Tsakos Energy Navigation (TEN) Q2 2026 Earnings Call - Record Profits Drive Dividend Hopes Amid Geopolitical Disruption

Conference Moderator: Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation conference call on the second quarter 2026 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board, Mr. Nikolas Tsakos, Founder and CEO, Mr. George V. Saroglou, President and Chief Operating Officer, and Mr. Harrys Kosmatos, CFO of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today. Now I pass the floor to Mr. Nicolas Bornozis, President of Capital Link and Investor Relations Advisor to Tsakos Energy Navigation Ltd. Please go ahead, sir.

Nicolas Bornozis, President of Capital Link and Investor Relations Advisor, Capital Link: Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the six months and second quarter ended June 30, 2026. In case you do not have a copy of today’s earnings release, please call us at 212-661-7566 or email us at [email protected] and we will have a copy for you emailed right away. Please note that parallel to today’s conference call, there is also a live audio and slide webcast, which can be accessed on the company’s website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the company’s website.

Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user-controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties which may affect TEN’s business prospects and results of operations. At this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation.

Before doing that, I would like to congratulate the company for the record revenue performance, and it seems that you are on course to break the $1 billion revenue target for the year. So Mr. Arapoglou, the floor is yours.

Takis Arapoglou, Chairman of the Board, Tsakos Energy Navigation Ltd.: Thank you, Nicolas. Good morning and good afternoon to all. Thank you for joining our call today, presenting second quarter first half results of TEN. Once again, congratulations to Nikolas Tsakos and the team for the stellar results as briefly described by Mr. Bornozis. Our model, TEN’s model, has proven that it works even in weak markets, no surprise that it works so well also in this market where current market conditions are very favorable. It is a great opportunity for TEN to continue generating cash from operations, to continue from selling all the vessels to renew the fleet and generate more cash to fund a record order book, as you have seen in the press release, keep cash for contingencies. Perhaps if the board decides, repay, redeem, the Series E Preferred Shares. Nobody knows. It is a next year issue. More importantly, rewarding our investors.

I want to emphasize this because during the calendar year 2026, we paid dividends of $0.60 and $1 for a total of $1.60 per share. It is obvious that this can only go higher, if approved by the board and if current conditions are maintained. This is a solid yield of very close to 4%, and it is a generous payout, compared to other companies in the sector. We want to underline that we want to reward our shareholders for staying with us, who have actually benefited also from a nearly doubling of the stock price in the last two years. Finally, TEN is making use of the strong market and of the high time charter rates to lock in high returns for its fleet. Up to now, the total of forward committed earnings is approaching $3.5 billion.

This is a great cushion and great base to look forward to continued success in the next two to three years. Once again, congratulations to Nikolas Tsakos and the team for the stellar results. Sincere wishes for continued success. Thank you very much. Nikos Tsakos, the floor is yours. I pass on the floor to you. Thank you.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Chairman, thank you very much for your kind words, and hopefully we will continue this trend. Before that, of course, from all of us here in TEN and the family, we all remember 9/11. We all have been living in the U.S. and New York for the last 45 years. Many of us around this table were there 25 years ago. Our original office in New York is just on Rector Street, two blocks south of Ground Zero. Just to remind you that we were the first company to go public after 9/11. We went public in March 2002, and we were actually on a road show after Labor Day originally in 2001 before these terrible events. It is, I would say, very much into our mind and in our hearts, and we do not forget 9/11.

Well, on a happier note, I have to say that this is a record-breaking period for our results in many segments. But looking back at it seems that even after the first 6 months, which have been very profitable, the second part is even stronger. The appetite of the major oil companies and all the charter is unprecedented. I have never seen that in my 30-plus years in business. A year ago, I would be happy when we said we had business for 1, 2, or 3 years for our existing ships. Right now, charterers are there to take anything which is 10 years or younger for up to 7 years and their appetite. So we are actually balancing this luxury problem to have together with our commercial department.

