Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the Second Quarter 2023 Financial Results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. -- I'm sorry, Dr. 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. [Operator Instructions] I must advice you that this conference is being recorded today. And now, I'll pass the floor over to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Advisor of Tsakos Energy Navigation. Please go ahead, sir.

Thank you very much, and good morning to all of our participants. As the operator mentioned, I'm Nicolas Bornozis of Capital Link, Investor Relations Advisor to Tsakos Energy Navigation. Before I continue with the conference call, I would like to take this opportunity to express on behalf of all of us our condolences to the Tsakos family for the loss of Dr. Irene Saroglou-Tsakos, Nickolas' beloved mother, a distinguished figure in Greek shipping, who is also known as the Doctor of Shipping. Dr. Irene Saroglou-Tsakos, she co-founded the Tsakos Group and pioneered naval medicine, passionately authoring medical literature and caring for seafarers and their families. She received numerous prestigious tributes from institutions like the Academy of Athens, the Hellenic Foundation of Cardiology, Euroclassica and many, many others. And again, our condolences to the Tsakos family. And now, I will proceed with a conference call. This morning, the company publicly released its financial results for the second quarter and six months ended June 30, 2023. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at ten@capitallink.com and we will [indiscernible] for you e-mailed 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 slide 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 before passing the floor to Mr. Takis Arapoglou, the Chairman of the Board, I would like, on a happier note, to say that we hope to have Dr. Tsakos with us in New York more often now that his two daughters will be attending Columbia University. And on another happy note, to remind everyone that Tsakos Energy Navigation is celebrating this year the 30th year of being a publicly listed company. I would say a unique and enviable track record, and we all know the company's commitment to creating shareholder value for the long term. And with that, I will pass the floor to Dr. -- to Mr. Takis Arapoglou, the Chairman of the Board of Tsakos Energy Navigation.

Thank you, Nicolas. Good morning, everyone, and thank you for joining our call today. As expected, a great set of results. The results, of course, benefit from continued strength in the market. Management needs to be thoroughly congratulated. They are making best use of all opportunities in the spot and time charter business following the model. The model, of course, allows them to be able to reward shareholders in good and in bad times. So, in this framework, we've been repaying prefs consistently in the last couple of years. And we've continued paying dividends, returning directly or indirectly value to our shareholders. We feel that it is appropriate with this excess liquidity to continue refreshing the fleet, selling old stock and buying new state-of-the-art vessels, which we do. And hopefully, the market will continue from -- going forward and the model will continue to reward everyone. So, that's it for me. Congratulations to Nikolas Tsakos and the team and looking forward to continued success. Thank you. I'll pass on the floor to Nikolas Tsakos.

Thank you, Chairman, and good morning from a very sunny, humid and warm New York. Good thing is air conditioning is working full gear here, so it's a good thing for product carriers. Again, it has been -- the first six months [indiscernible] and thereafter has been an exciting period for energy and tanker shipping. I think we have placed the company in a good position to take advantage of perhaps similar or even better days going ahead, since the supply and demand equation allows us to envision better, better days or similar days. And we see this happening in the marketplace every day since a lot of our major clients are looking to charter our ships and are chartering our ships two or three years down the road with very positive returns, plus profit sharing. And also transactions that happened in the last week VLCCs went out for -- relatively modern VLCC was charted for a three-year period in excess of $50,000, close to $55,000 a day. This is the highest rate on a period that we've seen on a VLCC charter for -- since 2008. And that's -- so it's been a long 15 years to see something like that. And that was from a major oil charter. So, the prospects are good. As Nick Bornozis kindly said, we've been around for 30 years and we're planning to be around for a few more years. The Tsakos Group is the major shareholder in this and we are driving the boat hopefully to safer and wealthier harbors as we go forward. It's been -- the first six months, we took advantage of the timely sale of our first-generation vessels. We are replacing them now with green in our 10 ship green initiative. I would hopefully be flying at the…

Thank you, Nikolas. Good morning to all of you joining our earnings call today. 2023 is a year we celebrate our 30th anniversary as a public company. We reported this morning the unaudited financial results for the second quarter and first half of 2023. Assuming no change in the market conditions during the second part of the year, more probably 2023 is going to be as good, if not better, than 2022, which was the best year since the company's inception. Some key takeaways. We continued to experience the largest change in trade flows to ongoing crude and oil product movements as a result of Western sanctions on Russian seaborne oil. These changes appear to be permanent. Before the war in Ukraine, Europe was the biggest client of Russian oil, but as the war continues, Russian oil was replaced with oil from the United States, West Africa, Guiana, South America and the Middle East, creating a positive ton mile multiplier effect for tanker demand and freight rates. At the same time, tanker new buildings are at an all-time low, with new orders being less than 6% of the existing fleet. Many yards are now reporting availability from 2026. And global oil demand continues to grow, boosted by the post-COVID global recovery and more recently by strong summer air travel, increased oil use in power generation and surging petrochemical activity in China. The latest published forecast from the International Energy Agency continue to have global oil demand growing by 2.2 million barrels per day this year to figure of 102.2 million barrels per day in 2023. If realized, it will be an all-time record. There are global headwinds as well like persistent inflation, tightening global financial condition, the war in Ukraine, and the OPEC+ production cuts until the end of the…

