Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the First Quarter 2025 Financial Results. We have with us today Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, Founder and CEO; Mr. Paul Durham, Chief Financial Officer; Mr. George Saroglou, President and Chief Operating Officer; Mr. Harrys Kosmatos, Co- CFO of the company. [Operator Instructions]. I must advise that this conference is being recorded today. And now I'll pass the floor over to Mr. Nicolas Bornozis, President of Capital Link, and Investor Relations adviser to Tsakos Energy Navigation Ltd. Please go ahead, sir.

Good morning, and thank you very much. Good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link, and the Investor Relations Adviser to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the first quarter ended March 31, 2025. 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 10@capitallink.com, and we will have a copy 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 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 before I pass the floor over to the Chairman, please let me wish a belated birthday to Dr. Tsakos and his wife, Celia. And I understand that you had a very special birthday gift being in Korea and taking care of the delivery of the Suezmax tanker, Dr. Irene Tsakos. That vessel bears your mother's name and the vessel will have the Greek flag. And also, you have, at the same time, the naming of the sister vessel, Cilia T. which will bear your wife's name. So it has been a very special moment in the company's history and I'd like to congratulate you. And with this, I will pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead.

Thank you. Thank you, Nikolas. Good morning, good afternoon, everyone. Thank you again for joining us today in our call reporting our Q1 results. It's another quarter of excellent financial results driven by the usual superior operating track record of 10, supported, of course, by strong market fundamentals. This allows them to continue rewarding shareholders with a healthy dividend as it has been doing continuously since inception. As you've read in the press release, TEN's has built a continuously -- and continuously grows on a rolling basis, a stream of high- quality committed future income of currently approximately $3.7 billion, spanning over a number of years through long-term accretive charters or a substantial part of its fleet, which ensures profitability limit, volatility and provide greater predictability in its earnings. At the same time, of course, TEN continuously renews the fleet with modern state-of-the-art vessels through an unprecedented in size, 21 vessels now being built and selling our old tonnage. You would agree that this is not the typical more sensitive model of shipping companies protecting them against market shortcomings yet. We believe that all these positive characteristics of the 10 industrial model are not properly reflected in our stock price which is being valued in the same way as other companies in the sector with much less robust attributes. This is perhaps because most followers of the sector have a much shorter time horizon than our industrial model deserves. We hope that investors will focus on this and upgrade the valuation of our stock. I'll leave you to reflect on this and congratulate again Nikos Tsakos and his team for the excellent results and wish them more of the same. So thank you, and over to you, Nikolas.

Thank you, Chairman, and good morning, good afternoon to all of you that are following our first quarter of 2025 results. As the Chairman said, it has been a solid period. We are navigating literally in very turbulent waters around the world, more for geopolitical events. I mean the beginning of the year has been a wave of uncertainty as far as business -- our business possibilities. A lot of talk about tariffs, a lot of talk about extra port costs, a lot of talk about protectionism. And of course, now this very unsettling situation that is escalating in the Middle East. But I think I'm not -- cannot make anybody happy. However, we have been able to navigate this turbulent waters, again, successfully, safely and profitably for the majority, of course, our main profitability is important, but the safety of our crew and the people on board our ships is even more important, and we have had another good run and safe run on this segment. Regardless of the uncertainties, the underlying market conditions are strong. It is very hard for us and our chartering team to maintain any vessels in the spot market. There is a huge demand for taking even older ships. And I will give you examples, which I haven't seen in my 30-plus years in business, any of our ships can be charged anywhere up to 10 to 15 years, even older, older good quality ships that we operate as I'm sure you know. And I mean, we have one of our oldest, if not our older ship, even older than my twin daughters, keeps on being chartered by one of the big major oil companies year after year. I think she is right now on her 20th extension, and she's 23 years old and…

