Earnings Call Transcript - TEN Q4 2025

Operator, Operator

Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the Fourth Quarter 2025 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, Founder and CEO; Mr. George Saroglou, President and Chief Operating Officer; and Mr. Harrys Kosmatos, Co-CFO of the company. I must advise that this conference is being recorded today. And now I'll pass the floor to Mr. Nicolas Bornozis, President of Investor Relations Adviser to Tsakos Energy Navigation Limited. Please go ahead, sir.

Nicolas Bornozis, President, Investor Relations Adviser

Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations Adviser to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the 12 months and fourth quarter ended December 31, 2025. In case you do not have a copy of today's earnings release, please call us at (212) 661-7566 or email at ten@capitallink.com, and we will have a copy for you emailed right away. Now 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. Now 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. Now at this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contains 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 at this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

Efstratios-Georgios Arapoglou, Chairman

Thank you, Nicolas. Good morning, good afternoon to everyone. Thanks for joining our call today. I have really nothing to add on the brilliant financial performance and the usual quality operating performance for TEN. Just four points from me worth noting. All of our 19 new buildings under construction, including the two recent VLCCs and the LNG, are already in the money. The second point is that we sold the 10-year-old VLCC generating $82 million of free cash to be added to the $300 million already existing cash cushion that we traditionally keep. The third point is that the locked-in contracted future revenue has now gone over the $4 billion mark, excluding profit shares. And lastly, which is very important, 22 of our vessels are taking full advantage of the high rates in the spot markets through profit share as we speak. So all the above, I believe, guarantee a continued strong performance going forward. And with this, I give the floor to Nikolas Tsakos.

Nikolas Tsakos, CEO

Thank you, Chairman. Good morning, good afternoon to everybody here from peaceful Athens, Greece. We just reported a very strong year, a year that has been a milestone period for TEN, a year in which we concluded significant strategic transactions for the future growth of the company and in very specific segments such as the shuttle tanker and the dual fleet segment. The last quarter of 2025 has been a very strong quarter, and that was before the geopolitical events that started early in January, with the changes and the opening up of Venezuela, one of the largest traditional exporters of sweet crude to the west that has been lagging behind due to political reasons. The opening of Venezuela to the mainstream fleet like ours, we were the first vessel under a several charter to transport the first, let's call it, legal export to the United States after the change of the political environment there. And soon after that, of course, we have the issues in the Red Sea and the Gulf of Aden that have made it even further strong spot rates to levels that at least our generation has never seen before. And I think these are the highest levels ever recorded in recent times. In this environment, TEN has been able to conclude very successfully 2025 and is taking advantage of the very strong rates that we are facing since the beginning of the year. In the meantime, we were able to disinvest some of our older tankers, putting aside in excess of $100 million to our cash reserves and reducing significantly our debt. And we were, I would say, lucky enough with a very good timely orders of our VLCCs at what today look to be at very, very significant discounts to today's market and also recently to our LNG orders. We maintain our moat of modernizing our fleet according to our clients' requests. We are looking to—we have already a significant dividend policy. Our last dividend was in the later part of February and we're looking forward as we're following day-to-day, and I think we have—we are following the developments, the geopolitical developments in the Middle East in order to, first of all, secure the safety of our seafarers, the crew and the cargoes on board and take advantage of this very strong market environment. So all in all, I would say, as far as the market is concerned, good news. Good news, perhaps not for the right reasons because none of us—I think nobody in the world is happy to have good news under war circumstances, but we have to run a tight and safe ship and this is what we have been doing. And with that, I will ask George, if you—Mr. Saroglou, our President, to give us a more detailed analysis of what happened in 2025 and we'll be happy to answer your questions later.

