Nordic American Tanker Shipping Ltd. (NAT)-(NYSE:NAT) Letter to
Shareholders from the Chairman and C
(Thomson Reuters ONE) - Hamilton, Bermuda, September 29, 2009Dear Shareholder,It is now time for me to send you a letter summarizing aspects of ourcurrent business and financial position. Nordic American is in anexcellent situation in a tanker market which has declined during thelast few months primarily due to weakened international economicconditions. Based on its clean balance sheet and available liquidityresources, Nordic American has a significant upside potential and alimited downside.We have made good progress, in particular since 2004 when NAT wasturned into an operating company. I shall review some of the keyelements.Our goal is to maximize total return to our shareholders. Totalreturn is defined as the stock price plus dividends, assumingdividends are reinvested in the stock. From 2004 and up to lateAugust this year our total return for the period was about 95% or14.3% on an annualized basis. Throughout this period Nordic Americanhas kept its full payout dividend policy.Distribution of available operating cashflow as dividends to ourshareholders is an integral and important part of our strategy. NAT'sBoard of Directors is committed to continuing our dividend policywhich remains firmly in place. The amount of our quarterly dividendper share is primarily a reflection of the level of the spot tankermarket.Accretive growth is also a key element in our strategy. The Companyhas grown from 3 vessels in 2004 to 16 suezmax vessels now, includingtwo newbuildings expected to be delivered in 2010. At this time theCompany has adequate financial resources to buy more vessels withouttapping the equity market. Our goal is to grow the fleet faster thanthe number of shares outstanding. This will provide for accretion toour dividend per share at any rate level in the spot tanker marketabove our cash break-even which is currently below $10,000 per dayper vessel.In short, Nordic American is well positioned for further stronggrowth and increase of dividend capacity.The market capitalization of the Company has grown considerably overthe years and has now reached approximately $1.25 billion. TheCompany has thereby within this 5 year period become the thirdlargest listed tanker company.We are also pleased to see that the liquidity in our stock hasquadrupled over the last 5 years as illustrated by the graph. In1Q04 about 200,000 NAT shares were bought and sold per day. Thisnumber is now about 800,000 shares.Following this development, Nordic American has also become anattractive investment alternative for many large institutionalinvestors.Spot tanker charter market rates are very volatile. During the thirdquarter, the spot tanker markets have been soft, mainly due to lowoil demand, high inventories, seasonal factors and newbuildings fromthe yards entering the market. The average spot market rate forsuezmax tankers as reported by the IMAREX Tanker Index has been$12,932 so far in the third quarter compared with $20,569 per day inthe second quarter. The rates achieved by NAT may well vary from theIMAREX numbers. The volatility in rates is expected to continue. As amatter of policy, we do not predict future spot rates.Including all cash expenses, we estimate that our cash break-even forour trading fleet is below $10,000 per day per vessel. When spotsuezmax tanker rates are above this level, you can expect that ourcompany will pay a dividend. This cash break-even rate is very lowcompared with other listed companies in the industry.Our dividend and earnings report for the third quarter is expected tobe announced Monday November 9, 2009, before the opening of the NewYork Stock Exchange. The next dividend is expected to be paid on orabout December 4, 2009 to shareholders of record November 23, 2009.If the present soft spot tanker markets result in lower vessel pricesin the second hand markets, we shall be in a position to acquirefurther vessels inexpensively compared to historical levels. Suchacquisitions should increase the dividend capacity of the Company inthe future.We base our maintenance standard on the premise that our ships lastfor at least 25 years. Technical operations must be perfect - nothingelse is acceptable. We are doing business all around the world withthe major oil companies as important clients. Safety for crews,protection of the environment and safety for the vessels is ourhighest priority.For a lifespan of a vessel its steel quality is of great importance.It requires constant attention to assure proper maintenance of thevessels, including painting of the ballast tanks. We normally havespecial riding squads to keep up steel and painting quality of theballast tanks. However, this work is now being performed at a yard inChina for one of our vessels following the discharge of a cargothere. When the tanker market is lower and the prices for work at theshipyards have come down substantially, it becomes commercially moreattractive to do the painting work