Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the Second Quarter 2025 financial results. We have with us today Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, Founder and CEO; and Mr. George Saroglou, President and Chief Operating Officer; and Mr. Harrys Kosmatos, Co-CFO 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'd like to advise that this conference is being recorded today. And now I pass the floor over to your host, Mr. Nicolas Bornozis, President of Capital Link and Investor Relations adviser to Tsakos Energy Navigation. Please go ahead, sir.

Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations adviser to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the 2nd quarter and 6 months ended on June 30, 2025. In case we 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 have a copy for you emailed right away. Please note that prior 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 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 to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Please go ahead, sir.

Thank you. Thank you, Nicolas. Good morning, good afternoon to everyone. In the tanker market with still strong fundamentals, we continue to form extremely well. sticking to our well-known industrial model that the CEO, Niko Tsakos, has described many times, generating healthy contracted revenue under very strict cost control, as you see in the numbers. At the same time, we're selling all the vessels and replacing them with new state-of-the-art ships keeping a young fleet attractive to our customers. I will remind you that some time ago, we identified the lack of good rating on VLCCs. We are correcting this now. And as you've seen, we've gone ahead to order 3 new VLCCs with scrubbers [indiscernible] and 1. So we are rebalancing the portfolio, and we are filling a gap that we always wanted to fill. So again, the results, well done to Nikos Tsakos and his team, best wishes for every success going forward. So over to you, Nikos.

Yes. Thank you, Chairman, and good morning to everybody. It's a pleasure to be here. After the short summer lull, whereas in TEN, we did not experience such a lull because the company was very active during the summer months. We find it always interesting to make sure that during the slow seasonal months of the summer, perhaps is the best time do business when not everybody is around his desk. So we've been busy in August at the order in the 3 plus 1 vessel, taking delivery of in August and in July starting from June of our Suezmaxes and our shuttle tankers with long employment, selling older vessels and ordering, as the Chairman said, supporting the VLCC segment of our company, we have been traditionally a company with a larger number of VLCCs. And we renewed part of the fleet some years ago, and now it's very much time to come up with a strong environmentally friendly vessels, all of them built in South Korea in the traditional yards that we have been supporting over the years, like Hyundai, I mean we must be one of the very few companies, but we are very proud to take delivery of our vessels, thanks to our new building capacity and capability, we are just to deliver over 150 million new building in the last -- less than 30 years. And these vessels have been delivered from what I would say is the core peer group of shipbuilders in the world. We started in April with in Samsung. We moved in June to Hyundai in Korea, and we just renewed our relationship with what used to be called Daewoo, which we're just right now building VLCCs there. So the company is following this model of quality comes first. We are not…

Thank you, Nikos. We are pleased to report today another profitable quarter. Tanker markets have remained healthy through 2025 to date. Energy majors continue to approach our company for time charter business. And as we speak today, total fleet contracted revenue, the backlog that we have today, the minimum is approximately $3.7 billion...

Which coincides -- equates to more than $120 per share, just to put it in share perspective. That's the limit.

TEN is 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. Today, we have a pro forma fleet of 82 vessels, thanks to the company's crisis resistant model. During these 32 years, we have combined self-generated cash traditional bank lending and countercyclical capital markets fundraising in order to build the corporate fleet. Fleet modernity is an integral part of our operating model. We built vessels at the best shipyards. We acquired very modern, high-specification tonnage, and at the same time, we sell some of the older vessels in the fleet. We have built a young, diversified and versatile fleet covering both the conventional and specialized transportation requirements of our clients, which are mainly major energy concerns, blue-chip names with global risk. In Slide #4, we list the pro forma fleet of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market and our new buildings under construction. Since our last earnings call, we have added 3 new building VLCCs to boost our presence in a sector that we felt we needed to increase the number of vessels we operate. and with very good solid fundamentals as a big part of the VLCC fleet in the water is over 15 years. With light blue, we have the vessels that are on time charter 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 vessel shuttle tanker fleet. We are one of the largest shuttle tanker operators in the…

