Nordic American Tanker Shipping Ltd. (NYSE:NAT) Letter to Shareholders from the Chairman and CEO. Dividend policy firmly in place. Growth to continue.
(Thomson Reuters ONE) -
Hamilton, Bermuda, September 29, 2010
Dear Shareholder,
I'd like to update you on our current business and financial position. Nordic
American is in an excellent situation in a tanker market that has softened in
this third quarter of 2010. Based on its strong balance sheet with no net debt
and available liquidity reserves, Nordic American has a significant upside
potential and a limited downside.
As you know, our goal is to maximize total return to our shareholders. Total
return is defined as the stock price plus dividends, assuming dividends are
reinvested in the stock. From 1997 to mid September this year our total
return was about 20% on an annualized basis. The major portion of this return
was paid as dividends to our shareholders.
The amount of our quarterly dividend per share is above all a reflection of the
level of the spot tanker market. Distribution of at least all available
operating cashflow as dividends to our shareholders is an important part of our
strategy. Including the dividend to be paid in December this year, the Company
have paid dividends for 53 consecutive quarters since the autumn of 1997
when NAT commenced operations.
Spot tanker markets are often soft during the third quarter of a year. This year
has been no exception. At the time of writing the suezmax spot tanker market
rates are averaging about $10,000 per day according to the Imarex, a spot tanker
market index. Nordic American is well above that level for the quarter. As in
the past the spot tanker rates have been volatile and the spot tanker market may
turn fast and unpredictably. The spot rates as reported by Imarex may often vary
from the actual rates we achieve in the markets. Taking into consideration the
present state of the spot tanker markets, we still expect that our dividend for
3Q10 should be well above the level in the third quarter of 2009 which was $0.10
per share.
The Company expects to publish its dividend and third quarter 2010 report on
November 8, 2010. The record date is expected to be November 22, 2010 and the
payment of dividend is expected to take place on or about December 3, 2010.
Accretive growth is a key element in our strategy. The Company has grown from 3
vessels in 2004 to 19 suezmax vessels now, including three newbuildings due to
be delivered in 2010 and 2011. We expect that the fleet of NAT will reach a
minimum of 20 vessels by the end of 2011. We have no plans to tap the equity
markets to fund this expansion as the Company has ample financial resources to
expand with several more ships with the present balance sheet.
If the present soft spot tanker market results in lower vessel prices in the
second hand markets, we shall be in a position to acquire further vessels
inexpensively compared to historical levels. Such acquisitions should increase
the dividend capacity of the Company in the future. The position of NAT is
particularly strong when it is compared with companies having a substantial
amount of debt on their weak balance sheets.
Below is a chart indicating the annual dividend capacity based on a fleet of 20
vessels and 24 vessels respectively, at different spot market rates.
The above annual dividend indications are based on 355 income days per vessel
per year. The net debt is about $7m per vessel for a 20 vessel fleet and about
$16m per vessel for a 24 vessel fleet depending upon the price we pay for new
acquisitions. The numbers show the substantial dividend capacity of NAT.
In short, NAT is well positioned for further strong fleet growth and increase of
dividend capacity.
Summing up, the Company's strategic position is as follows:
1. When the tanker markets are firm, very good results and dividends can be
expected.
2. When the tanker markets are soft, the results and dividends will be lower - a
minus. At the same time the Company may be in a position to buy vessels
inexpensively and accretively - a plus that we believe over time outweighs the
minus.
As you can see, I remain very optimistic about the future of Nordic American.
Many shareholders contact us expressing views and recommendations. Please
continue contacting us for any questions or comments you may have. My email is
herbjorn.hansson(at)scandicamerican.com.
For other addresses, please see the end of this message.
All the best!
Sincerely,
Herbjorn Hansson
Chairman & CEO
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 Tanker Shipping Limited
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: nat(at)scandicamerican.com
Rolf Amundsen, Investor Relations
Nordic American Tanker Shipping Limited
Tel: +1 800 601 9079 or + 47 908 26 906
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Turid M. Sørensen, CFO
Nordic American Tanker Shipping Limited
Tel: + 47 33 42 73 00 or + 47 905 72 927
Herbjørn Hansson, Chairman and Chief Executive Officer
Nordic American Tanker Shipping Limited
Tel: +1 866 805 9504 or + 47 901 46 291
[HUG#1447663]
Press Release (PDF):
http://hugin.info/201/R/1447663/390249.pdf
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Source: Nordic American Tanker Shipping Ltd. via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 29.09.2010 - 14:27 Uhr
Sprache: Deutsch
News-ID 43270
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Town:
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