TEN reported results (unaudited) for the third quarter and nine months ended September 30, 2021.
Q3 2021 SUMMARY RESULTS
In what has been described as one of the worst tanker market in 30 years, TEN generated positive cash flow and adjusted EBIDTA of $19.5 million for the third quarter.
Voyage revenues totaled $131.6 million with utilization at about 90%, as nine vessel surveys were brought forward and took place during the 2021 third quarter. Non-cash items of $36.4 million, contributed to a third quarter net loss of $25.0 million.
Total operating expenses, due to stringent controls, fell by 9%. This led to a daily opex per vessel dropping by about $600 to $7,332.
The drastic reduction of $115.0 million of our total debt since the end of 2020, positive bunker hedge valuations, cash gains and decreases in interest margins on certain loans that were refinanced at attractive terms, resulted in lowering finance costs by 40%, to $8.2 million.
NINE MONTHS 2021 SUMMARY RESULTS
In a severe market environment, caused by the commercial and operational burdens of the pandemic, TEN reported positive cash flow and adjusted EBIDTA of $86.3 million. The inclusion of non-cash items of $113.0 million contributed to a net loss of $49.5 million. TEN, due its balanced employment policy, generated $407.0 million in gross revenues in a market that continued to be soft and only recently has shown signs of recovery, starting from LNG and product carriers.
Fleet utilization was at about 91% in the 2021 nine months, a relatively low level, after taking into account the 17 vessels that went through dry docking at various stages during the period, with some earlier than scheduled for tactical employment policy reasons. As a result, average TCE per ship per day for the first nine months of 2021 amounted to $17,089, a still satisfactory level given the demanding market conditions encountered.
Finance costs fell by 63% to $22.8 million, due to lower loan interest rate margins and positive bunker hedging movements. Also, during the 2021 nine-month period, outstanding debt was reduced by $115.0 million, further lowering related interest payments whilst maintaining solid cash reserves.
During the 2021 nine months, the Company disposed of three vessels for $53.2 million which released $21 million of free cash after repayment of related debt. These sales incurred a non-cash loss of $5.8 million.
TEN has secured time charter contracts with an average of three years for 10 of its vessels, including four dual-fuel LNG powered Aframax crude carrier newbuildings, which together with the LNG newbuilding to be delivered in January 2022 and the Aframax DP2 Shuttle Tanker scheduled for delivery in the second quarter of 2022, are expected to generate, going forward, minimum gross revenues of about $500 million.
The Company’s ATM program for both preferred and common shares was $14.4 million during the third quarter of 2021 and $31.9 million thereafter. As of today, there are outstanding 22,996,795 common shares and 15,001,863 publicly traded preferred shares.
STRATEGY & OUTLOOK
TEN has steadily and successfully navigated the recent rough seas caused by the pandemic. The Company’s long-term balanced employment strategy, however, provides for a solid income base in difficult times and allows for significant upside when markets allow.
In the recent quarter, a number of our industry’s sectors have significantly improved and we are enjoying unprecedented rates in LNG and product carriers with other segments also showing signs of recovery.
Following our tried and tested strategy, we have secured fixed profit-sharing arrangements in recent weeks for more than ten of our vessels to major oil concerns. In addition we are further expanding our environmental fleet with the addition of up to six aframax duel-fuel LNG powered tankers, chartered to a major oil concern.
Our newest LNG carrier will enter the market in about three weeks, and will be significantly contributing to our bottom line in this very profitable segment, earning six figure rates currently. In addition, we are carefully planning the future with investments in new technology and renewables.
We believe that the signs of a further recovery in the energy transportation rates are evident, and TEN is well placed to reap the rewards.
The management would like to thank all our seafarers and onshore personnel who have so patiently and courageously weathered the storm.