Thank you, George. So, we're looking today at a six-month period and a four-month period. So, in the six months of June, the company earned net income of $240 million, an increase of $106 million from the prior six months. Revenues totaled $483 million, a 32% increase over the prior half year, with voyage expenses falling 24% and vessel operating expenses showing a decrease compared to last year's six months. In the six months, EBITDA increased to $356 million, adding to the company's cash reserves. In the three months of June, the company gained net income of $61 million, helped by a stronger U.S. economy than in the earlier months. Revenues in the three months amounted to $220 million, a 2% increase with operating expenses at a similar level as before. Time charter revenue in the three months amounted to $137 million, while total spot revenue amounted to [$84 million] (ph). Our profit share also contributed $24 million in the quarter. In the three months, vessel voyage expenses fell by 40% due to the prior three months period as expenses decreased due to lower bunker costs. Total vessel operating expenses stayed at the same levels, as did the previous year's three month's depreciation and amortization. In recent months, we have been successful in redeeming large amounts of preferred stocks, totaling over $107 million, which has already resulted in a generous benefit to our bottom-line that will continue over the future. Over the past months, apart from building new vessels and redeeming preferred shares, the company has taken advantage of utilizing in-house resources to restructure much of its organization and to develop the company in new directions. In the remaining months of the year, therefore, this will continue to be a major focus for management. And finally, in order to provide more detail to our financials relating to the three months and to the six months, there will be an SEC filing shortly that will provide considerable extra detail for our shareholders, [unaudited] (ph). Now, I'll pass on to Nikolas.

Nikolas, the floor is yours. Operator?

No, I'm here. I was actually on mute listening to Paul's achievements. So I'm back on. And Paul keep on pounding up the numbers. I think the gist out of what we have said is that we made in six months $240 million, hopefully, it will increase significantly for the year. And out of which $135-or-more million has been distributed, in one way, [indiscernible] into common share dividends and the remaining buying back expensive prefers that were very useful 10 years ago when the company was growing in -- when everybody else was facing a very difficult times and we were growing using these expensive vehicles. We can afford to redeem them and plan for a very, very safe future. But if we had actually dividend out everything to common shareholders, that would be an unprecedented dividend of $4.50 a share on a $20 very, very cheap share. But I think we are here for the long term. If we had done that and we maintained the obligations of our preferreds, very soon, we would be in the problems that a lot of our peer group has been facing over the years. So, our aim is to always keep our head above water literally, navigate safely and profitably going forward. I'm very happy that we took these decisions. And then another $100 million of our net income has gone into green double-fuel vessels. And I think, as George described, a very, very demanding, exciting newbuilding program going forward. So I mean, we put our money where our mouth is. Is this the expression? Okay, because I have -- and we're going forward. Now, with a much more simple and easy-to-navigate balance sheet, we will be able, I think, to increase our dividends for common shareholders also going forward. It has been -- since the end of June, we took advantage of the strong market. We have increased our business. We have made eight new charters. We have extended that surprisingly for many very high levels on our LNGs. We're looking at six on daily -- six figure daily hires on those ships. So, we will be pleasantly hopefully surprised going forward for the nine months and the year. And I think this would be, for sure, another record year. And hopefully 2024, if the predictions are right, could be even a better year. But anyway, I think we are in much safer waters. And with that, I would like to open the floor for any questions. Thank you.

Thank you. [Operator Instructions] Our first question comes from the line of Omar Nokta with Jefferies. Please proceed with your question.

Thank you. Hey, guys, good morning, good afternoon. Always -- as always, a fun and exciting update from the TEN team. I wanted to ask about your fleet makeup as it is and how it could be going forward. Recently your crude tanker exposure has risen as a result of selling some of the older product tankers, but also taking delivery of your more modern crude vessels. You just placed the orders for the two scrubber-fitted MRs. Is this the beginning of an expansion cycle for TEN to maybe bring the fleet back into balance of this [indiscernible] product?

Yes, thank you very much, Omar. Yes, I mean, we took the timely decision for a block sale of a large number of our first-generation vessels that served us amazingly well. When we did those deals back in the -- 15 years ago when we bought -- build those ships, we were the largest ice class operator. We took advantage of that period and those ships really were sold almost at the same price as we bought them 15 years ago. And I'm talking about the eight vessels that we sold in the first six months of the year. And naturally, we do not want to take ourselves out of this market. So, we are building now with a dual-fuel and environmentally much, much, much more friendly similar vessels to replace them. So, we are not -- we would not spend every single penny on building the fleet, but we will continue, and I think we will see the fleet coming back on that side too.

Okay. Thank you. And then, yeah, you mentioned the dual-fuel and you've got the -- you have the Aframax dual-fuel LNG carriers. And you mentioned in your opening remarks, looking at alternative fuels as well. What's your appetite for methanol when it comes to, say, the product tankers? And then, would you order ammonia-ready ships, or would you wait until the ammonia becomes maybe more viable or truly [dual-fuel] (ph) during the construction process?

