Nordic American Tankers' 2Q2012 Report. Dividend Maintained and Paid for the 60th Consecutive Quarter. The Fleet is in Excellent Technical Condition.
(Thomson Reuters ONE) -
Link to the complete 2Q12 dividend report:
http://hugin.info/201/R/1632217/523496.pdf
Hamilton, Bermuda, August 7, 2012
Nordic American Tankers Limited ("NAT" or "the Company") today announced that it
has declared a dividend of $0.30 per share for 2Q2012. Operating cashflow[1] (a
non-GAAP measure) was $10.3m for 2Q2012 - a slight decrease from $11.4m in
1Q2012. The dividend of $0.30 per share matches the dividend paid in each of the
past four quarters and is paid from cash on hand. Earnings per share (EPS)
improved in 2Q2012 compared with 1Q2012 and 2Q2011.
The Company is in a strong financial position and should be differentiated from
shipping companies with weak balance sheets. The fleet of NAT is on a regular
basis chartered to major oil companies that require the highest technical
standard. In the present environment, customers increasingly focus on financial
solidity. The shipping company must be in a solid financial position in order to
afford to keep technical standards at the highest level, also in a weak earnings
market. Therefore, NAT's strong financial position is a distinct competitive
advantage.
The relative position of NAT has continued to improve over the recent past.
It is a strength that the Company pays dividend also in a soft market
environment. A turn in the market can be expected to translate into higher
dividends.
The Company will pay the dividend on or about August 30, 2012 to shareholders of
record as of August 17, 2012. Starting in the fall of 1997, when NAT began its
operations, the Company has paid a quarterly dividend for 60 consecutive
quarters. Including the dividend payment in 2Q2012, the total dividend payments
over this period amount to $43.64 per share.
During the fourth quarter of 2010, our operating fleet stood at 15 vessels.
During the second quarter of 2012, the Company had 20 trading vessels. Our
increased fleet has substantially bolstered our earnings and dividend capacity
going forward.
Key points to consider:
* Earnings per share in 2Q2012 was -$0.15, compared with -$0.18 in 1Q2012 and
-$0.21 in 2Q2011.
* The establishment of the Orion Tanker Pool has resulted in important cost
savings, a closer relationship with customers and an improved utilization of
the fleet particular in a weak market.
* Net voyage revenue per vessel per day achieved in the spot market in 2Q2012
was about $16,200 compared to $17,500 per vessel per day in 1Q2012.
* We continue to focus on cost efficiency - both in administration and onboard
our vessels.
* "Financial Vetting" has become an increasingly relevant dimension in the
tanker industry, as focus by charterers is now also on the financial health
of ship owners.
* The Company does not engage in any type of derivatives.
* Economic development in Asia remains stable while Europe is down and the
growth in the US is still sluggish.
"The Nordic American System"
Nordic American has an operating model that is sustainable in both a weak and a
strong tanker market, which we believe differentiates Nordic American from other
publicly traded tanker companies. The Nordic American System is transparent and
predictable. As a general policy, the Company has a conservative risk profile.
Our dividend payments are important for our shareholders.
NAT maximizes cash flows by employing all of its vessels in the spot market
through Orion Tanker Pool which increases the efficiency and utilization of the
fleet.
Growth is a central element of the Nordic American System. It is essential that
NAT grows accretively, which means that over time our transportation capacity
increases more percentagewise than our share count.
Nordic American has one type of vessel only - the Suezmax vessel. This type of
vessel can carry one million barrels of oil. The Suezmax vessel is highly
versatile, able to be utilized on most long-haul trade routes. A homogenous
fleet streamlines operating and administration costs, which helps keep our cash-
breakeven point low.
As a general guideline, we pay our dividend from cash on hand. NAT has a cash
break-even level of about $11,000 per day per vessel which we consider low in
the industry. The cash break-even rate is the amount of average daily revenue
our vessels would need to earn in the spot tanker market in order to cover our
vessel operating expenses, cash general and administrative expenses, interest
expense and other financial charges.
