The 1999 profits include a gain from vessel sale of $0.98 million. This sale resulted in improved liquidity and a strengthened balance sheet arising from a reduction of debt. MIF has retained commercial control of the vessel through a long-term charter-in agreement. The fleet of sixteen tankers is comprised of one VLCC, seven Aframaxes, and eight products carriers. The fleet with DWT of over 1,420,000 had a year-end average tonnage age of 7.1 years.
As is well known, the economic and operating environment of the tanker industry during 1999 was most negative. Freight rates were severely depressed, reflecting the sharp contraction in petroleum shipments. Conversely, operating costs were pressured by the sharp hike in bunkers prices. Interest rates were on the rise throughout 1999. Against this backdrop, MIF is pleased that it was able to sustain a profitable year, albeit at a somewhat reduced level when compared with 1998.
The prospects for the tanker market remain highly uncertain. Early months of the year 2000 have produced some relief from the depressed conditions of 1999. However, it is too early to assume that petroleum shipments will return to normalcy. Future OPEC decisions and the pace of inventories replenishment will be key determinants. Other factors weighing heavily on future results include elevated costs of bunkers and rising operating costs combined with the prospect of even higher interest rates.
MIF enjoys two key strategic strengths. These are a young, modern fleet as well as disciplined expense management. These characteristics enable Management to concentrate on longer-term employment opportunities with first-rate charterers. A number of such charters expired during 1999 and at year end only 9 of the vessels were operating with contracted employment through the end of 2000 or beyond. Consistent with MIF's policy, Management is actively pursuing opportunities for longer-term contracts with acceptable rates and conditions. MIF is a low-cost provider of quality service. The present environment demands this skill and discipline. The MIF fleet, supported by the benefits of its commercial and technical managers, Tsakos Shipping and Trading S.A., has been successful in containing costs within a mandate of providing consistent, safe, reliable quality service and efficient preventive maintenance of its vessels.