George Saroglou, President and COO

Thank you, Nikolas. We are pleased to report today on another profitable quarter and year. Before reflecting on the company's performance of last year, a few words for the current events unfolding in the Middle East and the Arabian Gulf. Shipping faces another geopolitical event in the Arabian Gulf and the Strait of Hormuz. The Strait of Hormuz sits on one of the world's busiest shipping routes, acting as a gateway to the oil and gas fields, refineries and terminals of the Arabian Gulf. One-fifth of the world's oil and liquefied natural gas passes through this narrow strait. It's a vital shipping lane for dry bulk commodities as well. Spot rates across all tanker vessel classes have spiked at levels far above the already strong rates in existence prior to the start of operation, Epic Fury. Substitute barrels from the U.S.A., Venezuela, Brazil, Guyana and West Africa are expected to benefit tanker rates and ton-mile demand. When the conflict started last Saturday, we had three vessels under time charter approaching the Arabian Gulf. We monitor 24/7 and follow the advice and updates of maritime security centers, flag, state, P&I and insurance underwriters. In coordination with our charterers, we assess the risk associated with any potential assets through this high-risk area. None of our vessels have entered for now this area, and they are kept outside the Strait of Hormuz. Charterers consider diverting some or all of them to other loading areas outside of the Arabian Gulf. Our foremost concern remains the safety and well-being of our seafarers on board these vessels and all those vessels that are in proximity and the structural integrity of our assets. Even without the latest geopolitical events, tanker markets have remained healthy during the course of last year. Energy majors continue to approach our company for time charter business. Since the start of the fourth quarter of 2025, we concluded 20 new time charter fixtures and extensions of existing time charters. Today, we have a backlog of approximately over $4 billion as minimum fleet contracted revenue. We have a 33-year history as a public company. We started with 4 vessels in 1993, and we have turned every crisis the world and shipping have faced through the years into a growth opportunity. If we move to Slide #4, we see that today, we have managed to have TEN as one of the largest energy transporters in the world with a very young, diversified, versatile pro forma fleet of 83 vessels. In Slide 4, we list the pro forma fleet of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market, and we have nine as we speak, two more from our last call and our new buildings under construction. With light blue, we have the vessels that are on time charter with profit sharing, 13 vessels, and with dark blue, the vessels that are on fixed-rate time charters, 42 vessels. In the next slide, we list the pro forma diversified fleet, which consists of our three LNG vessels, including the new order we announced today and our 16 vessel shuttle tanker fleet. We are one of the largest shuttle tanker operators in the world with a very young and technologically advanced fleet after the tender we won last year in Brazil to build nine shuttle tankers in South Korea. We have six shuttle tankers in full operations after taking delivery of both Athens 04 and Paris 24 last year, which commenced long time charters to an energy major. If we combine the two slides and account only for the current operating fleet of 64 vessels, 22 vessels or 34% of the operating fleet have market exposure to spot and time charters with profit sharing, while 55 vessels or 86% of the fleet are in secured revenue contracts, time charters and time charters with profit sharing. The next slide lists our clients with whom we do repeat business through the years, thanks to our industrial model. ExxonMobil is the largest revenue client. Equinor, Shell, Chevron, TotalEnergies, and BP follow. We believe that over the years, we have become the carrier of choice to energy majors, thanks to the fleet that we have built, the operational and safety record, the disciplined financial approach, the strong balance sheet, and good financial performance. The left side of Slide 7 presents the all-in breakeven costs for the various vessel types we operate in the company. Our operating model is simple. We try to have our time charter vessels generate revenue to cover the company's cash expenses that is paying for vessel operating and finance expenses for overheads, chartering costs, and commissions, and we let the revenue from the spot and profit-sharing trading vessels to make contributions to the profitability of the company. Thanks to the profit-sharing elements, for every $1,000 per day increase in spot rates, we have a positive $0.11 impact on the annual earnings per share based on the number of TEN vessels that currently have exposure to spot rates, 22 vessels. We have a solid balance sheet with strong cash reserves. The fair market value of the operating fleet exceeds today $4 billion against $1.9 billion debt and net debt to cap of around 47%. Fleet renewal and investing in eco-friendly greener vessels has been key to our operating model. Since January 1, 2023, we have further upgraded the quality of the fleet by divesting from our first-generation conventional tankers, replacing them with more energy-efficient new buildings and modern secondhand tankers, including dual fuel vessels. In summary, we sold 18 vessels with an average age of 17 years and a capacity of 1.7 million deadweight ton and replaced them with 34 contracted and modern acquired vessels with an average age of 0.5 years and a capacity of 4.7 million deadweight capacity. We continue to transition our fleet to greener and dual fuel vessels. We are currently one of the largest owners of dual fuel, LNG-powered Aframax tankers with six vessels in the water. Global oil demand continues to grow year after year. OPEC+ accelerated their voluntary production cuts, wars, economic sanctions, sanctions lifted tankers and geopolitical events positively affect the tanker market and freight rates while the tanker order book remains at healthy levels as a big part of the global tanker fleet is over 20 years and will need to be replaced gradually. And with that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance for the fourth quarter and last year.

