Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the First Quarter 2021 Financial Results. We have with us, Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr. George Saroglou, Chief Operating Officer 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. I must advise you that this conference is being recorded today.

Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis of Capital Link, Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the first quarter of 2021. In case you do not have a copy of today’s earnings release, please call us at 212-661-7566, or e-mail us at ten@capitallink.com, and we will be happy to send a copy to you right away. Please note that parallel of 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. And at this moment, I would like to pass the floor on to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

Thank you, Nicolas. Good morning and good afternoon and thank you for joining our call today. Producing a positive operating income under the present market conditions is a great feat for which Nikolas Tsakos and the team deserve congratulations once again. These results are fully in line with our industrial model and strategy which is to provide high quality service to our blue chip customers while ensuring high levels of cash generation to cover our obligations even in today's weak markets. Continuous fleet renewal, state-of-the-art vessels, operational excellence, and ample liquidity protect TEN and position it to benefit greatly from a market upturn as we all expect. Despite the challenging market, we continue to pay common dividends in an uninterrupted way since inception. We continue to reduce debts and repay outstanding preferred issues. And lastly, and the company is increasing its focus on our ESG footprint and maintain our high governance standards, both I know are areas of increased focus by you the shareholders.

Thank you, Chairman. And although it is never a pleasure to report a loss making quarter, I have to say that with the efforts from everybody in the right directions the first quarter losses were significantly better than the fourth quarter, because I think this is what we are -- that's what logically we are comparing ourselves to the last quarter of 2020, I think we had losses in excess of what was the first quarter saw. In that way we are going towards the right direction as much we have always been saying. The company's strategy of protecting all our obligations with our time charter fleet and profit sharing is working once again. Whatever it be, to have a positive operating performance, small ones Paul will say, just a couple of million dollars, but I think this gives us the ability to take care of all our obligations from the vessels that are on time charter and on profit shares and allows the company to maintain its growth. We are on our fifth down cycle as Mr. Saroglou will show in his slides and every time the company comes stronger out of it. What we are facing today is not only a challenging market, but I think it is a structural change in our industry. And I think this is what we and the heads of our environmental and operational committees headed by Mr. Efthimios Mitropoulos, a former head of the IMO and his team, we are looking on talking to our clients of what will be the ship of the future. And I think this is sometime we spend a lot of time, a lot of effort and we feel very proud so far with the results that we are achieving without losing of course our eye from…

Thank you, Nikolas. Good morning to all of you joining our earnings call today. I will start the call by thanking the officers and staff of the U.S. Coast Guard for their successful efforts in rescuing one of our seafarers 250 miles off the coast of San Francisco. Human life is of paramount importance at sea or at shore, but saving lives at sea most of the times is most challenging due to the prevailing circumstances, weather or otherwise, and events like this one make all of us very proud to belong to the international shipping community by which the U.S. Coast Guard leads by example. We navigate for over a year now through the COVID pandemic and although we see the light at the end of the tunnel, this unprecedented crisis is not over yet. Our priority continues to be the health and well-being of our crew and shore personnel, to have no COVID incidents in the fleet and no disruptions of operations. I'm pleased to report that we have managed the situation with no major incidents and for this reason I would like to offer once again congratulations to our seafarers and shore personnel for their resilience and professionalism during this stressful period to thank Tsakos Columbia Shipmanagement, our technical managers, for their efforts in keeping seafarers safe and in managing crew changes in an environment where regulations and lockdown restrictions made planning a mission impossible, our IT for making sure we operate remotely seamlessly and without disruptions, and last but not least, the team of medical experts that is helping all of us almost daily with good advice in dealing with the deadly virus. The bunker market has been very weak for more than a year now. The price of oil has recovered from the historical levels we have seen during the first half of last year and that made the overall market weakness even harder as bunker prices came almost back to their pre-pandemic levels. But there are also a lot of positives to consider. Oil demand is recovering from the monumental losses of last year and after a strong demand growth year in 2021; experts now see a return to the pre-COVID demand levels by next year. OPEC + managed the collapse in demand diligently and with discipline and has now restored more than 40% of the initial 10 million plus production cuts and plans to gradually add more barrels, which means more cargos to a market that is thirsty for oil, as global oil stocks are now below the key five-year average levels in all main demand areas or is indeed in the developing world. And of course the supply of new tankers continues to be at historically low levels while the global fleet is getting older, and new upcoming regulations are expected to push the phase out of a big part of this aging fleet.