Well, this is the billion-dollar question that we're -- it reminds me of the vaccines for the COVID. You never knew if we should do Pfizer or if we should do Johnson & Johnson or Moderna. So, thank God we do not have any disease. But, I mean, we follow the lead of our clients. An ammonia-ready vessel is really -- it's a million-dollar investment. So, we might do it, but I'm not convinced that ammonia is the future, mainly because of the hazard that can be for the seafarers and the problems we can have ourselves not wanting to put our seafarers with that risk. And of course, the seafarers' unions, I think, are not looking at ammonia as a happy alternative. On the other hand, methanol, which is somewhere between gas and today's fuel, is something that I would take a chance on, and we're discussing on actually doing also taking methanol as an optionality. I don't know if this is answering your question, but I said, our newbuilding department plus our clients, we are looking very closely to the alternatives of going forward.

Thank you. Definitely, Nik, that's helpful. And maybe just one final one for me. Just on the two MR newbuilding, what's the idea in terms of deploying those ships? Are you already in discussions with the customer to put those on term charters ahead of delivery? Or are these more opportunistic and you intend to take delivery of them and then if you put them on contract, great, you keep them on the spot, great? Just wanted to get a sense of how you're -- how these ships are looking in terms of...

Well, if you look at our -- currently we have 10 vessels being built. And I mean, you will see that out of the 10 vessels, six are already with long charters and profit shares and very accretive transactions. Then, we have the Suezmax, which I'm very excited about, and of course, the MRs. So, we are keeping those ships to -- I would say, to play with the market. We might -- there is pressure mainly to charter a couple of those ships along with profit sharing arrangements, which we will do against our clients, very good names, but we will keep also a spot exposure.

Got it. Okay. Well, thank you. Thanks, Nik. Thanks, team. I'll pass it over.

Thank you.

Thank you. Our next question comes from the line of Climent Molins with Value Investor's Edge. Please proceed with your question.

Good morning. Thank you for taking my questions. I would actually start by asking about G&A, which increased significantly quarter-over-quarter. Could you provide some commentary on the drivers behind the increase? And how should we think about G&A going forward? Should we expect it to return to the $7 million, $8 million range?

Well, our G&A, if you look at it, historically, is one of the lowest in the industry. I think this year, it has gone up because of all the issues that I think Paul discussed about the organizing a huge part of our organization against cyberattacks, having a new state-of-the-art control room. So, yes, the short is, I think we will be going back to where we were after this initial, very significant protection investment going forward.

Thanks for the color. And regarding the dividend, you declared the special $0.40 distribution. How should we think about dividends going forward? Do you plan to maintain the regular dividend and use the special distributions to compliment them? Or what's the overall strategy?

Yeah, this has always been our strategy. We'll pay something in June. We'll pay -- June and December are the steady dividends. And in occasions like now when we have very good earnings, we will be topping that up. So -- and this has been -- if you look, I think, George -- Mr. Saroglou has done a slide that shows that we've been doing this through thick and thin. Even at times that we made very little money, we still maintained our dividend policy, because it's very important for shareholders to have this stability.

Makes sense. And final question from me. You did not renew the ATM, which makes a lot of sense given the significant discount your shares are trading at. Is there any appetite to potentially repurchase shares?

We will. As it is not on the top of the list. And I think we refer it -- we refer to it into our press release. Our priority is, of course, to reduce our debt, then our perpetual preferreds is another priority to reduce. And of course, our main issues to replace the fleet and to increase the dividend. And after that, we might consider. But as you know, we only have 30 million shares outstanding. The management and the Tsakos family won close to 40% of that. So, we do not want to reduce liquidity. We feel much more comfortable rewarding shareholders by dividends rather than paying shareholders to leave us.

Makes sense. That's all from me. Thank you for taking my questions.

Thank you.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Dr. Tsakos for any final comments.

Well, thank you very much. It has been a pleasure announcing another record profit period. It is always and we're looking forward to maintain and enhance our results. I was happy to also to say that we didn't talk about it a lot. Paul mentioned it, our CFO, that we do not only have a positive income, but we are also maintaining control on our expenses, because I think this is very important. Many times in a good market, people forget the expenses and that bites them when things turn soar. So, I think that is also a good sign from us. We are there to -- our aim now, I think, is to get our share price to the levels it should be. And I think it has a long way to go from where we are today. We will not -- we're not one quarter-minded company, so we will not do things just to make investors happy for the next quarter and then surprise them on the following one. We're looking at things more longer term. And we want to thank you for your support. As Nicolas Bornozis said, we will be celebrating our actually 30 years since we entered the Oslo Stock Exchange back in October of 1993. And we will having -- we will have a presentation of the company's doings in London next week for that and in New York on the actual date, and of course, later in the month also back in Europe. So, thank you very much and looking forward to meet a few of you and help you appreciate the value of our share.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.