at a yard instead of using atravel squad. The costs of the painting at the yard are now moderateand are treated as Capex. It is expected that the loss of incomecaused by the stay at the yard (opportunity loss) could be in theregion of $600,000 most of which can be expected to influence theaccounts of 4Q09. This painting and maintenance method is expected topositively impact our cost structure in the future.Going forward, we intend to safeguard our balance sheet to keep ourfinancial risk to a minimum. Our policy is to incur little debt, ifany.Summing up, the Company's strategic position is as follows:1. When the tanker markets are firm, very good results and dividendscan be expected.2. When the tanker markets are soft, the results and dividends willbe lower - a minus. At the same time the Company may be in a positionto buy vessels inexpensively and accretively - a plus. Over time, webelieve that this plus can more than outweigh the minus mentionedabove.As you can understand, I am optimistic about the future of NordicAmerican.Many shareholders contact us expressing views and recommendations.Please continue contacting us for any question or comment you mayhave. My email is herbjorn.hansson(at)scandicamerican.com.For other addresses, please see the end of this message.All the best!Sincerely,Herbjorn HanssonChairman & CEO CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSMatters discussed in this press release may constituteforward-looking statements. The Private Securities Litigation ReformAct of 1995 provides safe harbor protections for forward-lookingstatements in order to encourage companies to provide prospectiveinformation about their business. Forward-looking statements includestatements concerning plans, objectives, goals, strategies, futureevents or performance, and underlying assumptions and otherstatements, which are other than statements of historical facts.The Company desires to take advantage of the safe harbor provisionsof the Private Securities Litigation Reform Act of 1995 and isincluding this cautionary statement in connection with this safeharbor legislation. The words "believe," "anticipate," "intend,""estimate," "forecast," "project," "plan," "potential," "may,""should," "expect," "pending" and similar expressions identifyforward-looking statements.The forward-looking statements in this press release are based uponvarious assumptions, many of which are based, in turn, upon furtherassumptions, including without limitation, our management'sexamination of historical operating trends, data contained in ourrecords and other data available from third parties. Although webelieve that these assumptions were reasonable when made, becausethese assumptions are inherently subject to significant uncertaintiesand contingencies which are difficult or impossible to predict andare beyond our control, we cannot assure you that we will achieve oraccomplish these expectations, beliefs or projections. We undertakeno obligation to update any forward-looking statement, whether as aresult of new information, future events or otherwise.Important factors that, in our view, could cause actual results todiffer materially from those discussed in the forward-lookingstatements include the strength of world economies and currencies,general market conditions, including fluctuations in charter ratesand vessel values, changes in demand in the tanker market, as aresult of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in our operating expenses,including bunker prices, drydocking and insurance costs, the marketfor our vessels, availability of financing and refinancing, changesin governmental rules and regulations or actions taken by regulatoryauthorities, potential liability from pending or future litigation,general domestic and international political conditions, potentialdisruption of shipping routes due to piracy, accidents or politicalevents, vessels breakdowns and instances of off-hire, failure on thepart of a seller to complete a sale to us and other important factorsdescribed from time to time in the reports filed by the Company withthe Securities and Exchange Commission, including the prospectus andrelated prospectus supplement, our Annual Report on Form 20-F, andour Reports on Form 6-K.Contacts:Scandic American Shipping LtdManager for:Nordic American Tanker Shipping LimitedP.O Box 56, 3201 Sandefjord, NorwayTel: + 47 33 42 73 00 E-mail: nat(at)scandicamerican.comRolf Amundsen, Investor RelationsNordic American Tanker Shipping LimitedTel: +1 800 601 9079 or + 47 908 26 906Gary J. WolfeSeward & Kissel LLP, New York, USATel: +1 212 574 1223Turid M. Sørensen, CFONordic American Tanker Shipping LimitedTel: + 47 33 42 73 00 or + 47 905 72 927Herbjørn Hansson, Chairman and Chief Executive OfficerNordic American Tanker Shipping LimitedTel: +1 866 805 9504 or + 47 901 46 291http://hugin.info/201/R/1344646/322493.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 29.09.2009 - 15:04 Uhr
Sprache: Deutsch
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