Okeanis Eco Tankers Q1 Earnings Call Highlights

Key Points

• Okeanis Eco Tankers reported a record Q1 2026, with adjusted EBITDA of $110 million and adjusted net profit of $89 million, driven by strong tanker fundamentals and geopolitical disruption. Management said the first half of 2026 could be stronger than any prior full year in company history.
• The board declared a $2 per share dividend, the highest quarterly payout since inception and the company’s 16th straight quarterly dividend. Over the last four quarters, Okeanis has returned $5 per share, or 96% of reported net income.
• Management highlighted a sharply improved market outlook, especially from Strait of Hormuz disruption, which it said has removed a large share of VLCC supply and should support tanker rates. Second-quarter bookings were also strong, with a large portion of VLCC and Suezmax days fixed at very elevated rates.

Okeanis Eco Tankers NYSE: ECO reported what management described as a record first quarter of 2026, with executives saying strong tanker fundamentals and geopolitical disruption combined to drive unusually high earnings and bookings for the company’s fleet.

Chief Executive Officer Aristidis Alafouzos said the first quarter and second quarter combined “will be stronger than any previous year” in the company’s history. He said potential distributions tied to the first half are approaching the company’s original listing price in 2018.

Alafouzos attributed the quarter’s strength to several factors, including the reopening of Venezuela, India diversifying crude imports, consolidation in the VLCC market by the Sinokor Aponte joint venture and the market impact from the war in Iran and closure of the Strait of Hormuz. He said the tanker market saw “unprecedented strength” following the disruption, before settling at what he called “extremely elevated rates.”

Record earnings and dividend

Chief Financial Officer Iraklis Sbarounis said Okeanis Eco Tankers achieved a fleet-wide time charter equivalent rate of about $93,000 per vessel per day in the quarter. That included $106,000 per day on spot vessels, $104,000 per day on all operating VLCC days and $82,000 per day on Suezmax operating days, all of which were spot.

The company reported adjusted EBITDA of $110 million, adjusted net profit of $89 million and adjusted earnings per share of $2.33, based on the average share count for the quarter.

The board declared a quarterly dividend of $2 per share, the company’s 16th consecutive quarterly dividend and its highest quarterly dividend since inception. Sbarounis said the dividend represented 88% of reported net income on the company’s fully diluted share count following its January equity transaction.

Over the last four quarters, the company has distributed $5 per share, or 96% of reported net income for the period. Since its Oslo IPO, Sbarounis said Okeanis has paid more than $550 million in dividends, equal to approximately 2.5 times its initial market capitalization. Since the fleet was fully delivered in 2022, the company has paid out 91% of reported net income.

Balance sheet and refinancing

Okeanis ended the quarter with $176.5 million in cash, including a portion of equity proceeds earmarked for the acquisition of the Nissos Tigani and Nissos Vous. The company also had nearly $80 million in trade receivables. Balance sheet debt stood at $683 million, with book leverage of 41%. Sbarounis said market-adjusted net asset value leverage, based on latest broker values and pro forma for acquisitions and recent transactions, was just over 30%.

The company raised $130 million in gross proceeds through an equity offering in January, which management described as accretive.

Sbarounis highlighted three new financings covering four vessels. The company bought back the Nissos Rhenia from its sale-and-leaseback structure and refinanced it with a $50 million bank loan maturing in seven years at SOFR plus 125 basis points. It plans to do the same for the Nissos Despotiko with another $50 million bank loan maturing in nine years at SOFR plus 130 basis points. Okeanis also signed a $90 million bank loan for the Nissos Tigani and Nissos Vous, maturing in eight years at SOFR plus 120 basis points.

Following these moves, Sbarounis said all company loans are priced below 2%, with a weighted average margin of 1.47%. He said that represents an improvement of more than 200 basis points from the company’s position before the LIBOR-to-SOFR transition in mid-2023, with an annual bottom-line impact of more than $15 million on consolidated debt of more than $750 million pro forma for upcoming drawdowns.