We are making sure that TEN is taking advantage of the highs and at the same time secures long-term employment for a rainy day as they say. It is actually also very rewarding to see that we had our largest new building program of 26 vessels started 2 years ago. We have already taken delivery of 7 of those ships, and the valuation of those ships has already increased by at least 30%. So I think our $3 billion new building program value today close to $3.8 billion, $3.9 billion and growing on a monthly basis. So we are very well in the money. We took the decision to rebuild a big part of our fleet at the time where new building values were, I would say, more logical. So looking forward, we are looking for a good year.

As the Chairman said, we are looking to increase the dividend for our shareholders, and we always make this announcement after our strategy meeting in November. So looking forward for an increase of that and hopefully the market will maintain its strength right now. And for more details, I will ask Mr. Saroglou, our President, to give us what has happened in the first 6 months and subsequent events.

George V. Saroglou, President and Chief Operating Officer, Tsakos Energy Navigation Ltd.: Thank you, Nikos. We are very pleased today to report another profitable quarter. Excluding capital gains, this is a record-breaking quarter and first half for net income. We maintain a steady course in the most turbulent geopolitical environment in recent memory. The year started with the political developments in Venezuela and escalated with the war in the Middle East and the closure of the Strait of Hormuz. The Strait of Hormuz experienced its most severe disruption in modern history, effectively halting normal global oceangoing commerce. The world was hoping for a resolution following the signing of a ceasefire agreement, which quickly unraveled halfway through the 60-day period it was supposed to last. There is a U.S. naval blockade that tries to manage the safe passage of tankers in and out of this narrow, high-risk area.

We have attacks on oceangoing vessels that attempt to cross the straits on their own or with the protection of the U.S. Navy. Vessels have been attacked, and seafarers serving on board have been injured and killed while trying to do their job and keep the world and global commerce going. Our company continues to avoid the Strait of Hormuz. Our thoughts and prayers are with all the seafarers that are stranded inside the area and have to endure every day the unnecessary stress and psychological mental fatigue for which they are not responsible. Tanker market fundamentals were strong even before geopolitics took center stage at the end of February. 2026 was forecasted to be another year with growth in global oil demand, while tonnage supply remained very balanced.

The effect of the war in the Middle East and the ongoing closure in the Straits of Hormuz resulted in elevated crude and product prices that affected global oil demand. Despite higher prices, these geopolitical events have significantly added to the market strength. The tanker freight market has gone from strength to strength and TEN’s diversified fleet with each new charter renewal and the fleet’s market exposure to spot and profit-sharing rates will continue to further benefit from this unprecedented market dislocation. This is basically what we have done in the 33-year history we have as a public company. This is what basically we say in slide number 1 on page 4, that we managed since 1993 to turn every crisis the world has faced into a growth opportunity.

Today, we have an 81-vessel fleet and we are one of the largest energy transporters in the world with a very young, diversified, and versatile pro forma fleet of 81 vessels. In slide 4, we list this pro forma fleet of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market, and we have currently 10 tankers trading spot and our new buildings under construction. With light blue, we have the vessels that are on time charter with profit-sharing. We have 13 vessels. With dark blue, the vessels that are on fixed-rate time charters. We have 39 vessels. In the next slide, we list the pro forma diversified fleet, which consists of our four LNG vessels, 2 in the water, plus 2 new buildings, and our 16-vessel shuttle tanker fleet.

We are one of the largest shuttle tanker operators in the world with a fleet with young and technologically advanced vessels.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Do your next 26.

George V. Saroglou, President and Chief Operating Officer, Tsakos Energy Navigation Ltd.: On July 28th, we took delivery of the DP shuttle tanker, Anfield, from Samsung Heavy Industries in South Korea, the third in a series of 12 DP2 shuttle tankers under construction at that yard. The vessel commenced a 10-year employment to a U.S. oil major with charter options to extend until the vessel’s 20th-year anniversary. Assuming charterers employ the vessel to the maximum duration, the expected gross revenue should approach $500 million. Following the Anfield delivery, we have seven shuttle tankers in full operation. If we combine the two slides and account only for the current operating fleet of 62 vessels, we have 23 vessels or 37% of the operating fleet with market exposure, spot and time charter with profit-sharing. While 52 vessels or 84% of the fleet is in secured revenue, which is time charters and time charters with profit-sharing.