Efstratios-Georgios Arapoglou, Chairman

Thank you, George. Harrys?

Harrys Kosmatos, Co-CFO

Thank you, George. So let's start with a review of the year 2025. So with 2025 starting with an avalanche of global tariffs and tit-for-tat actions by China on U.S. proposed port fees, measures that were subsequently revised or suspended, all in the backdrop of ever-growing geopolitical turmoil, the tanker markets remained elevated and oil majors increased their long-term cargo requirements. To this effect, TEN, through its tried and tested operating model of seeking long-term cover, provided the vessels required for its blue-chip clientele to meet its needs. This operational tweak, however, did not hinder the fleet from taking advantage of the equally strong but more erratic spot market as it had a good complement of vessels benefiting from trading spot. In particular, with the fleet in the water averaging 62 vessels identical to 2024, days under secure revenue employment, that is vessels on time charters and time charters with profit sharing provisions increased by 12.6%, while days on spot declined by 33%. Of interest, during 2025, days on profit sharing contracts alone increased by 12.4% from 2024, highlighting TEN's commitment to adding another layer of employment to benefit from the very lucrative spot market. Today, one-third of our fleet, that is 22 vessels, nine on pure spot and 13 on profit sharing contracts are directly impacted by the historical strong spot market. As a result of this employment shift, during 2025, TEN generated close to $800 million in gross revenues and $252 million in operating income, which incorporated $12.5 million of capital gains from the sale of four older vessels. Capital gains during the equivalent 2024 12 months were up $49 million from the sale of five vessels. In line with the above employment pattern and fewer vessels on dry dock compared to 2024, ten in '25 from 15 last year in '24, fleet utilization increased to 96.6% from 92.5% in 2024. The time charter equivalent rate the fleet attained during 2025 was a healthy $32,130, similar to 2024 levels. Reflecting the reduction of the fleet's spot exposure mentioned above, voyage expenses declined from $153 million in 2024 to $122 million in 2025, a saving of $30 million. A saving of $4.4 million was also incurred by a reduction in charter hire expenses while vessel operating expenses increased by just under $13 million from the year prior to settle at $211 million. The introduction of larger and more specialized vessels in the fleet like Suezmax and shuttle tankers in place of Handysize and Aframax vessels that were sold contributed to that increase. As a result, operating expenses per ship per day for 2025 average a competitive $9,990, about one-third of the time charter equivalent rate mentioned above. Depreciation and amortization came in at $170 million for 2025 from $160 million reflecting the introduction of four newbuilding vessels. General and administrative expenses in 2025 were at $42 million from $45 million in 2024, to a large extent, the result of the amortization of stock compensation awarded in July 2024 and scheduled to fully vest by July 2026. A decline was also experienced in our cost of interest as a result of lower interest rates, which despite a $174 million increase in the company's debt obligations from 2024 due to new loans for TEN's newbuilding program came in at $98 million compared to $112 million in 2024, another saving of $14 million. Interest income came in at $10.5 million which was another meaningful contribution. At the end of 2025 with just 62 vessels on average in the water and a 20-vessel newbuilding program, TEN's total debt obligations were at $1.9 billion with net debt to cap—while net debt-to-cap stood at a comfortable 46.7%. As a result of all the above, the company during 2025 generated a healthy net income of $161 million or $4.45 in earnings per share. Adjusted EBITDA for the year came in at $416 million, while cash at hand as at the end of December 2025 stood at $298 million. After having paid $148 million in scheduled principal payments, $190 million in yard pre-delivery installments and capitalized costs, and $27 million in preferred share coupons. And now let's go over the quarter 4 summary results. The fourth quarter of 2025 experienced similar fleet employment patterns, which had fleet utilization reaching 97.7% from 93.3% during the 2024 fourth quarter. During the 2025 fourth quarter, two vessels underwent scheduled dry dockings compared to four in the 2024 fourth quarter, which naturally contributed to this improvement. With an identical number of vessels in the water with the 2024 fourth quarter, albeit of greater deadweight, the fleet generated $222 million of gross revenues and $81 million in operating income which similarly to the 2024 fourth quarter did not have any gains or losses from vessel sales. The result in time charter equivalent per ship per day, reflecting the ever-increasing strength in rates, was at $36,300, 21% higher than the 2024 fourth quarter level. Voyage expenses during this year's fourth quarter were lower compared to last year's fourth quarter, experiencing a $7.6 million drop to settle at $26.8 million. Operating expenses, on the other hand, increased to $56 million from $51 million in the fourth quarter of '24 due to some extent by operating larger vessels. The result in operating expenses per ship per day for the fourth quarter of 2025 came in at $10,558. Again, one-third of the fleet average TCE and still competitive, thanks to the efficient and proactive management performed by TEN's technical managers. Depreciation and amortization were a little higher from the 2024 fourth quarter at $44.4 million. General and administrative expenses were at $6.2 million lower from last year's third quarter at $9.2 million. Interest costs came in at $25 million, similar to the 2024 fourth quarter while interest income contributed about $3 million to the bottom line. As a result of the above, TEN during the fourth quarter of 2025 reported $58 million of net income or $1.70 in earnings per share, a 200% increase from the 2024 fourth quarter. The adjusted EBITDA during the fourth quarter of 2025 settled at $128 million, $42 million higher than the 2024 fourth quarter number. And with that, I'll pass it back to Nikolas. Thank you.