Financial Information
The Board has declared a dividend of $0.30 per share for 2Q2012 to shareholders
of record as of August 17, 2012 which is the same as for the last four quarters
up to and including 2Q2012. The dividend will be paid on or about August
30, 2012. The number of shares outstanding is 52,915,639.
Earnings per share in 2Q2012 were -$0.15 per share compared to -$0.18 per share
in 1Q2012. The Company's operating cash flow was $10.3m for 2Q2012, compared
with $11.4m for 1Q2012.
Cash earnings per share were $0.18 in 2Q2012, $0.22 in 1Q2012 and $0.15 in
2Q2011.
We continue to concentrate on keeping our vessel operating costs low, while
always maintaining our strong commitment to safe vessel operations. We pay
special attention to the cost synergies of operating a homogenous fleet that
consists only of double hull Suezmax tankers. As we expand our fleet, we do not
anticipate that our administrative costs will rise correspondingly. In a weak
tanker market other tanker companies may have challenges in keeping up technical
standards as they cannot afford to spend the required funds for operations and
maintenance.
As a matter of policy, the Company continues to keep a strong balance sheet with
little net debt and a strong focus on limiting the Company's financial risk.
The Company is in a good position to take advantage of possible strong shipping
markets, which will quickly translate into increased dividend payouts.
The establishment of the Orion Pool has resulted in a closer relationship with
customers and a stronger position in the market place. Orion has recently
concluded a commercial frame agreement with a subsidiary of ExxonMobil
Corporation that focuses on transportation of crude oil in the Atlantic Basin as
well as other places of the world. This agreement helps us secure better access
to cargoes than otherwise would have been the case. The establishment of Orion
has produced administrative cost savings and improved penetration of the market.
Prices for newbuildings and second hand tankers continue to be weak and we are
in a good position to buy additional vessels at advantageous prices when the
time is right. Such acquisitions would increase the dividend capacity of the
Company. It is a prerequisite for any expansion of the fleet that our dividend
and earnings capacity per share increase. During the first half of 2012 we have
continued to inspect several vessels for possible acquisition purposes.
Our primary objective is to enhance total return[2] for our shareholders,
including maximizing our quarterly dividend.
As of June 30, 2012, the Company has net debt of about $5.0m per vessel. In
addition, the Company has in place a revolving credit facility of $500m, of
which $250m has been drawn at this time. Cash on hand is $104.3m.
The credit facility, which matures in September 2013, is not subject to
reduction by the lenders and there is no obligation to repay principal during
the term of the facility. The Company pays interest only on drawn amounts and a
commitment fee for undrawn amounts. This means that our cash breakeven rate of
about $11,000 per day per vessel is significantly lower than that of companies
with a high leverage. Work has commenced to have the term of the facility
extended. We believe the Company is an attractive borrower in the eyes of the
banks.
The tightened terms of commercial bank financing and higher margins on shipping
loans are challenging for shipping companies that are highly leveraged. By
having little net debt, NAT is better positioned to navigate the financial seas,
and we believe this is in the best interests of our shareholders.
For further details on our financial position for 2Q2012, 1Q2012 and 2Q2011,
please see later in this release.
The Fleet
The Company has a fleet of 20 vessels at the time of this report. By way of
comparison, in the autumn of 2004, the Company had three vessels; at the end of
2005 the Company had eight vessels; and at the end of 2006 the Company had 12
vessels. At the end of 2009 and 2010 we had 15 vessels in operation. Please see
the fleet list below. We expect that the expansion process will continue over
time and that more vessels will be added to our fleet. Our vessels are employed
in the spot market. The average age of our fleet is 10.6 years. Our vessels are
in excellent technical condition.
