Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call for the Third Quarter 2024 Financial Results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, Founder and CEO; Mr. Paul Durham, Chief Financial Officer; Mr. George Saroglou, President and Chief Operating Officer; and Mr. Harrys Kosmatos, co-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. I must advise that this conference is being recorded today. And now, I pass the floor to Mr. Nicolas Bornozis, President of 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 Investor Relations for Tsakos Energy Navigation. This morning, the company publicly released its financial results for the nine months and the third quarter ended September 30, 2024. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or e-mail us at [email protected], and we will have a copy for you e-mailed 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 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 also the 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 passing the floor over to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation, I'd like to congratulate the company for being awarded Tanker Operator of the Year after the inauguration of the first private Naval Academy in Greece that shows the efficiency of the company's operation and also its focus on the welfare of the crews. And with this, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation.

Thank you, Nicolas. Good morning and good afternoon to all. Thank you for joining our call today. In a market, admittedly, at its earlier peak yet still with firm business and geopolitical fundamentals, TEN continues to be sustainably profitable, steadily generating equity, maintaining its healthy cash position, increasing its dividends by 50%, offering a substantial dividend yield on today's price, and continuously renewing and increasing its fleet with state-of-the-art vessels. The company's industrial model, characterized by nearly $2 billion of forward contracted accretive revenue and proven operational excellence, shows the continuation of its stable, sustainably profitable performance and the rewarding of its shareholders, handling market cyclicality in an efficient way. So, congratulations once again to Nikos Tsakos and his management team on this performance and best wishes for more successes going forward. And with this, thank you, and over to Mr. Nikos Tsakos.

Thank you, Chairman, and good morning and good afternoon to all our listeners. It has been a positive nine months, and I think it has been a milestone growth period for the company. We have been given the ability to reallocate some of our older assets, monetize them, and move forward with a state-of-the-art new vessel program, acquiring five vessel companies earlier in the year, taking delivery of dual-fuel vessels, and we still have 12 vessels to be delivered starting from April '25. We're going to be taking over three or four vessels within 2025. So, it's a very active period for the company, and we've been able to increase liquidity, significantly pay down debt, continue and increase our dividend policy, both for the common and for the preferreds. We are facing an environment where there is a huge appetite for our services by our major clients. About 60% of our business is being provided by six major energy companies. I think Exxon is at the forefront, followed by Equinor, Total, BP, and Shell, all of them first-class names. We are very proud to be partners in energy transportation going forward. There is a big appetite for good-quality ships. We are at the crossroads of technology change in our business. The medium- and long-term prospects of the business are positive, as we have stated in our press release. However, we, as a company, as the Chairman said, we have been trying to mitigate the cyclicality, and I think we have been successful for the first 31 years so far, never stopping paying dividends even during difficult markets. Our share price, which peaked sometime in the summer, has seen quite a lot of profit-taking, which we regard positively because we have been a company that back in 2019, along with the whole industry, was trading in single digits. We have almost ten-folded it. Although there has been significant profit-taking, we believe that we are trading at not more than two or three times earnings, while all our clients we represent have an average of at least ten times earnings. We do not expect to immediately trade at ten times earnings, but at least double where we are today seems a fair valuation, and we are aiming to achieve this by explaining the different model of TEN, which is an industrial mover of energy for the major oil companies. As I said, milestone 2024 so far, a huge growth, very exciting prospects ahead. The business has nearly $2 billion of new business coming in. We have significantly increased rate from all the 30 vessels we renewed with our chartering department. And with that, I will ask our President to give us a quick overview of what is going on with the company. Thank you. George?