Nikolas Tsakos, CEO

Thank you, Harrys, for having so many positive numbers. I will allow you to make long presentations as long as the numbers are positive because—as we said, the fourth quarter was only the beginning of the end, I would say, of a very fruitful year for 2025, a year that we have been able to establish a significant renewal of the fleet. We have been able to take and absorb the new acquisitions of the Viken fleet, which we did earlier fully in the company. And we were able to have an increase of our utilization to close to 98%, which I think this is really something that we want to congratulate also the operation department of Tsakos Shipping and Trading for keeping the ships—the propellers earning almost 100% of the day. And this figure includes dry dockings and special surveys. So it's really, I think, the highest utilization in the company's history. And at the beginning of '26, we had, I would say, surprises mainly on the geopolitical front. We have the change and the lifting of sanctions from Venezuela, which has allowed companies like ourselves to be able to participate even more in that—in those trades. And of course, recently, the events in the Persian Gulf which have created spot rates or have led to spot rates and prices of oil that we have not seen for a generation. The company is very well prepared to navigate such a tremulous environment. And as Mr. Saroglou showed us in our earlier slide, I think the company comes stronger out of every crisis. I think most of you listening are too young to remember most of the crisis that we have been—that we have gone through in the last—seven crises in the last 30-odd years, but the company has been able to build and build further. And I think this graph is very evident that Harrys, next time don't forget you have 12.5% growth that we usually have to show that the company has been growing year after year regardless of difficult markets. Another important factor we have increased the dividend. We paid the last part of our dividend in February and we're looking to reward shareholders accordingly as we move forward. A lot of question marks. We're actually focusing on the safety of our seafarers, as Mr. Saroglou said and also protecting our assets and the cargoes in our assets. We are going through situations that we have not seen in a generation. But we are well prepared to be able to take advantage of that. And with that, I would like to open the floor and also to thank the Chairman for his good words earlier to any questions. Thank you.