Fleet performance and second-quarter bookings

Alafouzos said Okeanis achieved perfect utilization across its fleet in the first quarter. He said the company took delivery of the Nissos Piperi and Nissos Serifopoula during the quarter and was able to fix West Africa cargoes on their first voyages. However, he noted that the ballast voyage from Korea to West Africa was longer than the laden voyage, which negatively affected Suezmax earnings.

On commercial strategy, Alafouzos said Okeanis focused Suezmax trading in the Atlantic Basin and avoided fixing vessels into the East, while keeping voyages shorter. For VLCCs, the company committed early in the quarter to longer voyages to lock in higher earnings, balanced with shorter voyages in the East to maintain exposure.

He acknowledged one commercial decision that he viewed negatively in hindsight: fixing the Nissos Nikouria for one year at a net rate of $90,000 per day. “With hindsight, the market gave us much more,” he said, referring to the spot market.

For the second quarter, Alafouzos said 56% of available VLCC spot days were fixed at $223,900 per day, and 60% of Suezmax days were fixed at $187,300 per day. That produced a fleet-wide average of about $202,900 per day on the fixed portion, representing roughly half the quarter. He said he believes second-quarter earnings are likely to exceed any previous full year of annual earnings for the company, though he noted this remains dependent on the rest of the quarter.

Hormuz disruption central to market outlook

Management spent much of the call discussing the impact of the Strait of Hormuz closure on tanker supply and demand. Alafouzos said roughly 14.9 million barrels per day of crude exports and around 35% of global crude ton-miles normally transit Hormuz.

He estimated that 63 laden VLCCs were trapped inside the Arabian Gulf, more than 55 were waiting outside and roughly 36 were holding at Yanbu. In total, he said 155 VLCCs were effectively removed from spot supply, equal to about 17% of the global VLCC fleet of 920 vessels, or 22% of what he described as the compliant fleet.

Okeanis outlined three possible Hormuz scenarios: continued closure, partial reopening and full reopening. Alafouzos said all three would be supportive for tankers, though the timing and duration of market strength would differ. He said the total pipeline rerouting capacity of about 7.4 million barrels per day leaves a structural shortfall of about 7.5 million barrels per day that must be addressed through long-haul seaborne movements.

In the question-and-answer session, Alafouzos said the company is taking a balanced approach to positioning vessels near Hormuz. He said Okeanis wants to maintain exposure to a potential reopening but does not intend to park all available tonnage outside the region waiting for rates to spike.

Shareholder returns remain priority

Asked about capital allocation, Sbarounis said the company’s policy remains focused on returning as much cash as possible to shareholders within the constraints of its capital structure. He said Okeanis cannot maintain a 100% earnings-per-share payout because of its capital structure and cash flow needs, but will continue to distribute as much as possible.

Alafouzos added that the company is comfortable with its loan-to-value ratio and prefers returning profits to shareholders directly rather than accelerating debt repayment ahead of normal amortization schedules.

Management said general and administrative expense was elevated in the first quarter due partly to timing, the offering and other costs. Sbarounis said full-year G&A is expected to be 10% to 15% higher than last year, with later quarters returning to more typical run rates, while noting that euro-denominated costs and exchange rates can add volatility.

About Okeanis Eco Tankers NYSE: ECO

Okeanis Eco Tankers Corp. is a Marshall Islands–incorporated, publicly traded shipping company specializing in the ownership and operation of eco-design product tankers. The company made its debut on the New York Stock Exchange under the ticker “ECO” in May 2019 following an initial public offering. It focuses on the acquisition of newbuilding medium-range (MR) and long-range (LR) product tankers designed to deliver enhanced fuel efficiency and reduced emissions.

As of its public listing, Okeanis Eco Tankers' fleet comprises twelve eco-efficient vessels built by Hyundai Samho Heavy Industries in South Korea.

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