Thank you, Nikos, and good morning to all of you joining us for our earnings call today. 2024 continues to be a good year for tankers and for TEN for the same reasons we have seen over the last two and a half years. We are one of the largest and most established energy transporters worldwide. We had transported 460 million barrels per day in 2023 safely. That's about 23 days of U.S. consumption or 5% of global oil consumption. We have celebrated 31 years in the public markets, and since our listing in 2002 on the New York Stock Exchange, we have paid uninterrupted dividends to our common shareholders. We have built a large, modern, diversified fleet and developed an industrial shipping model. We have one of the highest caliber repeat clients, with ExxonMobil leading the way with 22% of our revenue, followed by Equinor, Shell, Chevron, TotalEnergies, BP, and others. As we embark on our decarbonization journey and our green energy program, we find ourselves in 2024 as one of the largest dual-fuel operators with operational vessels. We have six LNG Aframax-powered vessels and continue to be the carrier of choice for energy majors. We have fixed vessels whose charter expires or booked new business, and currently, our backlog stands at $1.8 billion. These represent minimum secured revenues, and the majority of these fixtures have some profit-sharing elements, with an average charter duration of two years. Thanks to our fleet's modernity and the efficiency of our technical managers, coupled with economies of scale, we have very high fleet utilization in excess of 92%. Our company is built on a very solid balance sheet, with our fleet fair market value around $4 billion. We have low debt of $1.8 billion while having 30 million common shares outstanding. The Tsakos family and management own over 30% of the shares outstanding. Despite being a top-of-class operator, our valuation is very low. In 2023, earnings per share returned $9.04; thus, we trade at a bit over two times earnings when our major clients trade at least ten times earnings. Moving on, TEN was created in the aftermath of OPA 90, which regulated the introduction of double-hull vessels. Since then, we have faced six major crises and managed every time to emerge stronger and bigger. Currently, our fleet comprises 74 vessels, with 62 operational and 12 new-builds under construction. The diverse fleet, catering to our clients' needs, spans crude carriers to product tankers, LNGs, and shuttle tankers. 31 of our 62 vessels have market exposure, representing 50%. Additionally, 49 of the 62 vessels in operation or 79% are secured in employment, time charters, or profit-sharing agreements. Our access to capital markets has grown the company, and we've utilized capital as a growth engine for our fleet renewal. We have built an industrial model with a list of blue-chip clients, with Exxon being our largest client followed by Equinor, Shell, Chevron, and Total. Regarding our all-in breakeven costs, the time charter vessels cover our operating expenses, and the spot trading vessels provide upside and dividend distributions. Each $1,000 increase in spot rates positively impacts our annual EPS by $0.16 based on current vessels in the spot market as of nine months in 2023. Managing debt is integral to the company's strategy and capital allocation. We have grown our fleet significantly with larger, more specialized vessels, while debt levels have remained manageable. Our net debt to capital currently stands at 44%. The next slide illustrates the fleet renewal and growth. Since January 1, 2023, we have sold 13 vessels with an average age of 17.5 years and 1 million total deadweight ton, replacing them with 21 vessels averaging 1 year and 2.3 million deadweight ton. This doubling in quality and size will help the company springboard into the next growth phase. How do you think this translates financially, Harrys?

Thank you, George. I'll take you over the financials for the nine months and the three-month results. During the first nine months of 2024, TEN operated 62 vessels, three more compared to the 2023 period, of which 11 underwent scheduled dry docking. Consequently, the fleet utilization for the 2024 nine months was reported at 92.2%, down from 95.6% during the same period in 2023. As energy majors' appetite for term employment increased, emphasis shifted towards securing revenue contracts to capitalize on elevated rates. Thus, the mix between secure revenue and spot-related charters revised to 82% and 45% fixed versus spot for the 2024 nine months compared to 77% and 54% for 2023. Additionally, in the first nine months of 2024, TEN generated gross revenues of $660 million and operating income of $236 million, which included approximately $49 million in capital gains. Fleet operating expenses totaled $147 million, increasing alongside the larger size of vessels in our fleet due to various acquisitions and divestments during this period. Interestingly, operating expenses per ship per day decreased by 3.3% compared to the nine months of 2023, settling at $9,306, thanks to efficient management by TEN's technical experts. The time charter equivalent per ship per day during this period, impacted by the dry dockings, settled at a robust $33,390, which is 3.6 times more than the daily operating expense rate. Reflecting all the above, we recorded a net income of $157 million for the first nine months, generating EPS of $4.62. Adjusted EBITDA for the nine months of 2024 stood at $314 million. Interest and finance costs totaled $87.4 million during this period, reflecting new loans for vessel acquisitions and new building deliveries, along with elevated global interest rates. However, TEN managed to mitigate this cost increase significantly through about $4 million in reduced coupon payments on outstanding preferred shares and $5 million savings from leasing arrangements in summer 2024. At the end of September '24, we had cash at the bank of $386 million, which is $9.5 million higher than the December 2023 level. Now, the results for the third quarter of 2024 were equally impressive, considering that three out of the 11 vessels undergoing dry docking occurred during this quarter. A fleet of 62 vessels, as opposed to 58 in the third quarter of 2023, generated gross revenues of $200 million and operating income of $57 million compared to $187 million and $53 million for the third quarter of '23, respectively. Neither of these two comparable quarters had gains or losses from vessel sales. Fleet operating expenses of $49 million for Q3 2024 were $1.6 million lower than the 2023 third quarter level, despite the aforementioned three dry dockings. Operating expenses per ship per day were at $9,188, almost $1,000 lower than the 2023 third quarter. Time charter equivalent per ship per day closed the quarter at $32,539, about $1,200 higher than last year's third quarter. The resulting net income of $26.5 million produced earnings per share at $0.67, reflecting a $5 million increase in depreciation and amortization cost in the larger fleet. Adjusted EBITDA finished the quarter at $100 million, $8.5 million above the level of 2023's third quarter. As of September 30, 2024, the fleet's fair market value was approximately $4 billion, with total debt at $1.8 billion, corresponding to the higher fleet size from the entry of four dual-fuel LNG-powered Aframax newbuildings and five additional second-hand vessels. The net debt to capital remained at an impressive 44%. In conclusion, supported by the positive results, TEN will pay a second semi-annual common stock dividend of $0.90 on December 20, 2024, bringing the total distribution for 2024 operations to $1.50 per common share, which is 50% higher than the 2023 amount—yielding approximately 7.5% at today's price. I’ll now turn it back to Nikos for final remarks.

