Tsakos Energy Navigation (TEN), a US-listed owner of more than 60 tankers and a few LNG carriers, reported record earnings on Wednesday and announced a 50% increase in its dividend.
Net income at the Nikolas Tsakos-led company more than quadrupled between April and June from the previous quarter to $46.2m.
According to available figures, this is the highest profit reading in its 29 years as a public company.
“As global oil demand seems to be recovering from the Covid-19 pandemic, the severe and largely unexpected geopolitical events that unfolded in the first quarter of the year led to dislocations in global trading patterns that boosted all regional and international tanker trades and created a long-term energy shift,” the company said in its earnings release.
This shift in trading patterns since the outbreak of the Ukraine war and the sanctions imposed on Russia helped boost voyage revenue by nearly 60% year on year to $217m.
Adding the more modest profit realised in the first quarter, TEN’s net income between January and June reached $51.7m from a loss of $24.5 in the same period of 2021.
As a result, TEN announced a 50% increase in its dividend to $0.15 per share. It described this as “a new distribution”, without elaborating on whether the payout will continue at the same elevated level going forward.
The company’s optimistic outlook, however, suggests that it might just do that.
“Geopolitical events and the international sanctions have increased rates beyond our forecast and are expected to be maintained for the foreseeable future,” it said on Wednesday.
TEN, which said it will take delivery in November of a 2020-built VLCC it purchased in June, will continue identifying “opportunities for growing its presence in the specialised areas it operates [in], namely shuttle tankers, LNG and dual-fuel vessels, in order to further enhance shareholder value”.
At the same time, however, it said it would continue cutting its bank debt and “preserve cash reserves in line with management’s prudent growth aspirations”, to build a fleet of environmentally high-efficiency ships in the future.
The company separately confirmed the sale of one of its oldest ships, which was reported by TradeWinds last month.
The 68,400-dwt Inca (built 2003), in which TEN owned 51%, with the balance held by the company’s charterer, Flopec Petrolera Ecuatoriana, was reported sold for between $12.5m and $13m at the time.
TEN did not reveal the Inca’s price, other than to say that the sale generated $8.5m of free cash.