In the next slide, we list our clients with whom we do repeat business through the years, thanks to our industrial model. ExxonMobil is the largest revenue client. Equinor, Shell, Chevron, TotalEnergies, and BP follow. The left side of the next slide presents the all-in break-even cost for the various vessel types we operate in TEN. Our operating model is very simple. We try to have our time charter vessels generate revenue to cover the company’s cash expenses, paying for the vessel operating and finance expenses for overheads, chartering costs, and commissions, and let revenue from the spot and profit-sharing trading vessels to contribute to the profitability of the company.

Thanks to the profit-sharing element, for every $1,000 per day increase in spot rate, we have $0.11 positive impact on the annual earnings per share based on the number of vessels that currently the company has exposure to spot rates, which is 23 vessels. We have a solid balance sheet with strong cash reserves. The fair market value of the pro forma of the fleet is approximately $4.9 billion against $2 billion debt, and net debt-to-capital is around 44.5%. Fleet renewal and investing in eco-friendly vessels has been key to our operating model. Since January 1st of 2023, we have further upgraded the quality of the fleet by divesting from our third-generation conventional tankers, replacing them with more energy-efficient new buildings and modern secondhand tankers, including, of course, dual-fuel vessels.

In summary, we sold 20 vessels with an average age of 17.3 years and capacity of 2 million deadweight ton and replaced them with 35 contracted and modern acquired vessels with an average age of 0.5 years and 4.8 million deadweight ton. We announced today the sale of two 2006-built Suezmax tankers to independent third parties for net proceeds of $100 million. Prior to the sale, as previously reported, the vessels were part of a sale and leaseback structure. TEN repurchased them for cash upon maturity of their lease at a significant discount to fair market value. As we continue to transition our fleet to greener and dual-fuel vessel, we must note of our well-timed new building program and how well is in the money today. Our old 26 new building vessels that were contracted in 2003 are today at much lower levels than current new building prices.

In a new building program of approximately $3.1 billion cost, we have today at least a 30% appreciation in value, even before some of these vessels are delivered to the company. Tanker market fundamentals have remained strong with a global order book still at a level equal to about 40% of the number of vessels that are 50 years of age or older, and CPRs operate at full capacity. While at the same time, geopolitical conflicts continue to increase ton-mile dislocation, and that provides further support to an already robust tanker market. With that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance of the first half. Harry?

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: Thank you, George. Let me start with a brief summary of our six-month results. A favorable tanker market fundamentals continues geopolitical tensions, along with the ever-present trading inefficiencies that have been created, continue to propel the market to levels that, on the one hand, incentivize owners with a long-term outlook to fix for longer periods as demand for term tonnage remains unabated. While on the other, encourage the divestment of vessels of all ages for lofty profits. TEN, since the beginning of the year, has been active on both fronts and has reaped the benefits of such an extraordinary confluence of circumstances. The results of the first half and second quarter of 2026 are a vivid reflection of that.

Benefiting from a modern, versatile, and efficiently operated fleet, catering in its majority to the long-term needs of our clients, fleet utilization in the first six months of 2026 was almost identical to the 2025 first half level, at 96.5%, despite having six ships undergoing scheduled dry docks from five in last year’s first half. As a result of the fleet operating at almost full capacity with an employment policy inclined towards long-term charters with upside optionality through vessels operating under spot and profit-sharing contracts, gross revenues during the first half of 2026 increased to well over half a billion dollars, $551 million to be exact, or $161 million above the 2025 first half level. This was accomplished with an average fleet of 63.5 vessels, just a vessel and a half above the 2025 first half fleet. Quite an achievement.

Of interest, profit-sharing arrangements contributed $71 million of revenue during the first half of 2026, compared to $10 million in the 2025 same period. This substantial increase occurred despite a 22% decline in actual operating days under market-related contracts, while available days on fixed-rate time charters rose by 23% over the corresponding periods. The time charter equivalent rate per ship per day impacting the above results, and by extension reflecting the continuous robustness of the tanker markets and operational efficiency of the fleet, reached $43,503 per day from $30,754 per day in the 2025 first half, a 41% increase. Fleet voyage expenses in the first half of 2026 climbed to about $82 million from $68 million in last year’s first half. The result, to a large extent, of increases in bunker prices of about 25%, impacting vessels operating spot.