Yes. Thank you, George. Well, quarter one started with positive expectations, despite the difficult market, and we still have such expectations as revenue was $140 million and our loss in quarter one was only $4.8 million, which was less than feared as the loss was successfully contained by our time charters that were still able, as George has mentioned, still able to cover all cash expenses, leaving a surplus of $12 million. While half of our fleet on spot, were able to generate a further $18.5 million. Much of our optimism was also due to the healthy cash reserve inherited from the strong market of the past year, allowing us to meet the challenges of the current downturn. Our results were also affected by taking advantage of the market low to advance four drydockings into quarter one, allowing the vessels to exploit a better market later in the year. However, market conditions did not allow us to benefit much from profit share arrangements, in contrast to the strong prior quarter one, although we do expect profit share will play a major role in the eventual rebound. Daily average TCE per ship was $18,000, a satisfactory average given the large increase in bunker costs and the poor rates available in the market. Operating expenses fell $4 million due to tighter economies in the light of market conditions and partly due to reversal of prior year accruals relating to crew tanks. Average daily OpEx per vessel fell 6% to $7,400 to a big band from $7,900 to $7,400, that is rounded numbers, despite dry-dock costs and a weak dollar. G&A expenses in quarter one fell 10% as management also applied tighter controls on the overheads. As a result of all these factors, TEN achieved positive operating income of $2.2 million. In addition, finance costs fell by $27 million due to reduced debt by $30 million and to lower interest rates and margins and to a $5 million increase in bunker evaluations compared to the prior quarter one. Since the start of the year, poor rates reduced our EBITDA to $37 million. But we were still able to maintain adequate cash reserves, while time charters and vessel sales continue to generate decent cash flow. In fact, we recently sold two more Suezmaxes in a sale and leaseback deal, releasing $17 million cash after repaying $27 million debt. Plus a Panamax, the tanker Maria , releasing $4 million cash after $5 million debt repayment, and we aim to sell more vessels as part of our fleet renewal. Also, we continue our ATM program having raised about $19 million so far this year. In effect, we believe the market will turn during the second half due to positive fundamentals, plus a possible demand rebound as lockdown measures abate and normality returns. And now I will turn the call back to Nicolas.

Paul, thank you very much and looking forward for more positive results next time. And with that we would like to open the floor for any questions.

Thank you very much, sir. Our first question for today is from Randy Giveans from Jefferies. Please go ahead.

Howdy, gentlemen, how’s it going?

Very good. I think it’s time for you to come down to Greece again.

I agree, I agree. Hopefully, sooner rather than later.

We will hope, we will hope, we’re all vaccinated here with our Johnson & Johnson and ready to mingle with clients and friends. Thank you.

Good deal. Well, I’ll be there. A few questions from me. First, I guess just the most timely question, as reported in the news this morning, you’re partnering with Equinor for four dual-fuel Aframax new buildings. Can you comment on that story or maybe provide some additional details of these Equinor assets?

Well, as you know, TEN's model depends on partnering with first class clients. We are in the process of discussing not only with Equinor, but with other clients for the step forward. Our industry is changing. The structure of the industry is changing. We had the biggest change back in the 90s when we OPA 90 changed the actual hull of the vessel. I think we are in the process of the changing of the actual composition of the ships right now and this is something we are discussing with clients. There is not much details we can say, but for us, we are very proud to have the expertise of our clients together with our team in looking for the future, even more environmentally friendly vessels out there and always with an accretive transaction in mind.

Okay, that’s fair. And then with those kinds of accretive transactions, segueing to your LNG charters and those counterparties, can you give a little more color on those three LNG contracts in terms of durations, rates, counterparties?

Well, the star of the energy market for the last, I would say two quarters so far have been the LNGs. So we were very lucky and very well placed and thanks to the efforts of our in-house team, we were able to actually deliver their vessels back-to-back from the previous employments to their new employments without any loss of a single day. So I think that this is really good and when we're talking for LNGs, you that the figures are significantly high. So that was a very important, also passing the surveys very on budget of those vessels. And they range from, I would say, an average of two years to a minimum then of five years for the other employment, with option that takes it up to the eight-year period.

Got it, okay. And then I guess, looking at the kind of just further fleet renewal efforts, and maybe on the sales side, right, you've taken around, or you still have around 15 tankers all around 15 years of age. So is the plan to kind of divest those as you're building these new kind of dual-fuel vessels?

Yes, so I mean this is the next we will be phasing out these very good quality ships. I think perhaps we must be one of the very few companies that we have maintained a very firm belief in where we build our assets, and the majority of our assets have been built in places like Korea and Japan. And I think this is where we are maintaining right now our position. So we are looking to replace those very good assets with assets that are building sister yards.

Got it. And I guess last question, 2Q is now pretty much literally complete. All the other peers give kind of quarter to date rate guidance. Can you provide that for 2Q and just trying to get a sense of how that compares to 1Q?

Well, Q1 was a difficult quarter. But I think as Paul has very elegantly said, I think it was a modest loss managed because of the company’s strategy of time charters in the vessels, so it was a significantly better quarter than the fourth quarter. And I believe that the second quarter with the help of our LNG input to which is going to be significant, will be a better quarter than the one that we just reported. So I think that's as much as I can say, and I think as George and the Chairman said, we are looking at the better days ahead. We have a strong indication from charterers that are out there looking for long-term employment or vessels. The supply side is the lowest in recent memory since the early 90s. So I think the light at the end of the tunnel is appearing slowly, but steadily.