Vessel Dwt Vessel Dwt
Nordic Apollo 159,999 Nordic Hunter 151,400
Nordic Aurora 147,262 Nordic Jupiter 157,411
Nordic Breeze 158,597 Nordic Mistral 164,236
Nordic Cosmos 159,998 Nordic Moon 159,999
Nordic Discovery 153,328 Nordic Passat 164,274
Nordic Fighter 153,328 Nordic Saturn 157,332
Nordic Freedom 163,455 Nordic Sprite 147,188
Nordic Grace 149,921 Nordic Vega 163,000
Nordic Harrier 151,475 Nordic Voyager 149,591
Nordic Hawk 151,475 Nordic Zenith 158,645
Total dwt 3,121,914
The Nordic Harrier (previously named Gulf Scandic) was redelivered to us in
October 2010. The vessel had been operated by the charterers since the autumn of
2004. The vessel had not been technically operated according to sound
maintenance practices by the charterer, and its condition on redelivery to us
was far below the contractual obligations. Therefore, NAT has a claim against
the charterer for drydocking and other costs that the charterer is obligated to
cover under the bareboat charter. We have not been able to reach an agreement
with Gulf Navigation and the matter is now in arbitration.
The Company is taking a proactive approach in reducing the energy consumption of
our fleet. We have previously installed Alpha Lubricators on all our vessels,
resulting in important cost savings. In addition we are installing sliding
valves on the main engines across the fleet, to be completed in the next few
months. This allows our vessels to safely slow steam whenever possible in order
to reduce the fuel consumption. We are currently in the process of testing other
fuel saving measures and expect to implement those measures having demonstrable
gains in efficiency. In the present tanker market environment with a surplus of
vessels, we believe that overhauling the current fleet at a modest cost is
preferred solution compared to ordering new "Eco-design" ships.
The graph shows the development of bunker prices in $/ton. Based on a daily
bunker consumption of 50 tons, a fall in bunker prices of $100/ton represents a
$5,000 per day saving per vessel. The quantity and the cost of bunkers consumed
are important factors for establishing the time charter equivalent (TCE). A
quarter may not be long enough to measure the TCE performance.
Link to the graph: http://hugin.info/201/R/1632217/523496.pdf
We continue to keep high technical quality of our fleet. Total off hire (out of
service) for 2Q2012 was 58 days for our fleet of which 39 days were planned off
hire. Two of our vessels have been in drydock in 2Q2012 and we expect 4 vessels
to be drydocked in 3Q2012.
World Economy and the Tanker Market
The outlook for the world economy is uncertain. Seaborne imports of crude oil
into the US have not increased over the recent past. Unemployment continues to
be a worry in the US and can be expected to be one key issue in this fall's
presidential campaign. The European economies are struggling with special
problems in the banking sector. Several countries are also burdened with debt.
The economies of the Far East generally show continuing growth and are playing a
key role in the development of the world economy. At the current pace, annual
crude imports into China will total a new record high in 2012. Tanker market
rates are also affected by newbuildings that enter the markets, increasing the
supply of vessels. As a matter of policy the Company does not attempt to predict
future spot rates.
Link to the graph: http://hugin.info/201/R/1632217/523496.pdf
The graph above shows the average yearly spot rates since 2000 as reported by
R.S. Platou Economic Research a.s. The daily rates as reported by shipbrokers
and by Imarex may vary significantly from the actual rates we achieve in the
market, but these rates are in general an indication of the level of the market
and its direction. In any analysis of the tanker industry, the direction of the
global economy is always the most important factor.
The Suezmax fleet (excl. shuttle tankers) counts 425 vessels at the end of
2Q2012, an increase of 16 since the beginning of the year. 18 vessels were
delivered during the second quarter and 29 vessels are planned for delivery in
the rest of 2012.
The current orderbook stands at 72 vessels which represent 17% of the Suezmax
fleet. At the time of this report, the orderbook for 2014 counts 2 Suezmax
vessels.
Scrapping activity has increased over the last 6 months. So far this year 13
Suezmaxes have been scrapped compared to 8 during the year 2011. Given the
current market condition we expect to see a further increase in the scrapping
activity.
Corporate Governance/Conflict of Interests
In the fall of 2010 the New York Stock Exchange Commission presented its final
report on corporate governance. The Commission achieved consensus on 10 core
principles. These principles include a) building long-term sustainable growth in
shareholder value for the corporation as the board's fundamental objective, b)
the critical role of management in establishing proper corporate governance, c)
good corporate governance should be integrated with the company's business
strategy and objectives and d) transparency for corporations and investors,
sound disclosure policies and communication beyond disclosure. We believe the
principles presented are essential elements of good corporate governance and the
Company is in compliance with these principles.