Thank you. Thank you, George. So let me start with the first half highlights. With a slightly larger fleet, both in terms of vessels and deadweight tons when compared to the first half of 2024, TEN during the first 6 months of 2025, continued to place more tonnage on time-charter contracts to adhere to the long-term needs of its clients. As a result, during the first 6 months of 2025, TEN secured charters, including those with proper [ term ] provisions increased by about 14%, while spot contracts experienced a marked decline by about 27%. A point of note, however, is the company's continued belief in the market, which despite TEN's limited exposure in the inherent volatile spot market, which has happened somewhat from prior periods of the recent past has increased its presence in profit sharing contracts by about 28% from the 2024 1st half in order to capture the upside on are expected to provide starting with the upcoming winter months. In addition, during the first 6 months of 2025, 5 vessels underwent scheduled dry dockings from 8 in the same period of 2024, which when combined with the shift in employment patterns explained above, resulted in an increase of fleet utilization from 91.9% in the first half of 2024 to 96.9% in the first half of 2025. As a result, TEN's 62 vessels in the water fleet generated $390 million of gross revenues during the first half of 2025 from $415 million in the spot heavy 2024 first half, averaging a healthy $30,754 per ship per day. The aforementioned shift in employment patterns led to a material reduction in voyage expenses from $83.4 million in the first half of 2024 to about $68 million in the 2025 first 6 month, a $15.5 million reduction. In a similar…

Thank you, Harrys, for your detailed analysis. And with this, we would like to open the floor for any questions or input that you may have. Thank you.

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] My first question comes from Poe Fratt with Alliance Global Partners.

Can we talk about the new build orders for the VLCCs? As you mentioned on the last quarterly call, you previewed -- it seemed to preview that. Can you talk about how you decided to go forward with new builds versus acquiring assets in the open market?

Yes. Thank you. Well, we are always looking for good quality vessels in the open market also. So I mean, we do not exclude this to happen. We took advantage of the strong secondhand market to sell vessels -- so perhaps it is -- when it's a good time to sell vessels and we made a significant cash profit and the profit overall on the sale of 18-year-old vessels, it means that it's not perhaps the best time to acquire secondhand vessels because they are pricey. So I believe that it's very, very good for us. We are very competent and experienced new building site offices in Korea and Japan in the past. So it has been -- it makes much more sense since we are building a big number of vessels in the first class Korean yards with the site officer to build the environmentally friendly vessels of the future. that are actually following all the upcoming regulations, and they are built at the yards to traditional build ships. So I think VLCCs has been part of our portfolio that we are lagging behind. And I think that's a very good opportunity to find -- we believe the reason we are able to run ships at, I would say, significantly lower operating expenses than a big part of our peer group is because we tend to build good quality ships and sister vessels, and that helps us very, very much in keeping operating expenses and the experience of our seafarers, the crew and the captains. It's like running, let's say, a very similar fleet of airplanes or a very similar fleet of Boeings or -- in order for -- to have the training for the crew, the spare parts for all the vessels, and it gives us a lot of flexibility.

Great. And then if you could clarify whether you exercise the option that you had when you first announced the VLCC new builds? And then secondly, typically, you -- when you have a newbuild, you typically have a contract or a time charter set up in advance of delivery. Do you currently have a time charter in place? Or when do you anticipate securing a time charter for the Vs?

Yes. I think what we did is we opted for the option and we actually got an extra option for another couple of months. because we believe that it's good to maintain this price levels going forward in a very uncertain environment. So the options are always valuable. So actually, yes, we have 3 foreign vessels right now, plus an additional option in the same yard in the same quality. The -- right now, the VLCC market is a very hot market. We have actually 3 of our existing VLs are opening in the next 6 months, and we see a lot of appetite. I mean we're in the process of renewing some of the existing VLs going forward with significant increased base rates and profit sharing arrangements. And the new orders,, we are -- there is a lot of appetite, but it's still early to make a decision. So we will be taking care of more of the 3 existing ships, very young ship also themselves. But it gives us with 6 VLs and perhaps more coming it's starting to get critical mass in that very I would say, interesting segment of the tanker market.

Great. And then could you preview -- I know that you talked about declaring the second half dividend in the November time frame. Can you preview it at this point in time? Or is it just too early?

Well, I think it is early, but we are looking at a healthy market. So we are expecting to -- for the Board to opt for a healthy dividend. So I think we are in a good space, I would say.