Thank you, and thank you for describing a very busy period in an efficient manner. It’s important to note that we are maintaining our industrial energy transportation model. While we take advantage of market upside when available, we continue to ensure our long-standing practice of maintaining dividends. Over the last 31 years, we have ensured that our first-class charters—more than 60% or 70% of our income comes from long-term employment under profit-sharing arrangements—have covered all our obligations, including depreciation and interest payments. Our approach is not about being the most exciting shipping company; rather, we see ourselves as an industrial company aiming to sustain TEN for future generations, much like the Patek Philippe philosophy: you never own one; you keep it for the next generation. Our long-standing practice has allowed us to consistently pay dividends for 30 years. We have a diversified strategy compared to our peers, who each have a particular segment focus within the energy transportation industry. This diversity allows us to avoid the pitfalls we might otherwise face in a fragmented industry, giving us a competitive edge. As a result, our capacity is substantial; we provide training for our crew in our academies and have hands-on management. Shipping is not just business to us—it's a responsibility. We are proud of these results, even in an inflationary environment. Operating expenses increased by just 10%, while our income increased. This speaks volumes about our resiliency in hard times. Hence, it is crucial that we be valued more as an industrial or infrastructure company rather than merely as a shipping company. Despite the cyclicality of the market, we strive to manage our position better every day. With that, I'd like to open the floor for any questions you may have. Thank you.

Thank you. Our first question comes from Poe Fratt with Alliance Global Partners. Please go ahead with your question.

Hi, greetings.

Hi, Poe.

If we could focus on the macro aspects initially, can you give me an idea of how you're considering the U.S. elections and the potential for tighter sanctions on Russia, Iran, and possibly Venezuela?

Well, I have to be chosen as Secretary of State to be able to answer this, but just a poor Greek shipowner. As long as it affects us, in general, shipping flourishes when we have open borders and open seas without sanctions. However, we are in a situation where 25% of the world fleet, which is a substantial portion of the world tanker fleet, is what we call a grey fleet. This means that the remaining 75% that do not partake in any sanctioned business can benefit from first-class business opportunities without the competition from other vessels undercutting the market. Therefore, sanctions currently benefit first-class companies in our peer group because we don’t have competition from the grey fleet. I think sanctions presently serve as a positive force, especially as the average age of what is considered the grey fleet is close to 20 years. We would prefer not to have those older ships in the Mediterranean, the Caribbean, or the Far East undercutting quality responsible shipping operators. In essence, it has a positive outcome. Of course, we ensure our seafarers' safety, and our charters have never insisted otherwise. The quality of charterers we work with values safety—our captains will not take routes they feel unsafe or unsecure. I respect this, which is why we conduct business with top-tier clients. If we could magically put the world in peace one day, it would create even better conditions for shipping. We would be relieved of many older vessels that are not equipped to meet the standards set by major oil companies. Hence, we could see increased construction opportunities.

