Tsakos Energy Navigation Ltd 6-K, filed Aug 4, 2023
Tsakos Energy Navigation Ltd (TEN)
About this 6-K
Tsakos Energy Navigation Ltd filed this 6-K on August 4, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2023
Commission File Number 001-31236
TSAKOS ENERGY NAVIGATION LIMITED
(Translation of registrant’s name into English)
367 Syngrou Avenue, 175 64 P. Faliro, Athens, Greece
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
TSAKOS ENERGY NAVIGATION LIMITED
FORM 6-K
Officer Appointment
On June 16, 2023, George Saroglou, Chief Operating Officer of Tsakos Energy Navigation Limited (the “Company”), was also appointed President of the Company. Mr. Saroglou will continue to serve as Chief Operating Officer of the Company. Nikolas P. Tsakos, who had been serving as President of the Company, will continue to serve as Chief Executive Officer of the Company.
****
This report on Form 6-K is hereby incorporated by reference into the following Registration Statements of the Company:
| • | Registration Statement (Form F-3 No. 333-240253) filed with the SEC on July 31, 2020; |
| • | Registration Statement on Form F-3 (No. 333-234279) filed with the SEC on October 21, 2019; |
| • | Registration Statement on Form F-3 (No. 333-206852) filed with the SEC on September 9, 2015; and |
| • | Registration Statement on Form S-8 (No. 333-183007) initially filed with the SEC on August 2, 2012, as amended. |
EXHIBIT INDEX
| 99.1 | Tsakos Energy Navigation Limited financial results for the three months ended March 31, 2023 and 2022 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 4, 2023
| TSAKOS ENERGY NAVIGATION LIMITED | ||
| By: | /s/ George Saroglou | |
| George Saroglou | ||
| President and Chief Operating Officer | ||
EXHIBIT 99.1
May 30, 2023
First Quarter 2023 Summary Results
In the first quarter of 2023, the positive industry fundamentals together with the trade imbalances the war in the Ukraine created, continued to support a healthy tanker market and allowed Tsakos Energy Navigation Limited (the “Company” or “TEN”) - despite operating fewer vessels—to generate gross revenues of $261 million, representing an increase of 74% or $112 million from the same quarter in 2022.
Operating income in the 2023 first quarter climbed to $199 million, which includes an $81 million capital gain from the sale of six first generation MRs and two handysize product tankers at values reflecting the strong demand for secondhand tonnage.
The resulting net income, including the $81 million capital gain, totaled $177 million in the first quarter of 2023.
Fleet utilization in the first quarter of 2023 amounted to 96.4% reflecting efficient technical management and the low number of scheduled dry dockings during the period.
Boosted by TEN’s flexible charters with upside potential, the fleet’s average Time Charter Equivalent (TCE) more than doubled to $41,882 per day from the 2022 first quarter levels.
Earnings Before Interest Tax Depreciation & Amortization (EBITDA) exceeded $236 million in the first quarter of 2023.
As a consequence, the positive cash flow generated from the profitable contracts the vessels are employed under resulted in the increase of the Company’s cash reserves to $476 million as of March 31, 2023.
Bank debt at the end of first quarter of 2023 was $21 million lower from the year-end 2022 level at $1.39 billion.
Interest and finance costs in the first quarter of 2023 reached $24 million, primarily due to higher underlying interest rates and a new loan for the acquisition of a VLCC in November 2022.
Daily operating expenses per vessel during the 2023 first quarter were at $9,213 impacted by the seasonal inventory buildup for the fleet and the inflationary pressures evident in the world economy.
Depreciation and amortization marginally increased by $1.8 million partly due to two vessels undergoing dry-docking during the 2023 first quarter.
COMMON SHARES DIVIDEND; SERIES D PREFERRED SHARES REDEMPTION
The Company’s Board of Directors has approved the full and at par redemption of TEN’s 3,517,061 Series D Cumulative Redeemable Perpetual Preferred Shares currently outstanding with a par value of $25.00 per share or $87,926,525 in total. The redemption, along with accrued dividends, is scheduled for July 7, 2023. Through this redemption, the Company will generate annual preferred dividend savings of $7.7 million.
