TEN, Ltd. (TEN) reports results (unaudited) for the fourth quarter and the year ended December 31, 2020.
FINANCIAL RESULTS FOR THE YEAR 2020
In 2020, TEN earned a net income of $59.2 million before non-cash charges of $35.2 million, compared to $42.7 million net income in 2019 excluding non-cash impairment charge of $27.6 million, a $16.5 million improvement on a year-to-year basis.
Voyage revenues rose to $644.1 million, a $46.7 million increase over 2019, despite the materially reduced global oil demand the pandemic created for most of 2020. In addition, and in view of this lackluster freight environment, TEN advanced nine of its vessels through their obligatory dry-dockings, so as to have them available for healthier charters once the markets rebound. Moreover, the Company is maintaining a significantly higher number of vessels in the spot market, compared to 2019, pending time charter rates to reflect the global economic turnaround a post-Covid-19 environment is expected to create. We are beginning to see signs of that forming in the first quarter and the Company is already taking advantage of that eventuality.
With still many vessels in the fleet operating in attractive time-charters, TEN managed a 94.2% utilization and an average daily TCE per vessel of $23,638 in 2020, an 11% improvement over the previous year. (Total revenues included a significant contribution from the two LNG carriers of $42.1 million.)
TEN achieved operating income of $96.7 million in 2020, compared to $85.9 million in 2019, a 12.6% increase, despite the turbulence the pandemic created to world economies.
Adjusted EBITDA increased to $267 million, $10.0 million higher than in 2019. The Company had a comfortable $172 million cash surplus at year-end after having redeemed all $50 million worth of Series C perpetual preferred stock, in similar fashion with the $50 million Series B perpetual preferred stock redemption a year earlier. A total $100 million preferred shares redemptions, from cash at hand, in a space of about 14 months, in addition to $161 million of scheduled debt repayments in 2020.
Voyage expenses were controlled to $145.3 million in 2020, despite the increased spot vessel activity.
Operating expenses decreased to $179.2 million from the 2019 level, despite a higher number of vessels in operation in 2020. On a daily average per vessel basis, operating expenses were $7,821 per day across our diversified fleet.
Total debt fell by a net $34.8 million despite raising $137 million of new loans, including predelivery financing, at competitive terms, relating to the delivery of our new buildings and our vessels under construction. We also took advantage of low interest rates to refinance loans at considerably better terms, resulting in an extra $43.4 million of cash being made available.
Interest and Finance costs in 2020 were down by $4.1 million from the 2019 level to $70.6 million due to a reduction in spreads and lower margins through various refinancing’s.
FOURTH QUARTER 2020 RESULTS
In the fourth quarter of 2020, the full impact of the economic lockdown was evident in the tanker rates. In view of the above, the Company brought forward the dry-docking of five vessels, originally scheduled for 2021, into the fourth quarter. Despite the weak market, the impact was mitigated by revenues generated by our vessels on fixed-time charter contracts, which allowed the Company to reach revenues of $131.6 million, an EBIDTA of $32.5 million, resulting to a net loss of $11.4 million before non-cash charges.
Total operating costs remained at the same level as the 2019 fourth quarter at $45.7 million, although five of our vessels underwent their scheduled drydocking in the fourth quarter of 2020, compared to only one vessel for the same period of 2019. Daily average operating costs per vessel increased by only $185 per day, due to the valued efforts of our technical managers who had also to adjust to the harsh conditions of the Covid-19 implications, relating to crew safety and repatriation expenses that had become very challenging in today’s environment.
G&A expenses remained the same at $7.2 million, and depreciation and amortization were slightly lower at $34.6 million due to vessels sold in the prior 2020 quarters.
Finance costs were at $9.2 million, down by $4.5 million from the 2019 fourth quarter due to reduced outstanding debt, lower interest rates and positive bunker hedge valuations.
Management remains confident, along with most of our peers, that the tight fundamentals relating to vessel supply, oil demand, oil production and inventories have started to re-align, resulting in stronger rates going forward. In quarter four, the Company successfully completed its four-vessel new building program to a renowned oil major with the delivery of two eco-designed Suezmax vessels, with a maximum of 10 years employment.
Dividend – Common Shares
The Company will pay a dividend of $0.10 per common share in June 2021. Inclusive of this payment, TEN has returned to common shareholders close to $500 million in total dividends since its listing on the NYSE in 2002.
