(By Kevin Donovan) Turning a supertanker around can take a while, so getting paid for waiting can help pass the time. A shipping company based in Greece (yes, the same country that's making the Eurozone sweat) ponies up a healthy dividend and a record of paying.
At the recent share price of $5.44, Athens-based Tsakos Energy Navigation Ltd. (TNP) offers a yield north of 11%. Of course, there's no guarantee the dividend will be maintained, particularly if the global economic slowdown curtails oil consumption and hurts day rates for tankers, but Tsakos has paid a dividend since its listing on the New York Stock Exchange in 2002.
And CEO Nikolas P. Tsakos said in a statement accompanying first-quarter results that "cash preservation, dividends and opportunistic acquisitions remain a core in our strategy going forward." We take him at his word, particularly given that insider ownership of the company is more than 35%, aligning management's interests with shareholders'.
Tsakos together with its subsidiaries provides seaborne crude oil and petroleum product transportation services worldwide. The company offers marine transportation services for national and independent oil companies and refiners under long, medium, and short-term charters. As of March 16, 2012, its fleet consisted of 50 vessels.
In the first quarter of 2012, the company broke a streak of negative surprises, reporting a loss of $0.19 per share vs. analysts' mean expectation of a $0.23 loss.
Operating income, however, remained positive, with Tsakos logging $26.2 million in EBITDA on voyage revenue of $102.2 million. Liquidity was boosted as cash and liquid investments rose to $193 million, up $9 million from the year.
To fund growth, the company concluded a follow-on public equity offering of 10 million common shares in April that raised $62.7 million. The proceeds will be used primarily to fund growth initiatives, primarily in the liquefied natural gas sector.
Fleet utilization was 96.7%, which Tsakos considers extraordinary given the soft market. Revenues net of commissions and voyage expenses amounted to $66.2 million in the first quarter, a 7% improvement over the fourth quarter of 2011.
The average daily time charter equivalent (TCE) rate (voyage revenue less voyage expenses) was $17,129, up about 9.0% over the fourth quarter of 2011 due primarily to regional spikes in aframax freight rates and some increase in product carrier rates. All the vessels generated positive EBITDA in the first quarter of 2012 with the exception of the LNG carrier which was in dry dock and the two VLCCs which are held for sale.
Total operating expenses amounted to $35.5 million in the first quarter of 2012, higher than normal due to dry-dockings in which additional non-deferrable expenditure was incurred, the company said. Tsakos expects operating expenses will return to levels more in line with the 2011 average as dry-dockings abate and the dollar strengthens against the Euro.
Analysts expect Tsakos to return to accounting profitability in 2013 with a mean estimate of $0.10 per share. In the meantime, we look forward to getting paid to wait.