Got it, all right. Well, that's it from me. I'll turn it over. Thank you so much.

Thank you.

Thank you. Our next question is from Magnus Fyhr from HC Wainwright. Please go ahead. Your line is open.

Yes, good afternoon. Just a couple of questions on the appetite among oil companies for time charter contracts. I mean, the trading firms have been pretty busy securing tonnage over the last couple of months. Rates are still very low. But have you seen much of a change from the old company as far as the appetite on maybe taking in more tonnage? And I don't know, how do you structure these contracts with rates still depressed?

Well, I think from what George described earlier, we actually played defense, as you say in the United States. So when a lot of our renewals came in, we decided not to go for long-term charters at this stage. The appetite is there. There are companies that are looking for, I would say, low-balling numbers. But we are in discussion for anyone who is seriously on a minimum and a profit share. So there are quite a few of those businesses that we are discussing. And we are seeing signs that people have belief in the market. We've seen companies like Frontline making new investments in VLCCs recently and only, so I think it is a good sign. And we are seeing mostly pooling. I mean, we are big supporters of pools. We strongly believe that pools are the best way of consolidation. It actually allows you to keep your interest on your ship, run your ship properly, maintain. I mean, as George reported or Paul reported, we were able to control our expenses have another reduction of 6% or 7% in different circumstances, which we are proud of. We went down from 7,900 to 7,400 in OpEx in a difficult time, when COVID restrictions put a lot of pressure on expenses. So I think we're thankful to our men and women on the ships and the officers that are being able to do so. And then through consolidation, we are able to have a better block negotiation with our clients.

All right, thank you. And just going back to the prior questions regarding selling some of these older ships, I mean, these ships are typically the ones that will have the best rebound in asset values if the market recovers, and they could generate significant cash flow as well. How do you balance that having these very well maintained ships that you know very well, and keeping them and maybe capturing some of the market recovery going forward versus staying compliant with new regulations?

Well, Magnus, we are doing transactions, trying to have some imagination in what we do. So one of the ways that you can achieve exactly what you described is with some sales and leaseback transactions that too as you know, are something that the company has always believed in. So in that sense, you are able to sell the vessel forward at a premium or a significant premium for your age, but then maintain exactly what you said use for another three years so if you're trying to capture the upside, so I think you hit the nail on the head with your point.

All right, good, good. And just want one more question, as far as the dry-docking, you brought back some dry-dockings in the 1Q. Refresh my memory, what's your plans now for 2Q? I'm sorry, 3Q, we're almost -- we're basically done with 2Q. So what can you bring forward in 3Q or from 4Q?

We're doing another four bringing forward. We're doing it on the Thomas, the Elias. We're bringing ships that are due early 2022 doing them now because they are in the right location at the right time. So I think it's better to use the summer lull and have them ready as we go forward and the fourth quarter. So I think another four ships, but I would say efficient and efficient dry-dockings when there is the right, the right there.

And then just one last question, if I may, what I mean, the cash balance dropped quite a bit. It's a little bit below with your comfort level, even though it's above my comfort level. What -- do you guys feel comfortable with current cash decision, even though it's come down a little bit?

Thanks to the efforts of our Chairman and the team here, you will find out in the third quarter it has rebounded significantly.

Very good, thank you.

Okay, very good.

There are no further questions that are waiting at this time. I’ll hand the call back to Nikolas Tsakos, CEO. Please go ahead.

Well, before I ask our Chairman to finish his last wise words, I would like again to state that we are in a process of a structural change in our industry. The structural change, as a company, we faced it again, back in the early 90s with the OPA 90. At that time, within four years, we transformed the company from a single, single company to a fully double, double company with the help of everybody. We are -- that was a big change in the hull design of the ship; I would say the biggest hull change since inception of shipping where you today it looks it was like it's a usual thing, but at that time, there was a lot of discussion about its size and safety, and about how efficient and safe it would have been going forward. But it has been proved that it has reduced pollution and I'm knocking on wood, by 99.9%. And having Mr. Mitropoulos here who was in the forefront of those discussions at that time, I think it was a very important move and thank you very much. The same team, our environmental and an operational team is now in discussion with our clients for the change in the engine design, which is the next step. So I think the industry took the environmental changes of the highlight in the early 90s for the OPA 90, and we are in the same process and the company is there with exactly the same enthusiasm, much, much stronger company with the support of our clients and discussing with our clients over the next step. And I think one of your questions earlier about discussions with clients, yes that's what we do. We sit around with them and we try to find what will be the ship of the future and hopefully we can do it by making some good returns in the meantime. And with that, I will ask Takis.

Thank you. Thank you to all.

Ladies and gentlemen, that does conclude the call for today. Thank you, everyone for joining. You may now disconnect.