Vessel operating expenses during the 2026 first half reached $111 million from $102 million in the 2025 same period, a modest unexpected increase. The result of the slightly bigger fleet, higher dry docking expenses, and the customary inflationary pressures. On a per ship per day basis, this translated to $10,298, about a quarter of the TCE rate mentioned above. Depreciation amortization expenses, again, driven by the increased size of the fleet, which included the delivery of two MR product tankers and the repatriation of two Suezmax tankers from five-year operating leases, came in at $90 million from $83 million in last year’s first half. General and administrative expenses at $27 million from $23 million in the 2025 first half reflected a somewhat higher management performance-based compensation from the 2025 first half level and inflationary pressures.

As a result of all the above, TEN for the first half of 2026 generated operating income of $273 million from $111 million in last year’s first half, inclusive of a $38 million and a $3.6 million of capital gains, respectively. An increase of 146%. Despite an increase in our financial obligations related to the growth of the fleet, $2.1 billion at the end of June 2026 from $1.8 billion at the end of June 2025, increase in finance costs fell by $5.6 million, the result of lower global interest rates and lower spreads on new and refinance loans. Interest income, on the other hand, remained similar to last year’s equivalent period at $5.6 million. Reflecting the performance outlined above, the result of commercial and operational efficiencies as well as positive market fundamentals, the net income generated by the company reached one of the highest levels in recent memory.

$228 million from $64.5 million in the equivalent 2025 first half, a 253% increase. If we’re to exclude the capital gains recorded in both 2026 and 2025 first half period, as some of you are accustomed in doing, the 2026 first half net income experienced a 112% increase from the 2025 first half, or in dollar terms, $129 million more. In terms of EPS, earnings per share, $7.12 in the first half of this year from $1.70 in last year’s first half. In other words, a 318% increase. Adjusted EBITDA for the period was higher by $131 million from the 2025 first six months and reached $324 million, a 68% increase. Cash at the end of June 2026 stood at $466 million, $179 million above the June 30, 2025 level, and $168 million above cash balances at year-end of 2025. Now let’s go quickly on our Q2 results.

Following the above pattern, and again by operating the fleet of 63.5 vessels from 62 in last year’s second quarter, with 4 vessels on dry dock to 3 in the 2025 same period, gross revenues climbed to $298 million from $193 in the 2025 second quarter, a $105 million increase. Voyage expenses during the second quarter of 2026 increased to $52 million from $32 million in the corresponding 2025 second quarter, primarily reflecting higher bunker prices affecting vessels operating in the spot market. Spot market employment accounted for approximately 12% of total fleet operating days during the 2026 second quarter. Operating expenses on the 63.5 vessels in the fleet were at $57.7 million or a $5 million reduction from the 2025 second quarter, primarily due to the slightly larger fleet and an extra vessel over the 3 that underwent special service in the second quarter of 2025.

Depreciation and amortization expenses for the 2026 second quarter period were $46.3 million from $42.1 million in the 2025 second quarter, the result of a marginally larger fleet and the reintroduction of the 2 straight months as mentioned earlier. General and administrative expenses during the 2026 second quarter reached $14.8 million from $13.2 million in the 2025 second quarter, a marginal $1.6 million increase. Interest and finance costs in the second quarter came in lower from the 2025 second quarter, $22.6 million from $25 million, or a $2.3 million reduction. On the other hand, interest income during the 2026 second quarter was marginally higher than the 2025 equivalent period at $3.4 million.

Reflecting the above performance, the net income for the second quarter of 2026 after a $38 million capital gain climbed to $139.3 million from $26.8 million in last year’s second quarter, which unlike this one, had no gains or losses recorded. In terms of EPS, the above figures translate to $4.40 for this year’s second quarter compared to $0.67 in last year’s second quarter, a 557% increase. In ending, adjusted EBITDA for the second quarter of 2026 was 81% higher from the 2025 second quarter to reach $170.4 million or $76.5 million higher. With this, I’ll pass it back to Nikolas. Thank you.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Thank you, Harrys. I think that has been a very detailed presentation of the growth of the company. We’ve been operating a similar size ship. If you go back, George, to the slide of over the years, and you will see that we have been operating a fleet of a similar size for the last 10 years. Where do you see the financial statistics of There you go.

