Tsakos Energy Navigation Ltd. (TNP), an owner of a fleet of tankers, reported Monday a sharp decline in first-quarter profit, reflecting a decrease in voyage revenues and the absence of a capital gain recognized a year ago.
For the first quarter, net income dropped to $24.45 million or $0.66 per share from $65.13 million or $1.70 per share in the previous year. The results of the prior year included a capital gain of $34.57 million from the sale of Aframax Olympia in last year's first quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share in the first quarter. Analysts' estimates typically exclude special items.
Voyage revenues for the quarter decreased to $126.3 million from $136.7 million. Net of voyage expenses and commissions, revenue dipped to $106.14 million from $115.67 million. Five analysts were expecting revenue of $111.13 million in the first quarter.
Average number of vessels deployed increased to 46 from 43.1 in the same period last year. The average daily time charter equivalent rate, which is daily voyage revenue minus voyage expenses, came down to $27,495 from $31,387 last year.
Vessel operating expenses per ship per day rose year-over-year to $9,355 from $8,969, mainly because of higher insurance premiums and increase in repair costs. Depreciation and dry-docking amortization costs increased to $24.79 million from $21.98 million, reflecting the fleet expansion since a year ago.
Interest and finance costs decreased to $15.11 million from $23.84 million, partly resulting from decline in interest rates and partly from non-cash positive valuations on non-hedging interest rate and bunker swaps of $2.07 million, compared to negative valuations of $6.61 million in the prior-year quarter.
Looking ahead, for the rest of the year, the company expects 66% of the fleet under secured employment to generate at least $209 million in gross revenues. For 2010, 45% of available days have been fixed, which are expected to provide Tsakos with an additional $176 million in minimum gross revenues.
The company also said that it would go on with a dry-docking realignment schedule to benefit from a probable market turnaround following economic recovery in early 2010. Of the 11 vessels scheduled to enter dry-dock in 2010, five have been moved forward to 2009, which would render more operating days available in 2010 to benefit from improvements in the rate environment in that year.
TNP is currently trading at $20.94, up $1.13 or 5.70%, on the NYSE.
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