TEN Ltd. Reports $140 Million In First Quarter Revenues And Positive Operating Income In A Challenging Market
TEN, Ltd. reported results (unaudited) for the quarter ended March 31, 2021.
Q1 2021 SUMMARY RESULTS
In the first quarter of 2021, under the challenging backdrop of the pandemic that affected tanker rates, TEN generated gross revenues of about $140 million and operating income of $2.2 million.
Management took advantage of this low-rate period to bring forward a number of scheduled dry-dockings in order to have a bigger pool of vessels available to achieve higher rates once markets rebound. As a result, TEN incurred modest net losses of $4.8 million in this challenging market.
During this time, revenue generated from time-charter contracts was again sufficient to cover the Company’s cash expenses (opex, overheads, charter-in and loan interest), a cornerstone of TEN’s chartering strategy.
Fleet utilization at a healthy 92% despite the heavy dry-docking schedule in the first quarter of 2021.
The daily average TCE per vessel was $18,121 during the 2021 first quarter, comfortably above our fleet daily average breakeven and comparing favorably to market rates. Adjusted EBITDA for the first quarter of 2021 amounted to $37.3 million.
Thanks to tight controls, average vessel daily operating expenses fell by 6% to $7,426 from $7,886, despite dry-docking expenses and costs related to travel difficulties incurred by crew due to Covid related restrictions, and the weakening US dollar.
Interest and finance costs were reduced as a result of debt reduction and lower margins on new loans or existing loans that were refinanced at more attractive rates and a $5 million positive move in bunker hedge valuations.
General and administrative expenses together with management fees were almost unchanged from the 2020 first quarter.
Depreciation and amortization combined remained at approximately $35.0 million.
By the end of the first quarter of 2021, TEN’s net debt to capital was at 50%.
RECENT EVENTS AND OTHER
In the first half of 2021, TEN successfully chartered all three of its LNG carriers to significant gas concerns with a duration ranging from twelve months to five years. The new charters will result to an additional $50 million in minimum annual revenues.
In May and June 2021, the Company sold three of its vessels, a 2003-built panamax product tanker and two 2005-built suezmaxes, and generated free cash, in excess of $20.5 million, after the repayment of related debt amounting to $32.3 million.
The Company’s fleet renewal program continues to be on target, regardless of the obstacles imposed by Covid-19 with our LNG “TENERGY” and DP2 shuttle tanker “PORTO”, to be delivered by South Korean yards.
DIVIDEND – COMMON SHARES
The Company will pay a dividend of $0.10 per common share on July 20, 2021, to shareholders of record as of July 14, 2021. Inclusive of this payment, TEN has paid common shareholders approximately half a billion dollars in dividends, equating to about $26 million per annum since its listing on the NYSE in 2002.
The Company’s ATM program for preferred and common shares has netted $18.5 million.
The Company remains committed and at the forefront of structural, technical and environmental changes that our industry is facing, similar to actions taken following the OPA90 legislation, management is closely monitoring the changes of vessel hull and combustion through our Environment and Operations Committee and in close co-operation with our top clients. As TEN has proved over the recent past, fleet renewal remains high on its agenda.
In the meantime, the company is well positioned for the expected upturn in tanker market rates. The preservation of healthy cash reserves and debt reduction will be the principal drivers in safeguarding the Company’s balance sheet going forward.
“TEN is preparing itself for the rebound, expected to be similar to the one in the container and dry cargo markets. In the meantime, management is planning accretive long-term moves that will propel the Company into a new phase of development” Mr. George Saroglou, COO of TEN commented.
Source: TEN Ltd.