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: Slide 10.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: I think we’ve been operating a fleet of around 60 to 65 vessels for the last 10 years. There you can see the big effect, the growth of the cash, the growth of earnings, the growth of EBITDA. Hopefully, 2026 will be a milestone year where I think as Nicolas Bornozis said, the company will be exceeding in revenues the billion dollars significantly and of course, a very strong EBITDA. With this, I would like to open the floor for any questions.

Conference Moderator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question comes from line of Poe Fratt with Alliance Global Partners. Please proceed with your question.

Poe Fratt, Analyst, Alliance Global Partners: Hello. Harry, I would just like to clarify the profit-sharing contribution for the second quarter. I think I heard you say that the first half contribution was $71 million, and I had the first quarter contribution at $40 million. So was the second quarter contribution $31 million?

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: No. You rightly heard the contribution for the first half of 2026 was $71 million, seven one, $71 million. While last year it was $10, 4.5 and kind of $5.6 million. That was the profit-sharing received at the same period last year. So effectively, we generated seven times more the profit-sharing that we did this time last year.

Poe Fratt, Analyst, Alliance Global Partners: Yeah.

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: Perhaps as an interesting tidbit is that for the entire 2025 period, the profit share was at $46 million. So you can imagine at $70 million in the first half that things are looking rosier.

Poe Fratt, Analyst, Alliance Global Partners: Yeah. I just wanted to clarify what the contribution was in the second quarter.

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: Oh, yeah, sorry. In the second quarter of 2026, it was $30.5 million. Correct.

Poe Fratt, Analyst, Alliance Global Partners: Okay, great.

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: It was 4 and $30.5.

Poe Fratt, Analyst, Alliance Global Partners: Yep, that is helpful. Can you help me understand the outlook for the second half of the year from a profit-sharing standpoint? It looks like some of the VLs may have moved on to profit-sharing agreements, so relative to the second quarter, should we see the profit-sharing contribution increase or stay about the same? Any color would be helpful on the profit-sharing contribution.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Well, we are expecting significant increase in profit sharing for the second half of the year. We have renegotiated drastic increases in minimums. Also, the profit-sharing arrangements are much more favorable to the owners. As I said, the charterers are very eager to employ good quality vessels, so they are much more giving. Of course, at the same time, it is a win-win situation because, as you know, the refinery margins are on all-time highs. So our clients, and we are very happy about that, are making very good returns, so they are not stingy in sharing some of their returns with us, the transporters.

Harrys Kosmatos, Chief Financial Officer, Tsakos Energy Navigation Ltd.: No, look, it’s very positive, Paul, because we have 13 vessels today on a profit-sharing arrangement, nine of which are of the bigger sizes, Suezmaxes and VL. So we have seven Suezmaxes and two VLs in the profit-sharing arrangement. So as you can imagine, we expect that the profit sharing will be quite meaningful going forward.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: We’ll be able to offer 30 for Thanksgiving, it seems this year.

Poe Fratt, Analyst, Alliance Global Partners: I hope with a lot of stuffing. When you look at the asset sales program, you sold two in August. Can you just highlight the gain that you’re going to report in the third quarter from those sales? Then more importantly, what other assets might you sell over the second half of the year looking into the first half of 2027?

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Well, as I said, we look at those vessels. All the vessels that are in the list have been built by then on behalf of our clients who are still the same, the Exxons, the Chevrons, the Totals 20 years ago or 15 years ago. So they’re very good quality ships. I have to drag them out of our new building department because they get sentimental with this. But actually, the next sale is going to be, I will be sentimental also because it’s a vessel that is older than my kids. So I think it’s one of our older ships, the Andes, which was built around 2003. So she’s going to be the next one to go.

And of course, for further trading, she has been trading for one of the big majors since she was built, and the major wants the vessel up to now, keeps on chartering the vessel up to now at very healthy rates. But I think there is always a time to when someone becomes of legal age of 21 and over, we let them go.