Operator, Operator

Our first question comes from Climent Molins with Value Investor's Edge.

Climent Molins, Analyst

I wanted to start by asking about the two LNG carrier orders you announced today. Could you talk a bit about whether you're already in discussions for long-term charter employment? And if so, what duration are you targeting?

Nikolas Tsakos, CEO

Yes. I mean, there is—as I said, the LNG segment is a segment that we have been participating in from a very early stage back in 2007. However, I think for good reasons, we have never overextended ourselves in investing in that segment. We always want to participate in new ships and new technologies, and that's what we have done. And with these ships, it's too early to charter long term, but there is a lot of appetite going forward. So I think this is more as a long-term investment for this growing segment of the business rather than something that we have done with a charter in mind.

Climent Molins, Analyst

All right. Makes sense. I also wanted to ask about the spot market arrangements. Could you talk about how the index-linked portion is calculated? Is it benefiting from the surge in spot rates we've seen in recent days?

Nikolas Tsakos, CEO

The arrangements on a profit sharing basis are calculated based on trading routes of the Far East, end of Transatlantic. So, of course, it's participating in this situation, and the current employment ends in about eight months. And of course, there is significant appetite for such a profitable ship going forward.

Climent Molins, Analyst

That's helpful. As I understand it, you very recently fixed two MR2 new builds that were delivered earlier this year. Are they employed at fixed rates or at variable hire? And if it's the former, at what rate are they employed?

Nikolas Tsakos, CEO

We cannot tell you all the secrets. You have to call Mr. Kosmatos. When you see him in New York, you can ask Mr. Kosmatos. He's only allowed to write this in a piece of paper and secretly hand it to you under the table. But they are—I would say, they are fixed rates, and they're very, very accretive in the mid- to high 20s. That's all I can say. And I think these are the highest that those ships have been fixed—these type of ships have been fixed in recent months or at least this is what our chartering department tells us.

Climent Molins, Analyst

Makes sense. Harrys, we definitely need to catch up soon.

Harrys Kosmatos, Co-CFO

Looking forward to it, gentlemen.

Climent Molins, Analyst

Yes. I also have a question on the shuttle tanker new builds. We've seen some of your peers getting very good financing terms and support from the Korean export agency. Is this something we should kind of expect on your shuttle tanker orders as well?

Nikolas Tsakos, CEO

Of course. Of course, I mean, we are one of the biggest supporters of South Korean yards and all the—we try to keep all—we are currently undergoing the Herculean task of our new building department. We have site offices in all the major South Korean yards. So we have a very big site office in Samsung as big in Hanwha, the ex-Daewoo, and of course, a big one in Hyundai, which we never stopped having versus perhaps if you recall, we just took delivery of our last vessel there in October. So we keep on maintaining very hands-on site offices in this—all of them. And of course, we get the appreciation from the Korean banking system. And I think our team has concluded one of the largest syndications for the financing of those vessels at very, very competitive terms.

Climent Molins, Analyst

That's good to hear. And final question from me. Big picture, 2026 has started very strongly for you and both earnings and free cash flow are set to rise very significantly. Could you talk a bit about how you think about your capital allocation priorities? How do you plan to balance deleveraging fleet renewal and increasing shareholder returns going forward?

Nikolas Tsakos, CEO

Well, I think, as we said, we make sure that we are securing the well-being of the company long term. And as we speak, I think as we see today, accounted, I think that by the end of the first and second quarter, we might be in excess of $0.5 billion in liquidity, which means that our priority is the reward of our shareholders, which we are the largest ones as the management. And then, of course, we would be allocating our new building program is almost fully financed, as I said, with the recent syndication. So rewarding our shareholders, reducing debt significantly. And we might be looking at next year, April next year to actually repurchase some of our very, very usual preferreds.