Great. When you look at it, Nikos, would potential tighter sanctions that restrict the flow of oil out of Iran push the darker grey fleet into retirement, or could some of those potentially clean up and re-enter the unsanctioned fleet?

I believe a significant portion of the grey fleet will not be able to re-enter the competitive market. The sectors of energy shipping, including LNG and tanker transportation, are subject to strict environmental regulations. Each vessel must pass inspections every six months, and if a vessel doesn't meet perfect standards, it won't be utilized. This indicates that many of those old vessels could potentially remain in a more passive status for a long time, possibly leading to an increase in scrapping for that tonnage.

Okay. Great. Additionally, can we discuss the newbuild program? I believe in your 6-K, you mentioned about $110 million allocated for CapEx in the second half of 2024. Could you provide insights on how much was spent in the third quarter and how much is anticipated for the newbuild program in the fourth quarter?

Harrys handles the spending; I focus on earnings. So, Harrys?

Poe, the total program costs approximately $950 million. For the remainder of the year, we have about $21.5 million left to pay, two-thirds of which will be bank debt and the rest around $8 million to $9 million as equity. We are still negotiating with various banks for commercial financing. From the 12 vessels, we have signed agreements for three and are very close to signing debt arrangements for the majority of the others. As such, the payments may be uneven. For the fourth quarter, as I mentioned, around $21.5 million is expected to be spent.

Okay. I was hoping to get a total installment figure for the third quarter, irrespective of how you finance them, too.

Sure, I will share those amounts with you offline, as every vessel has a different financial pattern.

Understood. Thank you so much.

Thank you, Poe.

Our next question comes from Climent Molins with Value Investor's Edge. Please proceed with your question.

Hi, good afternoon. Thank you for taking my questions. I wanted to start by asking about your two Suezmax newbuilds to be delivered throughout 2025. It seems you recently secured a contract for the second one. Could you talk a bit about the duration of the contracts for these two vessels?

Certainly. The contracts for these ships are three- and five-year contracts with one of our largest clients. I can't disclose all the details here, but the minimum rate for the next three to five years is nearly twice our breakeven point. This will significantly boost our net income and cash flow, benefiting us as major shareholders, especially regarding dividend distribution going forward.

That's helpful. Thank you. I also wanted to discuss dry-docking days during the quarter since that impacted utilization. Additionally, there were some commercial off-hire days. Could you elaborate on your dry-docking schedule for Q4 and 2025? Also, are commercial off-hire days expected this quarter?

We typically assume an average of around 30 to 35 dry-docking days. For the fourth quarter, we anticipate three to four vessels undergoing scheduled dry docking.

That's helpful. And for 2025, how many vessels are expected to dry dock?

For 2025, we estimate approximately 10 vessels to undergo special survey dry docking.

Makes sense. And lastly, regarding commercial off-hire for Q4, would you expect additional off-hire days beyond dry docking?

We believe utilization will be improved in Q4, so we do not foresee additional off-hire days due to our vessel operations. Our expectation is to maintain or exceed our current levels.

That makes sense. My last question pertains to the modeling side. General and administrative expenses have increased significantly both quarter-over-quarter and year-over-year. Can you discuss the reasons for this increase and whether we should view it as a one-off occurrence?

This increase in G&A is indeed a one-off, which occurred due to an incentive plan for our personnel. Therefore, it's not a cash increase. We should revert to normal lower levels in Q4.

Great! Thank you for your responses.

Thank you.

Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Tsakos for any final comments.

Thank you for listening in. I hope that our revamped presentation keeps you a little bit more engaged with the slides, and I believe they will be available for further examination of the company. We still see ourselves as an excellent investment opportunity. As management, we buy whenever permitted and have never sold. While the share price has moved from single digits to $30, many are now taking profits. However, we believe there's significant upside potential, and the company's valuation indicates we might predict an impending closure. Our $1.8 billion forward contracts and upcoming new ships suggest a promising future. Looking ahead, we expect to improve our share price significantly. The team will be in the United States in early December for a non-deal roadshow, and we would love to meet you, whether it be face-to-face or through a Zoom call. With that, I wish everyone a very happy Thanksgiving, and I hope our CFO's generous dividend announcement supports the holiday cheer without compromising Christmas. Thank you very much.

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