Tsakos Energy Navigation, a US-listed owner of 74 vessels on the water or under construction, reported a drop in profit on Tuesday, weighed by depreciation costs caused by its fleet renewal and rising dividend payments.
Net income dropped at an annual pace of 15% in the third quarter to $26.5m.
The Nikolas Tsakos-led company attributed this to a 14% increase in depreciation and amortisation costs it incurred over the period to $41.3m, “due to the higher number and larger size of vessels in the fleet”.
Revenue, by contrast, continued climbing to $200.2m from $186.7m last year.
Lower oil prices during the summer “steered an upsurge in Chinese oil imports that facilitated stockpiling and acted as a catalyst for the recovery of tanker spot rates”, the company said in its earnings statement.
TEN, which prides itself on a “client-driven” model with a diversified fleet from VLCCs to smaller product carriers, said it squeezed more revenue from each of its tankers in the third quarter.
Time charter equivalent revenue stood at an average $32,539 per ship, up from $31,349 a year earlier.
Searching for ‘strategic opportunities’
TEN has been in the black in every reporting period since the beginning of 2022.
The $300.2m profit that it clocked up in 2023 was the highest ever in its 30 years as a listed company — first in Oslo and since 2002 in New York.
TEN, which pays semi-annual dividends, already announced in September an increased payout of $0.90 for the second half of 2024.
Its robust operating performance, however, is not reflected in the share price.
The stock closed at $19.87 in New York trading on Monday, down from a multi-year high of $31.48 in June.
This gives a market value of $586m. Including preferred shares, the company says its market capitalisation is about $1.2bn. Both readings are below the $2.95bn net value of its fleet at the end of September.
According to TEN’s latest annual report, various entities controlled by the Tsakos family own combined about one-third of its common stock.
Its fleet consists of 60 tankers and two LNG vessels on the water, as well as 12 tankers under construction due for delivery between 2025 and 2028.
The company said on Tuesday that it “continues to actively explore strategic opportunities, across all sectors in which it operates”.
The Greek owner has funded part of its newbuilding expansion drive by offloading older vessels. It has raised about $400m from 13 sales since early 2023 — 12 tankers and one LNG carrier.
TEN reiterated that it plans to continue shaking out older ships.
“In line with our commitment to always maintaining a modern fleet, TEN will also explore divestment opportunities for its earlier generation vessels and in that way monetise the full value of the assets the current market environment is providing for,” it said.