Thank you, Nikos. We are very pleased to report today another profitable quarter. We continue to operate in a very good freight market environment. Energy Majors continue to approach our company for time charter business. And as Mr. Tsakos mentioned, since the start of the year, we have had 29 new time charter features. Total fleet contracted revenue, the backlog as of today stands approximately at $3.7 billion. We have built in TEN one of the largest transporter of energy in the world. We have started with 4 vessels back in 1993 and we have turned every crisis the world and shipping has faced into a growth opportunity. We now have a pro forma fleet of 82 vessels, thanks to the company's crisis-resistant model. And during these 32 years, we have combined self-generated cash, traditional bank lending and countercyclical capital market fundraising in order to build the corporate fleet. The fleet today is modern, diversified and versatile covering both the conventional and specialized transportation requirements of our clients, which are mainly the major oil companies, blue-chip names with global reach. In Slide 5, we list the pro forma fleet of all conventional tankers, both group and product carriers. The red colors shows the vessels that trade in the spot market and our new buildings under construction especially when you see TEN instead of a vessel name, the ticker NB TBN. With light blue, we have the vessels that are on time chart with profit sharing, and with dark blue, the vessels that are on fixed rate time charters. In the next slide, we list the pro forma diversified fleet, which consists of our 2 LNG vessels and our 16 vessels shuttle tanker fleet. We are one of the largest shuttle tanker operators in the world, following the recently announced deal…

Corporate Development Officer & Co-CFO Yes. Thank you, George. Thank you, George, for passing all the major points that I think we need to highlight. And with this, I will just go over a brief overview of the financials that we presented earlier today. So during the first quarter of 2025, TEN operated just about 62 vessels, one over the equivalent 2024 period and shifted fleet employment more towards secured revenue contracts to capture the increased appetite from all majors to lock their long-term transportation needs. As a result, TEN's exposure to subcontract increased from about 73% in the first quarter of 2024 to 80% in the third quarter of 2025. By contrast, the fleet pure spot exposure between the 2024 and 2025 1st quarter period declined from 19% to about 18%. Despite this recalibration of flip employment to conform the sensing back approach to shipping TEN's ability to maintain a notable presence in the still healthy, strong spot market will actually enhance as emphasis was placed on profit sharing contracts, which when combined with spot picture increase the fleet's ability to capture market mix from 44% in last year's third quarter to 47% in this year -- this quarter. Staying on fleet dynamics, during the first quarter of 2025, 2 vessels underwent scheduled dry docking compared to 5 in the 2024 1st quarter, ensuring a near maximum fleet utilization of 97.2%, resulting from the above, below the fleet, the high fleet utilization and the increased base in secured revenue contracts, some would neutralize earnings pressure, the softer spot market earlier in the year may have created as TEN's fleet generated $197.1 million in gross revenues, a little under the $201.5 million in the first quarter of 2024. The average time charter equivalent per ship per day that corresponded to…

Harrys, thank you. But for your very -- to the point and accurate presentation. And I think as we said, it has been -- the beginning of this year has been a very peculiar and turbulent year, starting with the restriction of shipping. And as we usually say, our aim is -- we have the truck drivers of the season. We need open roads and not protection and [ tolls ]. And on top of this, the recent intensified geopolitical turmoil is putting us literally to navigate very turbulent waters, which I think we have been successfully and profitably doing and looking at the tanker market and the majority of the crude trades, there is huge demand for more business. As we have said, it has been a very strong year of expansion. This is our largest expansion until our next one. And we're looking to still grow to segments that we have not grown up yet for good reasons like the VLCC and the LNG. The market environment is positive. A lot of demand, we have our chartering department has to try and keep some ships on the spot market with huge demand even for all the ships, as I mentioned, the example of our 2003 vessel, which has been continuously chartered with one of the major oil companies since their inception which is a very good proof for our technical managers, the way they operate the ships and the trust that they are able to share with the oil companies. So overall, an uncertain period for the world, but something that we keep under control, at least for our side of the business, we have been able to combine as the Chairman earlier said, and I presented growth and support now. I'll just put it on the slides over the years. And growth and strength over the crisis and strong dividend payments and debt reduction. And with this, I would like to open the floor if there are any questions, please we are here to answer.

