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NEW YORK, Jan. 24, 2023 (GLOBE NEWSWIRE) — Capital Hyperlink hosted a presentation by the senior administration of TEN Ltd. (NYSE: TNP) on Thursday, January 12, 2023. Throughout the 45-minute session, Dr. Nikolas P. Tsakos, Founder, President & CEO, Paul Durham, CFO, George Saroglou, Chief Working Officer and Harrys Kosmatos, Company Improvement Officer, described the sturdy tanker market, the present state of the corporate’s fleet, and its dividend coverage as a part of Capital Hyperlink’s Firm Presentation Collection.
A replay of the total session of the presentation and the intensive Q&A may be accessed at: https://www.youtube.com/watch?v=yZKsCkb4Y6M
Highlights from TEN Ltd. session on the Capital Hyperlink Presentation Collection embody the next:
TEN Ltd. is likely one of the largest and most well-established unbiased vitality transporters on the earth. With a various fleet of 73 fashionable vessels, together with each crude oil and oil-product in addition to LNG transportation. This consists of 7 newbuilds. TEN Ltd maintains a buyer base consisting of main world vitality corporations.
TEN’s FleetDr. Nikolas P. Tsakos, CEO, burdened that TEN is targeted on capitalizing not solely on durations when the market is robust, but additionally when it lags. He acknowledged that the corporate’s present technique consists of chartering its vessels within the spot market, for brief time period durations, when the market could be very sturdy.
The corporate has “taken benefit of the troublesome occasions” to order its first 4 inexperienced, dual-fuel ships, Dr. Tsakos mentioned, with the order backed by very long time charters from one of many firm’s major purchasers.
When it comes to chartering, 40 of TEN’s 66 vessels on the water, or 61%, have market publicity, or a mix of spot and time constitution, together with revenue sharing.
A complete of 44 of 66 vessels on the water, or 67%, are in safe income contracts, or fastened time charters and time charters with revenue sharing. “Which means TEN is capturing the constructive tanker market fundamentals that prevail right now, George Saroglou, COO, acknowledged.
“We’ve a easy working mannequin—we attempt to have our time constitution vessels generate income to cowl the corporate’s money wants, the vessel working bills, finance bills, overheads, chartering prices and commissions,” defined George Saroglou.
“We let the income from spot score vessels opportunistically contribute to the profitability of the corporate,” he continued.
George Saroglou burdened the corporate’s dedication to preserving working prices low and utilization charges excessive. Presently, TEN’s fleet utilization sits at almost 94%. This determine is sort of excessive, contemplating that a lot of dry dockings for ship surveys which have taken place.
The corporate can also be anticipating a complete of six newbuilds to be delivered from 3Q23 till 2Q25. Of those new vessels, 4 might be dual-fuel LNG, and “symbolize the corporate’s entrance into inexperienced transport,” Saroglou mentioned.
TEN has historically been lively within the S&P market specializing in fleet renewal. “We’re seeking to promote 7 or 8 of our older technology ships,” Dr. Tsakos acknowledged. “That will give us a really huge capital acquire and increase for the 12 months 2023.”
Posed to Scale back Debt at “Accelerated Tempo”“Based mostly on the constructive quarterly outcomes by the previous 12 months, it’s clear that the annual numbers might be sturdy,” Paul Durham, CFO acknowledged of 2022.
Within the nine-month interval of 2022, the corporate’s web earnings amounted to over $100 million. This development has resulted in more healthy money reserves for the corporate, which have grown by over $200 million in comparison with the earlier 12 months. This might assist the corporate to scale back excellent debt “at an accelerated tempo,” Durham acknowledged. “Already, previously six years, excellent debt has fallen by about $500 million…and it continues to shrink” he famous. “We nonetheless count on our income to develop into 2023 because the market continues to stay agency,” he mentioned.
When requested in regards to the firm’s dividend coverage, Tsakos highlighted that TEN has “by no means stopped paying a dividend, even in very, very troublesome occasions when the corporate may “legitimately” put a cease on such funds as a few of its friends did. When occasions are good, our coverage has at all times been to distribute between 25 and 50% of our web earnings, relying on capital wants on the time, and I feel we is not going to change that coverage,” he continued. The corporate shouldn’t be this stage, to purchase again shares. As an alternative, Dr. Tsakos mentioned, a choice can be for dividend will increase.
Market Situations Bullish Attributable to Favorable Provide, Demand SituationsThe present market is “very favorable” for tanker homeowners on each the availability and demand facet, Harrys Kosmatos, Company Improvement Officer, mentioned expressing his confidence, significantly when it comes to demand. “International oil demand has recovered” within the wake of the pandemic, and has even exceeded pre-pandemic ranges, Harrys Kosmatos identified. China’s reopening will seemingly propel this demand even additional, he famous, because the nation may turn into, as soon as once more, a “main oil importer”.
Kosmatos argued that Russia’s invasion of the Ukraine has created “a brand new and presumably lasting development” in oil markets, specifically the creation of latest buying and selling patterns and the elongation of transport routes because of Europe’s ban on Russian oil imports. Attributable to these rules, Europe now has to import oil from additional distances, significantly the US, West Africa, and the Arabian Gulf. “The short-term voyages from Russia have been changed by longer haul trades and the rising ‘new’ Russian trades, significantly to India and China because it reopens, are carried out by older vessels, acquired by “non-western” entities, that up till lately competed within the worldwide industrial enviornment with all people else,” Kosmatos famous. This sample, which successfully removes provide from the “western” markets, is a development that TEN expects “may final for the foreseeable future,” he continued.
Moreover, the sector is dealing with one of many lowest orderbooks in current reminiscence, beneath 4%, whereas almost 10% of the present world fleet is over 20 years previous, and 24% over 15 years previous. “In consequence, we may very well be confronted with a scenario the place some segments within the tanker market may expertise adverse development. Unfavourable development in opposition to an growing world oil demand…ought to translate to a sustainable sturdy market setting.” Kosmatos asserted.
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