Poe Fratt, Analyst, Alliance Global Partners: Got you. Can you just talk about your appetite for new builds? I thought I heard you say that new build pricing has moved up where it is less, maybe I thought I heard you say less reasonable than it was. What should we expect on the new building side as we look out over the next 12 months?

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Well, for us as a company, we are actually very busy right now absorbing one of our largest growths. I think a big milestone of 26 vessels with a cost of $3.2 billion. We still have to take over 19. I think we are going to see a huge effect to our earnings to our revenues because three VLs are coming in. Of course our VLs, less than a year ago, we contracted them, and they have almost, I would say, doubled in price since then. So today, if we decided not to sell them as contracts, we would almost double the price that we ordered them. The same goes for all our 26 new buildings. So I think we are not right now, to be correct, we are looking again at vessels with long employment, specialized vessels like the shuttle tankers against accretive long-term contracts.

But I think we are very well placed. We are in a good place, and we still have 19 new buildings that are well into the money to take delivery of.

Poe Fratt, Analyst, Alliance Global Partners: Great. I think you said that 30% higher than your $3.1 billion stated program, so closer to market value is $4 billion. Great.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Yeah.

Poe Fratt, Analyst, Alliance Global Partners: Thank you. I’ll turn it back.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Thank you.

Poe Fratt, Analyst, Alliance Global Partners: Thanks, sir.

Conference Moderator: As a reminder, if you would like to ask a question, press star one on your telephone keypad. Our next question comes from the line of Climent Molins with Value Investor’s Edge. Please proceed with your question.

Climent Molins, Analyst, Value Investor’s Edge: Hi, good afternoon, and thank you for taking my questions.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Hi.

Climent Molins, Analyst, Value Investor’s Edge: You hint at higher distribution going forward, which makes sense considering your financial position and the free cash flow you are currently generating. In the past, you had mentioned potentially declaring, let’s say, supplemental dividends as net proceeds from asset sales rolling. Could you give us an update on this front? It is obviously a discussion for the board, but any color you can give us?

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Sure. Well, I think our intention is to significantly reward or increase the reward to our shareholders because I think as our chairman said, we like to share. Being the major shareholders ourselves, we like to share the upside pari-passu with them. So we are looking forward for a nice dividend announcement after our strategy meeting in November. On the special dividend, we did it a couple of times, but we were told off by the analyst because it complicates, and I think rightly so, it complicates. They do not know if this is something that is going to be recurrent or not. So I would rather add or increase the normal semi-annual dividends because we need to keep our analysts happy and less confused rather than doing a special dividend.

They felt that was something that was a one-time event and got wasted, whereas when you have a company that has significant cash flow, significant cash, as Harry, I think, referred to our cash since the six months has also grown in a big way. Down the road, we have our perpetual preferred, which is $120 million at 9.25%, and we are considering that actually taking this out. It’s not an obligation, but I think it will be a very good use of cash. It will add anywhere to between $0.30 and $0.40 to the bottom line, just by saving on the high coupon. And of course, continue to invest in our new building program.

Climent Molins, Analyst, Value Investor’s Edge: Yeah. Taking off the preferred definitely makes sense. A special dividend is not that confusing, but obviously it’s a board decision, so we’ll see. I have another question on the dividend. Is there any appetite to potentially move to a quarterly payment schedule? All your peers follow that model, so I was wondering whether this is something you’d consider.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Well, we actually have moved, I think about 10 years ago, from a quarterly dividend to a semi-annual dividend because for many reasons, for logistical purposes. Shipping is a little operationally a more complicated business. We are not land block, we’re not land-based. It’s not that we have five or 10 factories in various states that they produce. We have ships all over. Sometimes a voyage takes more than a quarter. So, I think it’s more appropriate for shipping, and I think even the President of the United States referred to it about a year ago, saying that the quarterly dividends takes a lot of time, from management time, CFO time, and also it does not portray the actuality of the business.

I think the short answer is we would maintain the semi-annual dividend because I’d rather be able to give a big semi-annual dividend just rather than smaller quarterly ones.

Conference Moderator: Does that complete your question?

Climent Molins, Analyst, Value Investor’s Edge: Yeah.