[Operator Instructions]. Our first question come from the line of Poe Fratt with Alliance Global Partners.

Can you just highlight what the second quarter new build costs will be? I'm looking at roughly $130 million. Is that in the ballpark for the second quarter newbuild payments?

Corporate Development Officer & Co-CFO So for the second quarter of '25, we have one of our DP2s that will be coming into the fleet. This vessel has -- the holding cost is just under $130 million. And we expect to pay approximately $17 million remaining for that quarter [indiscernible] out of equity. The rest has been arranged through a [indiscernible]. We also have to pay a second installment, the second 5% installment on the 9 new built in of the 9 DP2 shuttle tankers of $67 million, but that will make the second part [indiscernible] on payment that we are required to make until the delivery of the best vessel, we will not make any other payments on that because we are looking to getting a predelivery financing on those vessels as well. And also, we expect one of the [indiscernible] to be delivered in the next quarter. And again, this has a value somewhere in the mid-80s, and we're looking to raise somewhere between 75% financing. We're very close to doing that, and the rest will be the yet to be paid out of cash reserves. So these are more or less what we have scheduled currently for the next quarter as regards to the [indiscernible].

Okay. And just to clarify, so the $67 million on the shuttle tankers will fall into the second quarter, not the rest of the year. So that's a second quarter event, Harrys?

Corporate Development Officer & Co-CFO They are scheduled for July. For July this year.

Third quarter. Okay. And then when you -- Nikos, you talked about that you're underrepresented or you don't have as much exposure to VLCC's and where we should stay tuned. My impression is that the bid ask in the S&P market is still -- I guess, could you characterize how the bid ask is in the S&P market right now, especially for these since you mentioned these?

We are always looking to build ships against clients wishes and of course, when opportunities arise. I mean our first aim is to build good quality Korean or Japanese ships. And when -- and there are not many of them out there. So when we get an opportunity, it's something that we seriously look. As you look at our fleet, we're down to 3 VLs. And I think for a company that we'll be close to 90 ships before the -- in a pro forma basis, we need to increase these segments in the market. And we're looking at opportunities out there. We have seen -- and I think we have been able to time a good reduction of the newbuilding prices from top yards. And this is what we are looking to take advantage of.

Okay. Great. And then you did sell in the first quarter a 2009 Suezmax. Can you just sort of help me understand sort of your fleet strategy as far as are you going to continue to sell older assets as you see decent bids out there? Or is your fleet going to stay roughly flat with the newbuilds increasing the fleet over time?

I mean we are always taking advantage of the S&P market in renewing the fleet. I think we are looking to sell at least half a dozen ships from now to the end of the year. We are very close in 3 or 4 transactions that might take place before the fourth quarter, which will release close to 100 million of net cash flow. And of course, it will enhance our ability to pay dividends, reduce debt and at the same time would not affect our strong cash balances in -- when we grow the business for further expansion.

Okay. And I know it's probably hard at this point in time. Can you give us an outlook for the dividend, the second half dividend that you typically pay in December?

Well, I mean -- I cannot because this is taking -- our strategy meeting is taking place every October in Greece, and that's when people sit under the sun and decide having some wine on the dividend. But joking apart, we hope to have at least a similar dividend to the first half to say at least.

Great. That's helpful. And then you did highlight that your NAV is, you think, is north of $60. The stock is a little bit under $20. So it's at a 35% -- it's trading at 35% of NAV. Is there anything that you think that you should do to help close that gap? Or should we just -- I guess, just is there anything that you corporate actions wise, you can take to help close that gap?