It is vital for NAT to ensure that there is no conflict of interests among
shareholders, management, affiliates and related parties. Interests must be
aligned. We will work to ensure that transactions with affiliates and/or
related parties are transparent.
Strategy going forward
Our objective is to have a strategy that is flexible and has benefits in both a
strong tanker market and a weak one. If the market improves, higher earnings
and dividends can be expected. However, if rates remain low, the Company is in
a position to buy vessels inexpensively by historical standards. Therefore, the
Company is able to improve its relative position in a weak market and is able to
reap the benefits of a stronger environment thereafter. Over the recent past the
Company has improved its relative position.
After an acquisition of vessels or other forms of expansion, the Company should
be able to pay a higher dividend per share and produce higher earnings per share
than had such an acquisition not taken place.
Our full dividend payout policy will continue to enable us to achieve a
competitive, risk adjusted cash yield over time compared with that of other
tanker companies.
NAT is firmly committed to protecting its underlying earnings and dividend
potential.
Our Company is well positioned in this marketplace. We shall endeavor to
safeguard and further strengthen this position for our shareholders in a
deliberate, predictable and transparent way.
We encourage investors who seek exposure to the tanker sector and who value
dividends to review our Company and its performance.
* * * * *
Link to the graph: http://hugin.info/201/R/1632217/523496.pdf
[1] Operating cash flow (a non-GAAP measure) represents income from vessel
operations before depreciation and non-cash administrative charges. For further
information, please see reconciliation on page 9.
[2] Total Return is defined as stock price plus dividends, assuming dividends
are reinvested in the stock
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business. Forward-
looking statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The words
"believe," "anticipate," "intend," "estimate," "forecast," "project," "plan,"
"potential," "may," "should," "expect," "pending" and similar expressions
identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections. We undertake no obligation to
update any forward-looking statement, whether as a result of new information,
future events or otherwise.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, general market conditions, including
fluctuations in charter rates and vessel values, changes in demand in the tanker
market, as a result of changes in OPEC's petroleum production levels and world
wide oil consumption and storage, changes in our operating expenses, including
bunker prices, drydocking and insurance costs, the market for our vessels,
availability of financing and refinancing, changes in governmental rules and
regulations or actions taken by regulatory authorities, potential liability from
pending or future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to accidents or
political events, vessels breakdowns and instances of off-hire, failure on the
part of a seller to complete a sale to us and other important factors described
from time to time in the reports filed by the Company with the Securities and
Exchange Commission, including the prospectus and related prospectus supplement,
our Annual Report on Form 20-F, and our Reports on Form 6-K.
Contacts:
Scandic American Shipping Ltd
Manager for:
Nordic American Tankers Limited
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: nat(at)scandicamerican.com
Rolf Amundsen, Head of Investor Relations, Norway
Nordic American Tankers Limited
Tel: +1 800 601 9079 or + 47 908 26 906
Jacob Ellefsen, Head of Research, Monaco
Nordic American Tankers Limited
Tel: + 44 20 31 78 58 20 or + 44 78 27 92 94 11
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Herbjørn Hansson, Chairman and Chief Executive Officer
Nordic American Tankers Limited
Tel: +1 866 805 9504 or + 47 901 46 291
2nd Quarter 2012 Results:
http://hugin.info/201/R/1632217/523496.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Nordic American Tankers Limited via Thomson Reuters ONE
[HUG#1632217]
Unternehmensinformation / Kurzprofil:
Datum: 07.08.2012 - 10:21 Uhr
Sprache: Deutsch
News-ID 172053
Anzahl Zeichen: 23747
contact information:
Town:
Hamilton HM 12
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 138 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Nordic American Tankers' 2Q2012 Report. Dividend Maintained and Paid for the 60th Consecutive Quarter. The Fleet is in Excellent Technical Condition."
steht unter der journalistisch-redaktionellen Verantwortung von
Nordic American Tankers Limited (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