Conference Moderator: Our next question comes from the line of Poe Fratt with Alliance Global Partners. Please proceed with your question.

Poe Fratt, Analyst, Alliance Global Partners: Thanks for taking the follow-up. Nikos, on the last couple of calls, you’ve talked about potentially doing a restructuring of the company and maybe carving out the shuttle tankers or other assets that are in long-term charters. Can you update us on any progress on that plan?

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Well, I think restructuring is something that our company, for 33 years, we have never had to do. I think perhaps replanning could be the word because I guess I’m taking the opportunity from what you said to say that TEN is perhaps one of the very few companies that we have never restructured or renegotiated any of our loans in the last 33 years. We’ve been paying our obligation, paying dividend continuously, paying our lenders continuously, and then maintaining a steady ship. The company is looking at ways to add more value. We will not reduce the size of the fleet. We might consider, again, closer to the end of our new building program, to carve out a small part of our fixed, I would say, the long-term fleet, about 20 vessels, but within TEN. It will be within TEN.

We are approached by a lot of investors who would like to participate in what we say, and I think it’s on page 5, which is called TEN Special. It’s like a pizza. You see the 20 vessels there, and those ships have very long employments, 10, 15, 20 years. They appeal to some shareholders that would like to invest into that, but everything would happen within TEN. TEN would maintain at least 60%, 70% of the fleet. So the ships will not be out of the company.

Poe Fratt, Analyst, Alliance Global Partners: Great. Thank you.

Conference Moderator: We have no further questions at this time. Mr. Tsakos, I’d like to turn the floor back over to you for closing comments.

Takis Arapoglou, Chairman of the Board, Tsakos Energy Navigation Ltd.: Nikos, on the last comment, I’d like to just add, if I may, that this is not at the top of our list right now. It’s not something that.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Yes

Takis Arapoglou, Chairman of the Board, Tsakos Energy Navigation Ltd.: we would expect any development

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Yes

Takis Arapoglou, Chairman of the Board, Tsakos Energy Navigation Ltd.: in the near future.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Yes.

Takis Arapoglou, Chairman of the Board, Tsakos Energy Navigation Ltd.: Let’s make that clear.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: Exactly. It’s not on the top of our list, but it is another way that we might consider to prove the hidden value of those ships that have the very long employment. But always, if something happens, will be within TEN. So really, TEN shareholders will not be affected at all. The fleet will maintain its big size, but perhaps a big shareholder will more specifically invest as a minority holder in these assets. But again, as the chairman said, this is more food for thought at this stage. Thank you, Chairman.

Takis Arapoglou, Chairman of the Board, Tsakos Energy Navigation Ltd.: Thank you.

Nikolas Tsakos, Founder and CEO, Tsakos Energy Navigation Ltd.: And with that, again, I would like to wish everybody a good beginning of the new season. We are looking at a healthy period from now to the end of the year. We are actually literally operating in an operational minefield. Not only we have to maintain a steady course but geopolitical events, mainly in the Middle East, are making the daily business change as we speak, and the decisions we have to make. Always with the responsibility to our seafarers, our crews, and of course, the safety of the vessel, the safety of the environment, because those ships are carrying huge quantities of oil, and we do not want to put them in danger. Saying this, these circumstances have created an unprecedented strong market. I think rates right now in the Gulf area, which as you know, has been also attacked by the Houthis. It sounds like a movie.

The Houthis are close to $800,000 a day, approaching $1 million a day for a VLCC in the Gulf. This is uncharted territory, which we are taking advantage of carefully and steadily. We would like the world to be completely peaceful, even if we did not make the returns that we are making, because it will make the sustainability of our business going forward much better. In the meantime, we are taking advantage of the situation. We are one of the biggest companies in Venezuela. Our vessel was the first vessel to lift legal cargos finally from Venezuela. The Russian situation also is putting almost 25% of the world fleet out of the market. We are looking at least for the next year, at good and growing prospects. The management will be attending the Capital Link and other events at the end of the month.

We would like to be able to see as many of you live in the United States and also Europe. With that, we would like again to thank you for your support, and as we said, always remember 9/11 as a very special day for the world and of course, for us and the company. Thank you very much.

Conference Moderator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.