Well, I think what we have to do is to try as the Chairman, I think the Chairman, perhaps he can -- at the end of this, he can give us, again, the same presentation, is that to present the difference of TEN, which has an industrial model proven for 30 years when the other shipping companies that are go -- are more fluctuating. I mean this is -- we still have a small flow of shares, excluding the management and the family. So if someone was there to do a buyback, it will be completely dilute even more the free flow. So I think we are looking for various scenarios where people will understand the value of the company. One of them would be, and we've been discussing going forward, some sort of spinoff of the LNG and shuttle tanker fleet that has a huge -- a huge cash flow for the next -- with an average of 12.5 years. that, of course, that would be able to help also the mother company. But these are still discussions we're internally having. We don't have to do anything for the next couple of years. The company has a lot of liquidity. There's no need to raise capital, just needs to become -- to make the point more evident.

[Operator Instructions]. I'm not showing any further questions at this time. I would now like to hand the call back over to Mr. Nikolas Tsakos for any closing remarks.

Well, I think you guys have heard too much from my side. It has been an exciting first 6 months, and hopefully, we can make the remaining of the year exciting. We wish for everybody to have a peaceful summer, although it doesn't look very likely, but we hope everybody would be able to make sense of what's happening and have a much more peaceful environment that we operate right now. And with that, I will ask our Chairman to Mr. Takis Arapoglou to close our presentation. Thank you.

Thank you, Nikos. So on the question of closing the gap on the price to NAV and the mention of a buyback, I would rather pay people to stay through dividends and pay them to leave. So I think that I hope investors will understand the value of the stock and treat it differently to your usual other shipping assets in the market which behave and trade in a different way. We provide an almost stable stream of income going forward, which is not a one-off. It's being rolled year-after-year with additional transactions. And this provides a different environment in which we operate. And I hope that investors will understand the distinction. So that's it for me for now.

Thank you, Chairman. Well, I think just again not to -- and this is more for the analysts, I think our type of operation, which is much more industrial. And it has a proven record of 32 consecutive -- dividend and growth is not -- there should not be measured on net asset value. I think net asset value is completely for companies that have no operation I mean, we have $3.7 billion with an average 12.5 years of forward income fixed at the minimum to make it -- to make everybody feel very, very young. We have 180 years of fixed employment for all our ships, which means I think even our great grandchildren might be there to receive some of the dividends at the end of the period. So the model of net asset value, which actually takes a ship that might be healthy and just sitting in the middle of the ocean with no cargo and give it the same value with the ship that has 15 or 10-year it's a wrong -- or at least, it's not representative of what we'll do. I think we should be looking to be measured on EBITDA multiples like or earning multiples. And right now, if we look -- I mean, we're measuring a 2 or 3x EBITDA multiples is where we have been measured at 8x EBITDA multiples. And that's what we're going to try and make better through the spin-off, and that's the only reason we might be doing a spin-off is to prove the point. It's not because the company is actually putting aside close to $500,000 of cash on a daily basis. After all, our expenses. So the last thing we need is to raise equity. We will have to pay dividend, grow and reduce debt. And again, with that, I would like to -- I would like to let our analysts think a bit and perhaps start measuring companies like ours on that measure rather than net asset value. And of course...

Nikos if I may interrupt, Nikos?

Yes, please. Sorry.

And also, if you look at -- if you take last year's dividend and perhaps we will not be that far this year at the present level of our stock price, we're talking about an 8%, 9% dividend yield, which is not something that you find in the sector often. So -- and this is the proof of the model really if you look at it. So they're relatively limited payout. So I think what Nikos says is correct. Net asset value is a very static model. We don't run a static business. And EBITDA is the best indicator of the performance of the fleet. Thank you.

Thank you, and all the best for the remaining of the year, our team is in New York. I know you guys are having a very nice lunch. I presume, I hope at a Greek restaurant sitting outdoors very, very soon. Send us some picture and a doggy bag for us. Thank you.

Take care. Bye-bye. Thank you, everyone.

Thank you. Bye-bye.

This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of the day.