In line with TEN’s semi-annual dividend distribution policy and as previously announced, the Company will distribute in 2023 an annual dividend of $0.60 per common share, $0.30 of which will be paid on June 15, 2023, to shareholders of record as of June 9, 2023, and $0.30 to be paid in December 2023.
Our newbuildings under construction, as of May 30, 2023, consisted of the following:
| # | Name | Type |
Delivery |
Status |
Employment | |||||
| 1 | H5081 | Aframax Dual Fuel |
Q1 2024* |
Under Construction |
Yes | |||||
| 2 | H5082 | Aframax Dual Fuel |
Q1 2024* |
Under Construction |
Yes | |||||
| 3 | H5083 | Aframax Dual Fuel |
Q3 2023* |
Under Construction |
Yes | |||||
| 4 | H5084 | Aframax Dual Fuel |
Q4 2023* |
Under Construction |
Yes | |||||
| 5 | H3431 | Suezmax – Scrubber Fitted |
Q2 2025* |
Under Construction |
Under Discussion | |||||
| 6 | H3432 | Suezmax – Scrubber Fitted |
Q4 2025* |
Under Construction |
Under Discussion | |||||
| 7 | H2654 | Suezmax Shuttle Tanker |
Q2 2025* |
Under Construction |
Yes | |||||
| 8 | H2655 | Suezmax Shuttle Tanker |
Q2 2025* |
Under Construction |
Yes |
| * | Expected delivery as per shipbuilding contracts (could be subject to change) |
TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES
Selected Consolidated Financial and Other Data
(In Thousands of U.S. Dollars, except share, per share and fleet data)
| Three months ended March 31 (unaudited) |
||||||||
| STATEMENT OF OPERATIONS DATA | 2023 | 2022 | ||||||
| Voyage revenues |
$ | 261,212 | $ | 149,704 | ||||
|
|
|
|
|
|||||
| Voyage expenses |
45,898 | 48,202 | ||||||
| Charter hire expense |
6,792 | 8,615 | ||||||
| Vessel operating expenses |
48,275 | 43,174 | ||||||
| Depreciation and amortization |
35,139 | 33,349 | ||||||
| General and administrative expenses |
7,157 | 6,795 | ||||||
| Gains on sale of vessels |
(81,198 | ) | — | |||||
|
|
|
|
|
|||||
| Total expenses |
62,063 | 140,135 | ||||||
|
|
|
|
|
|||||
| Operating income |
199,149 | 9,569 | ||||||
|
|
|
|
|
|||||
| Interest and finance costs, net |
(24,515 | ) | (3,299 | ) | ||||
| Interest income |
2,763 | 190 | ||||||
| Other, net |
61 | (167 | ) | |||||
|
|
|
|
|
|||||
| Total other expenses, net |
(21,691 | ) | (3,276 | ) | ||||
|
|
|
|
|
|||||
| Net income |
177,458 | 6,293 | ||||||
| Less: Net income attributable to the noncontrolling interest |
(908 | ) | (773 | ) | ||||
|
|
|
|
|
|||||
| Net income attributable to Tsakos Energy Navigation Limited |
$ | 176,550 | $ | 5,520 | ||||
|
|
|
|
|
|||||
| Effect of preferred dividends |
(8,673 | ) | (8,673 | ) | ||||
| Net income (loss) attributable to common stockholders of Tsakos Energy Navigation Limited |
$ | 167,877 | $ | (3,153 | ) | |||
|
|
|
|
|
|||||
| Earnings (Loss) per share, basic and diluted |
$ | 5.69 | $ | (0.12 | ) | |||
|
|
|
|
|
|||||
| Weighted average number of common shares, basic and diluted |
29,505,603 | 25,571,750 | ||||||
|
|
|
|
|
|||||
| BALANCE SHEET DATA | March 31 2023 |
December 31 2022 |
||||||
| Cash |
475,682 | 309,439 | ||||||
| Other assets |
278,869 | 371,911 | ||||||
| Vessels, net |
2,570,908 | 2,580,575 | ||||||
| Advances for vessels under construction |
98,165 | 46,650 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 3,423,624 | $ | 3,308,575 | ||||
|
|
|
|
|
|||||
