Tsakos Energy Navigation Q1 Earnings Call Highlights

Key Points

• Tsakos Energy Navigation posted a strong Q1 2026, with net income rising 136% year over year to $89 million and EPS climbing to $2.72. Results were lifted by higher tanker rates, stronger utilization, and more profit-sharing revenue.
• The company raised its dividend to $1 per share for July, bringing total common shareholder distributions to $1.50 per share for the year so far, up from $1.10 a year earlier. Management also said it still has a cash buffer well above $350 million and $3.6 billion in booked revenues over the next two years.
• Executives said geopolitical disruptions are boosting tanker demand by increasing ton-miles and tightening supply, with routes shifting toward the Atlantic and Far East. TEN continues to emphasize fleet renewal and charter coverage, with 83% of the fleet in secured revenue contracts and ongoing vessel sales and newbuild deliveries.

Tsakos Energy Navigation NYSE: TEN reported sharply higher first-quarter 2026 results, with executives saying geopolitical disruptions and strong underlying tanker fundamentals drove higher utilization, stronger rates and increased profit-sharing revenue.

Chairman Efstratios-Georgios Arapoglou said the company’s portfolio-based operating model “has proved it works in good and in bad markets,” citing sustainable profitability, rising dividends and a cash buffer that remains “well above $350 million.” He said the company has booked upfront revenues for the next two years of $3.6 billion across time charters and profit-sharing arrangements.

Founder and CEO Nikolas P. Tsakos said the first quarter reflected both strong market fundamentals and the early effects of geopolitical disruptions, adding that the current second quarter is benefiting more fully from those market effects. “It looks like it’s going to be a much stronger quarter either than this record quarter because of geopolitical effects,” Tsakos said.

First-Quarter Earnings Rise on Higher Rates and Utilization

CFO Theoharrys E. Kosmatos said TEN generated voyage revenues of $253 million in the first quarter, up $56 million from the same period in 2025. Fleet utilization rose to 98.3% from 97.2% a year earlier, with each quarter including two vessels undergoing scheduled dry dockings.

The company’s time charter equivalent rate reached nearly $41,000 per ship per day, compared with about $31,000 per day in the first quarter of 2025, a 33% increase. Kosmatos said the reduction in vessels operating in the spot market helped lower voyage expenses by $6.2 million to $29.8 million.

Vessel operating expenses were $53.3 million, up from $49.6 million a year earlier, reflecting a larger fleet. Operating expenses per ship per day were $9,952, which Kosmatos described as “still competitive” and approximately one-fourth of the TCE rate.

Operating income was just under $110 million, compared with $57 million in last year’s first quarter, which included a $3.5 million capital gain. Net income rose to $89 million from $37.7 million, a 136% increase. Earnings per share were $2.72, compared with $1.04 a year earlier. Adjusted EBITDA increased to $154 million, up nearly $55 million from the first quarter of 2025.

Kosmatos said interest costs fell by $3.2 million despite higher overall loans, which rose to $2.1 billion from $1.9 billion at the end of the 2025 first quarter. He attributed the decline to a lower interest rate environment and lower spreads.

Dividend Increased as Profit-Sharing Revenue Surges

TEN said it will pay a $1 per common share dividend in July, 67% higher than the dividend paid at the same time last year. Including a $0.50 payment made in February, total common shareholder distributions reached $1.50 per share, compared with $1.10 in 2025, representing a $45 million distribution.

During the question-and-answer portion of the call, Kosmatos said profit-sharing revenue exceeded $40 million in the first quarter alone. That compares with $45 million for all of 2025 and $27 million in the fourth quarter of 2025.

President and Chief Operating Officer George V. Saroglou said each $1,000 per day increase in spot rates has a positive $0.13 impact on annual earnings per share, based on the 23 TEN vessels currently exposed to spot rates through spot trading or profit-sharing arrangements.

Geopolitical Disruptions Add to Tanker Demand

Executives repeatedly pointed to geopolitical events as a major driver of market dislocation. Saroglou said the year began with political developments in Venezuela and escalated with the war in the Middle East and the closure of the Strait of Hormuz.

Kosmatos said the war in Iran left more than 5% of the global tanker fleet stranded within the Persian Gulf, prompting countries such as China and India to seek barrels from alternative sources, primarily in the Atlantic Basin. That shift added miles to global seaborne transportation, he said.

Tsakos said more than 20,000 seafarers had been trapped for three months due to the situation around the Strait of Hormuz, calling it “a grave situation.” He also said more than 10% of the world’s VLCCs were blocked.

In response to a question about cargo switching to the Atlantic and the Panama Canal, Tsakos said TEN has seen more voyages to the Far East through the Panama Canal, including West Africa-to-Far East routes. He said those routes “triple the ton-mile distance” and warned that if conditions do not normalize within three months, more delays could appear at the canal.

Fleet Renewal and Charter Coverage Remain Central

Saroglou said TEN has a pro forma fleet of 83 vessels, including conventional tankers, LNG vessels and shuttle tankers. Of the current operating fleet of 63 vessels, he said 23 vessels, or 37%, have market exposure through spot trading or time charters with profit-sharing. He also said 55 vessels, or 83% of the fleet, are in secured revenue contracts, including fixed time charters and time charters with profit-sharing.

The company’s client base includes ExxonMobil, Equinor, Shell, Chevron, TotalEnergies and BP, which Saroglou said reflects TEN’s long-standing industrial model and focus on operational and safety performance.

Saroglou said fleet renewal remains a core part of TEN’s strategy. Since Jan. 1, 2023, the company has sold 18 vessels with an average age of 17 years and 1.7 million deadweight tons of capacity, while replacing them with 34 contracted or acquired modern tankers with an average age of 0.5 years and 4.7 million deadweight tons of capacity.

The company announced the sale and delivery of a 10-year-old VLCC to new owners and said it agreed to buy two 2007-built Suezmax tankers currently operating under sale-and-leaseback agreements by the end of July. In the Q&A session, Tsakos said the company is buying those assets at “less than 50% their current market value.”

Tsakos also said TEN could sell “at least half a dozen” older vessels between now and the end of the year, while continuing a newbuilding program of 26 vessels. Four of those vessels have already been delivered.

Management Weighs LNG and Shuttle Tanker Options

Asked whether TEN might separate its shuttle tanker business into a standalone vehicle, Tsakos said no decision has been made. He said the business remains “an integral part of TEN” while management focuses on operations and deliveries.

On LNG, Tsakos said the market is currently in turmoil but remains “healthy-ish.” He said TEN is taking smaller steps in LNG and is not dependent on that segment because of its diversified fleet. Arapoglou added that energy demand remains strong globally, including demand for gas from the company’s clients.

Regarding an option for a second LNG newbuild, Tsakos said the company expects to discuss the matter with its board around its annual meeting and make a decision “within this quarter.”

Tsakos closed the call by thanking employees at sea and onshore, saying the company remains focused on responding to challenging market conditions while supporting its crews.

About Tsakos Energy Navigation NYSE: TEN

Tsakos Energy Navigation Ltd. NYSE: TEN is an international shipping company specializing in the transportation of crude oil and refined petroleum products. Founded in 1993 by Nikolas P. Tsakos, the company has built a reputation for operating a modern, well-maintained fleet of double-hull tankers. Tsakos Energy Navigation is organized around both ownership and technical management of vessels, offering chartering, commercial operations and crew services under one umbrella.

The company’s fleet consists primarily of very large crude carriers (VLCCs), Suezmax and Aframax tankers, as well as medium-range (MR) and Handy product carriers.

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