Tsakos Energy Navigation Limited reports results for 2006
Net income was $196.4 million for 2006 as compared with $161.8 million for 2005. Basic earnings per share based on average number of shares outstanding rose to $10.30 versus earnings per share of $8.18 in 2005. Net revenues (voyage revenues net of commissions and voyage expenses) were $343.15 million in 2006 as compared with $248.05 million in 2005. Income before depreciation was $255.46 million in 2006 against $197.45 million a year earlier.
Revenues from voyages were 45% higher than the prior year, while the average number of vessels increased from 26.1 in 2005 to 33.8 in 2006. The average rates earned per vessel also increased despite the softer market compared to the prior year. More specifically Suezmax, Aframax and Handysize product carrier rates achieved by our vessels rose, more than offsetting the slight drop in VLCC and Panamax rates. A change in chartering policy towards fixed employment with guaranteed minimum and profit sharing agreement in the upside of the market enabled the company to exploit the higher rates of the spot market while ensuring continuous employment and guaranteed rates on the downside. In 2006, 54% of total operating days were under time charter with either a fixed rate or profit sharing, compared to 62% in 2005. However, the number of days employed on time charter with profit sharing actually doubled between 2005 and 2006. Average TCE rates (voyage revenues less voyage expenses) rose from $28,645 per day in 2005 to $30,154 per day in 2006. Utilization of the fleet was 97.4% in 2006 compared with 96.5% in the prior year, due to lower dry-docking activity in 2006.
Operating expenses per vessel per day increased by 7% from $6,534 to $6,979 mainly reflecting, increases in lubricant prices, insurance premiums and some further weakness of the Dollar against the Euro compared to 2005. However, overhead expenses dropped by 5% from $1,217 per vessel per day in 2005 to $1,162 in 2006 due to economies of scale, the direct result of a larger fleet.
Interest and finance costs increased from $11.2 million in 2005 to $42.5 million in 2006 due to the increase in amount of loans to partly finance the new vessels delivered, as well as the increase of average interest rates by over 1%.
Capital gains from vessel sales, including the sale of the minority interest in two Panamaxes to FLOPEC of Ecuador, increased from $45.3 million in 2005 to $63.3 million in 2006, a 39.8% increase, reflecting the Company's policy to actively participate in the sale & purchase market when lucrative opportunities arise.
Revenues from voyages were 45% higher than the prior year, while the average number of vessels increased from 26.1 in 2005 to 33.8 in 2006. The average rates earned per vessel also increased despite the softer market compared to the prior year. More specifically Suezmax, Aframax and Handysize product carrier rates achieved by our vessels rose, more than offsetting the slight drop in VLCC and Panamax rates. A change in chartering policy towards fixed employment with guaranteed minimum and profit sharing agreement in the upside of the market enabled the company to exploit the higher rates of the spot market while ensuring continuous employment and guaranteed rates on the downside. In 2006, 54% of total operating days were under time charter with either a fixed rate or profit sharing, compared to 62% in 2005. However, the number of days employed on time charter with profit sharing actually doubled between 2005 and 2006. Average TCE rates (voyage revenues less voyage expenses) rose from $28,645 per day in 2005 to $30,154 per day in 2006. Utilization of the fleet was 97.4% in 2006 compared with 96.5% in the prior year, due to lower dry-docking activity in 2006.
Operating expenses per vessel per day increased by 7% from $6,534 to $6,979 mainly reflecting, increases in lubricant prices, insurance premiums and some further weakness of the Dollar against the Euro compared to 2005. However, overhead expenses dropped by 5% from $1,217 per vessel per day in 2005 to $1,162 in 2006 due to economies of scale, the direct result of a larger fleet.
Interest and finance costs increased from $11.2 million in 2005 to $42.5 million in 2006 due to the increase in amount of loans to partly finance the new vessels delivered, as well as the increase of average interest rates by over 1%.
Capital gains from vessel sales, including the sale of the minority interest in two Panamaxes to FLOPEC of Ecuador, increased from $45.3 million in 2005 to $63.3 million in 2006, a 39.8% increase, reflecting the Company's policy to actively participate in the sale & purchase market when lucrative opportunities arise.