Operator, Operator

Our next question comes from the line of Poe Fratt with Alliance Global Partners.

Charles Fratt, Analyst

Yes. I was trying to isolate the impact of the profit-sharing agreements that you had in the spot market exposure on the increase in voyage revenue in the fourth quarter versus the third quarter. Can you quantify the impact of the increase in the TCE rate? What was the exposure to the spot market versus the contribution from profit sharing?

Harrys Kosmatos, Co-CFO

Well, we did see a lot of profit sharing coming in later—well, throughout '25, and we are beginning to see recently. And actually, a number of our vessels have been rechartered on higher elevated floor rates to what they were previously. Just to give you an idea, over and above the fixed rate that I mentioned earlier in the fourth quarter of '25, we got an additional $27 million from the profit-sharing income that came in. So obviously, we did have some benefit. It seems that the numbers will—I mean they look that we are moving in the right direction and perhaps to recall the similar amounts of additional income going forward. So again, $27 million over and above the flow rate on those profit sharing vessels in the fourth quarter.

Nikolas Tsakos, CEO

Yes. That's a significant amount. I mean, this is almost like 50% of the profitability of the fourth quarter. So it's not—a significant contribution from the profit sharing arrangements being $27 million on $58 million of profit.

Charles Fratt, Analyst

Yes, that's exactly what I was looking for. And so there were some—there was a positive increase on some of rechartering or recontracting the time charters that you had. And when you look at the first quarter, and looking maybe at the first half of the year, my sense is that rates started to move in the fourth quarter, but the really significant move is more in the February timeframe. And obviously, it's a little early just because of what's going on in the Middle East. But is there an additional step up that we should see in the first quarter in profit sharing?

Nikolas Tsakos, CEO

Yes. I mean, the way things are today, I think the profit sharing has gone off the charts because of—and as Harrys said, I mean, for example, we had the categories of ships that we would profit share for anything above $20,000 a day. And the next fixture was anything above $35,000 a day. So you understand that we made sure that we pushed the fixed part of the profit sharing as high as possible for as long as possible and then the profit sharing goes. So yes, I think the first quarter, it's going to be another step up from where we left the fourth quarter.

Harrys Kosmatos, Co-CFO

And I think of interest, Poe, is that from the 13 vessels that we currently have on profit sharing, seven are Suezmaxes and two are VLs.

Nikolas Tsakos, CEO

Yes. So they're actually the big boys of profit sharing.

Charles Fratt, Analyst

Yes. I was going to say and that's where you're seeing the meaningful increases. Maybe it will still filter down to the smaller sizes, but at this point in time, your exposure to the larger segments is—or larger sectors is really good. When you look at the decision to sell the asset, what—how did you—was this an inquiry from somebody as far as trying to—there's been a big acquirer out there, was there an inquiry that came in that led you to hit the bid? Or was this part of your strategic fleet renewal? And then if you could talk about what other potential assets are on the block that we could see sold in 2026, that would be helpful.

Nikolas Tsakos, CEO

Yes. I mean there's always—it takes two to tango. So it was not that we were out. I mean, our philosophy has always been that we're looking to sell any vessel which is between 10 and 15 years old. As you very well know, there have been people who have been buying these assets at prices that make huge sense. I think we were, I would call it, lucky enough in November to order three VLs of Hanwha at prices of today. And just to put it in perspective, the newbuilding, so we show—we ordered those ships. I think it has been reported at $128 million. And we sold the 10-year-old ship, which if you equate, it's a newbuilding price, it's in excess of $170 million. So it's always good to take advantage of these possibilities. And the good thing is that we are going to be using the ship up to almost the middle of the year since we're taking advantage right now in a huge way of the big market—of the spot market. And we're going to be selling here and delivering here back to the new owners sometime in June, end of May, June. So in a sense, we were able to have our profits for the first six months.