Okay. And then on the last call, you talked about potentially given the current valuation in the equity market, you talked about potentially restructuring the company or looking at alternatives maybe splitting the company into a company that has twofold: 1 with long-term time charters in place, especially on the -- when you look at the shuttle tankers versus assets that have shorter-term time charters. Any progress or any comments on that type of move?

First of all, we are not restructuring the company. We have never restructured any part of our debt or the company. So I think TEN is one of the few companies that, I'm just joking, but we're not restructure. We're always thinking out of the box. I think we are very -- we are very happy to where we are today with the growth of the company, with the profitability of the company. One thing that I would say, like other shipping companies, but especially ourselves, we are disappointed is with share performance, and we're trying to -- I think our company should be -- should have easy the market cap of $2 billion from where it is today. But -- so we're always thinking of ways to get shareholders' interest and appreciation. We are -- I think we are going through a period that, with inflation being around, we are going through a period where real assets matter. So I think this is -- and we have very, very, very real assets and quite undervalued real assets. So I think what we want to do is to be able to have a much more efficient -- to make it more efficient for our shareholders. So we have thought of perhaps having one of the largest tanker fleets plus a lot of long-term business and specialized vessels to do something down the road in the next 8 quarters, I would say, and perhaps putting the more specialized vessels in a vehicle that, of course, TEN will be by far the major shareholder. But I guess, these are ideas that we are discussing with our investment bankers, but there's nothing imminent, I would say, for the next 4 quarters.

Okay. And then could you preview or give me an idea of sort of the direction of OpEx and G&A over the second half of the year. It looks like the first half G&A especially might have had some onetime items in it.

Yes. Well, I think we are putting a lot of emphasis, we are running things hands on and we look at our technical management -- managers almost on a weekly and monthly performance. We are facing some inflation issues, but I think we have been able to cap the majority, and we still have an average for such big diversified fleet, which includes DP vessels, which the operating expense of those ships are in the high teens. And we're still under $10,000 on operating expenses. So I think we put a lot of emphasis in running a tight ship literally. I believe that we will be able to maintain the expenses there.

There are no further questions at this time. At this point, I'd like to turn the call back over to Mr. Tsakos for closing comments.

Well, again, thank you for attending our call. In the first 6 months and I think moving forward has been an exciting time for the energy markets. I believe that we are here to see even more solid results coming forward. The energy part of the world economy is becoming more and more important. The players right now are getting more. We're seeing shipping energy part of the business, where really you have a 2-tier market. You have vessels and they're growing in numbers that are, I would say, they do not serve the core part of the business. And this which allows us with modern high-specification vessels to be able to have more opportunities in order to serve our major clients. So I believe I am optimistic that we're going to be seeing at least in the near future, another 18 months over a very solid, perhaps getting even stronger market. And we see also actions from the administration in the United States to support shipping, which is important because shipping and energy transportation have always been in the background. I mean, we provide a significant service, a very big service for the world economy. But in a way, we are kind of the unsung sailors, not heroes, the unsung sailors of the world economy. And I don't think it's good to see that people are paying much more attention to actual the services we're doing, be it on the LNG, be it on the crude or on the product segment. I will be in the United States in the next couple of weeks, having meetings specifically on ways where simple transportation and especially energy transportation is going to be appreciated and more and assisted more. And I think we have -- it is going to be good for the charterers and the ship owners. So I think we have an optimistic view going forward. And with that, I would like to thank everybody. Ask Mr. Arapoglou, our Chairman, if he wants to have a closing statement.

Thank you, Nikos. Just to say that we believe that market does not -- continues not to appreciate the nearly $4 billion of minimum contracted revenue for TEN. and keeps looking at us like any other shipping company with high volatility and low predictability of income and revenues. We feel that perhaps the market has begun focusing on it, but we feel that the value of the stock is much higher than where it is today. And as far as dividend is concerned, the CEO just mentioned that the Board is going to look at the results of the third quarter and be able to perhaps announce -- make a decision on the dividend in a few months' time. So we continue to be very positive on that front. So with that, thank you very much. Thank you, Niko.

Thank you. And I think we are -- we will be -- I think the team will be attending events in London, on for London International Shipping Week, including capital league event where our CFO is going to be a speaker and the following week in New York. So hope to see you face-to-face. And thank you very much, and have a good rest of the day.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.