Greek tanker company Tsakos Energy Navigation (TEN) stayed in the red for a fourth consecutive quarter but says a turnaround has begun.
Chief executive Nikolas Tsakos pointed to recent analysis, according to which a contango situation similar to the one that caused a spike in tanker earnings in early 2020 could be repeated in February 2022.
"If half of this [analysis] is true, we're in for a much better first quarter for sure," he told analysts in a conference call on Thursday.
Earlier in the day, the US-listed owner of nearly 70 tankers revealed a net loss of $24.2m for the third quarter, compared with a $1.5m profit in the same period of 2020.
For the nine months to the end of September, net loss came in at $49.5m from a profit of $56.8m a year earlier.
Cash flow remained positive amid what TEN described as the "worst tanker market in 30 years".
According to an earnings statement, the company should reach break-even, or even return to the black, as soon as the fourth quarter.
"In the recent [fourth] quarter, a number of our industry's sectors have significantly improved and we are enjoying unprecedented rates in LNG and product carriers, with other segments also showing signs of recovery," it said.
TEN shares gained 2.3% in early trading on 16 December to $7.59, giving it a market capitalisation of $158m.
In three weeks from now, earnings should start receiving a boost from the delivery of its third LNG carrier newbuilding.
The 174,000-cbm ship "will be significantly contributing to our bottom line in this very profitable segment [which is] earning six figure rates currently", the company said.
Meanwhile, TEN has been cutting costs to curb losses in the crude sector, where earnings remain sluggish.
"Stringent" controls helped cut operating costs by 9% year on year in the third quarter to $41.16m, their lowest level since the first quarter of 2017, according to available company data.
"When things are bad, you have to start playing defence," Tsakos told analysts.
Third-quarter results include a $5.8m cash loss from the sale of three vessels for a total of $53.2m, which released $21m of free cash after repayment of related debt.
The company is considering selling more ageing vessels as it takes delivery of dual-fuel, LNG-powered newbuildings that renew its fleet.
In line with established policy, TEN orders newbuildings against secured employment with oil majors.
It reiterated on Thursday that it recently clinched time chartering arrangements for 10 of its vessels, which it expects to generate $500m in revenue.
These agreements cover four of its aframax newbuildings, as well as the LNG carrier that will soon join its fleet.
"We believe that the signs of a further recovery in the energy transportation rates are evident, and TEN is well placed to reap the rewards," it said.