Charles Fratt, Analyst

Yes, that was a pretty timely rollover as far as just the issues went open in the, I guess, December timeframe. Just go back to, if you wouldn't mind, the chartering strategy, profit sharings kicked in, you see a step-up in the first quarter, probably the second quarter too. Where do you get more aggressive in trying to lock in the higher rates?

Nikolas Tsakos, CEO

We are always—I mean, we have set an evident step-up in all categories of the vessels. And as long as we are able to have the profit-sharing arrangement, which is something that very few others do, we should keep it that way. You've seen on Slide #7 on Page 7, you see our breakevens, which I think are very, very competitive. I mean, we have an all-in breakeven for VLs up to $28,000. Today, they're averaging above $100,000, including the profit sharing. So there's a little profit to make there. Suezmax is breakeven of everything at $25,000. I think we're closer to $80,000. Aframax is $21,000—well, Aframax and LR2s, if you put them together, about $22,500. Again, we're in the $70,000s and $80,000s there. Our Panamaxes, which are our oldest segment in the $18,000 and I think that's where we got the $30,000-plus profit share arrangements. So those are in the money. Our Handysize are down to $10,000, which means there are actually operating expenses and some interest since they're very, very well amortized. The LNGs—and our shuttle tankers are also very much into the money at $34,000 time charter. So when we can make sure that we get covering our minimum significantly, then we do the profit share. I think Page #7 portrays what Mr. George, our President has put up on the board.

Charles Fratt, Analyst

Yes, that's helpful. And if I may, one more question. Obviously, the turmoil in the Middle East just had an impact on rates. But the other side of the question is, right now, and I know you don't have any tankers in Hormuz way. But what are you expecting on the insurance expense side? And then also how much exposure do you have to higher fuel costs as we look at the rest of 2026?

Nikolas Tsakos, CEO

This is actually a very good point. I think we have had in the last week a 500% increase on insurance on war risk insurance. I think from what we used to do it at $0.15 per deadweight ton, we're up to close to $1 now or $0.75 to $1. So that's a huge increase. It's 500%. Of course, all this is paid directly by the charter. So it does not really influence—it's not—it's a pass-through cost for us. But it shows how the market rates this risk. As far as our fuel costs, I mean, we have—first of all, we have close to 25% of our existing requirements covered, George, for the next couple of years at very competitive rates. But also being mainly on a time charter basis, all the fuel cost surges or not affects our clients. So we do not have that. I mean we have a huge fleet, but being on time charter, the risk of the surge or drop of the bunker costs are taken up by the charters in a very big way.

Charles Fratt, Analyst

Great. And I'm sorry, if I may squeeze one last one in. What's your dry docking schedule for the rest of the year?

Harrys Kosmatos, Co-CFO

Okay. We are starting quite live for the first quarter. We only have two vessels, two Suezmaxes for Q1. We have five vessels in the second quarter, seven vessels in the third quarter, and three vessels in the fourth quarter.

Nikolas Tsakos, CEO

Hopefully, we will be able to see you in New York next week.

Operator, Operator

And we have reached the end of the question-and-answer session. Now I'd like to turn the floor back to CEO, Mr. Nikolas Tsakos for closing remarks.

Nikolas Tsakos, CEO

Well, thank you for participating and listening in to our 2025 end of the year results. It has been a productive year. Your support has been appreciated. We have seen significant, I think, close to 60% increase of share price in the last year, which shows the trust that the public markets are putting on TEN. And hopefully, this is only the beginning. We have seen, again, a very steady trading and a very positive trading of our preferreds. The company would maintain its distribution policy of keeping shareholders—of rewarding shareholders. We are going through a period of uncertainty in the world. And what we try to do with them is to take as much of this uncertainty possibly out through our chartering policy, which is always to the most blue-chip end users out there. And with that, we want again to thank you. Wish you a good weekend. And hopefully, we'll see you in New York next week. Thank you.

Operator, Operator

Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation. Have a great day.