procuring vessels forward, indicating a market poised to sustain current freight levels. The order book remains low due to uncertainties regarding alternative fuels, with many yards reporting availability only after 2027. We are witnessing significant changes in trade flows due to Western sanctions on Russian oil and other geopolitical events. Global oil demand continues to rise, with expectations to reach approximately 103 million barrels per day in 2024, compared to around 102 million barrels per day in 2023.

Thank you, George. I am pleased to join my colleague here today. Since the beginning of 2024, we have actively participated in sale and purchase transactions, allowing us to divest some of our first generation tankers and replace them with new ones utilizing high-end green technology. From the sale of older vessels, we generated around $200 million, which, combined with strong cash flow from our fleet, has enabled us to maintain solid cash reserves. During this time, while engaging in this green initiative, we took eight vessels for scheduled maintenance and repairs, which caused a natural drop in fleet utilization.

As Paul mentioned, the maintenance initiated a natural decline in fleet utilization from 96.4% in the same quarter of 2023 to 91.3% in this quarter. Despite this, voyage revenues totaled $202 million, and operating income, including $16.2 million in capital gains from vessel sales, settled at $76.2 million. Our resulting net income reached $54 million, translating to $1.06 in earnings per share. Operating expenses have been influenced somewhat by inflationary pressures, reaching $48.6 million, similar to the first quarter of 2023. Operating expenses per ship per day were approximately $9,400. The average time charter equivalent per ship per day was around $33,400, which, while a healthy number, was impacted by the reduction in vessels and the associated dry dockings and repairs during the quarter. EBITDA at the end of Q1 2024 was about $101 million and is expected to return to higher levels once the new vessels start generating their returns. Since the start of Q1 2024, we have noted continued demand for our vessels, which we expect to enhance our cash reserves going forward, as the fundamentals in the tanker market remain solid in light of various geopolitical developments globally.

Thank you, everyone. It's good to share our developments with you. I think we've had one of the longest presentations today because of our busyness in recent months. But George, it’s better to be accurate than to misrepresent anything. I believe we used this time as a springboard into our next phase. Our very clear goal is to run one of the foremost environmental fleets. We achieved a major turn-around before, and I believe we can do it again with the support of our clients. Thank you, and we now open the floor for any questions you may have.

Good morning or afternoon. Thank you for taking my questions. I want to start by asking about the recent order for five LR1s. Should we consider this a fleet renewal effort, or is there a plan to increase exposure to that subsegment? And do you intend to fix those vessels on medium-term contracts before delivery, or would you be comfortable trading them on the spot market?

That's a great question. Our fleet list indicates we still have some older vessels like the Andes, which has been performing well throughout its service life, despite being built quite some time ago. The current order book shows 2% to 3% for these types of ships, indicating a good opportunity. So yes, it is a mix of fleet renewal and a strategic increase in exposure.

That's helpful. Thank you. Regarding long-term contracts, I noticed that your exposure to every $1,000 per day increase in rates has decreased to $0.14 from last quarter's $0.18. Could you provide commentary on some of the fixtures added recently?

By the end of the second quarter, it will closer to $0.20 from our calculations because we have refixed vessels at unprecedented levels. I cannot comment in detail as our competition may be listening. However, our minimums have doubled significantly in some cases from past profit circles.

Thank you. One more thing; last year you declared a special dividend alongside Q2 earnings. Given that Q2 earnings are expected to be significantly better than Q1, is there a chance of a similar special dividend this year?

That's a very good point. Last year, the extra dividend announcement went largely unnoticed by analysts, which was unfortunate. This year, we will not declare an extra dividend, as we'd rather include any increase in dividends in the regular second-half payout, assuming the market continues to rise, rather than risk a one-off perception. So while we expect strong results, our intention is to integrate any changes into our regular dividend strategy without separate announcements. Again, it's been a pleasure to share our developments. We have been operating for 31 years, and I look forward to breaking more records. Our performance, results, and dividend payments should help move our share prices closer to expected levels. I appreciate your support during this busy period of growth and adaptation. Thank you, and have a wonderful and peaceful summer. We will be working throughout.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.