| Debt and other financial liabilities, net of deferred finance costs |
1,555,121 | 1,577,877 | ||||||
| Other liabilities |
197,693 | 207,779 | ||||||
| Stockholders’ equity |
1,670,810 | 1,522,919 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 3,423,624 | $ | 3,308,575 | ||||
|
|
|
|
|
|||||
| Three months ended March 31 |
||||||||
| OTHER FINANCIAL DATA | 2023 | 2022 | ||||||
| Net cash provided by operating activities |
$ | 115,006 | $ | 24,284 | ||||
| Net cash provided by (used in) investing activities |
$ | 86,323 | $ | (158,197 | ) | |||
| Net cash (used in) provided by financing activities |
$ | (35,086 | ) | $ | 149,682 | |||
| TCE per ship per day |
$ | 41,882 | $ | 19,730 | ||||
| Operating expenses per ship per day |
$ | 9,213 | $ | 7,745 | ||||
| Vessel overhead costs per ship per day |
$ | 1,279 | $ | 1,146 | ||||
|
|
|
|
|
|||||
| 10,492 | 8,891 | |||||||
| FLEET DATA |
||||||||
| Average number of vessels during period |
62.2 | 65.9 | ||||||
| Number of vessels at end of period |
58.0 | 66.0 | ||||||
| Average age of fleet at end of period |
Years | 10.2 | 10.3 | |||||
| Dwt at end of period (in thousands) |
7,178 | 7,302 | ||||||
| Time charter employment - fixed rate |
Days | 2,277 | 2,026 | |||||
| Time charter and pool employment - variable rate |
Days | 1,801 | 1,798 | |||||
| Period employment coa at market rates |
Days | 61 | 90 | |||||
| Spot voyage employment at market rates |
Days | 1,252 | 1,617 | |||||
|
|
|
|
|
|||||
| Total operating days |
5,391 | 5,531 | ||||||
| Total available days |
5,594 | 5,929 | ||||||
| Utilization |
96.4 | % | 93.3 | % | ||||
| Non-GAAP Measures Reconciliation of Net income to Adjusted EBITDA |
||||||||
| Three months ended March 31 |
||||||||
| 2023 | 2022 | |||||||
| Net income attributable to Tsakos Energy Navigation Limited |
$ | 176,550 | $ | 5,520 | ||||
| Depreciation and amortization |
35,139 | 33,349 | ||||||
| Interest Expense |
24,515 | 3,299 | ||||||
| EBITDA |
236,204 | 42,168 | ||||||
| Gains on sale of vessels |
(81,198 | ) | — | |||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
$ | 155,006 | $ | 42,168 | ||||
|
|
|
|
|
|||||
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP measures used within the financial community may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods as well as comparisons between the performance of Shipping Companies. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. We are using the following Non-GAAP measures:
| (i) | TCE which represents voyage revenue less voyage expenses is divided by the number of operating days less 164 days lost for the first quarter of 2023 as a result of calculating revenue on a loading to discharge basis, compared to 204 days lost for the first quarter of 2022. |
| (ii) | Vessel overhead costs are General & Administrative expenses, which also include Management fees, Stock compensation expense and Management incentive award. |
| (iii) | Operating expenses per ship per day which exclude Management fees, General & Administrative expenses, Stock compensation expense and Management incentive award. |
| (iv) | EBITDA and Adjusted EBITDA. See above for reconciliation to net income. |
Non-GAAP financial measures should be viewed in addition to and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
The Company does not incur corporation tax.