Nordic American Tanker Shipping Ltd. (NYSE:NAT) - Announces Dividend
for the 49th Consecutive Quarte
(Thomson Reuters ONE) - 3rd Quarter 2009 Results: http://hugin.info/201/R/1353507/327857.pdfHamilton, Bermuda, November 9, 2009Introduction and OverviewOn or about December 4th NAT will pay a dividend for the 49thconsecutive quarter since the first three vessels were delivered tothe Company in the autumn of 1997 when the Company commencedoperations. Since then a total of $39.89 per share has been paid individend.We believe that some salient points of this report are as follows: * The 3rd quarter was down with a corresponding low dividend of $0.10 per share because of a low freight market. * There are signs of a positive development in the world economy and the freight market for the 4th quarter has started on a positive note compared with 3rd quarter. * We announced yesterday our agreement to acquire vessel no. 18 - which will increase the dividend capacity of the Company.The low spot rates for suezmax tankers during 3Q09 resulted in alower dividend payment than in the 2Q09. In this environment, with aspot market fleet, except for one vessel, the Company can be expectedto reap the benefits of a potential upswing in the tanker market moreor less immediately. The Imarex rates, giving an indication of thelevel of the tanker market, were on average $13,000 per day during3Q09. The Imarex rate for suezmaxes at the time of this report is$17,846 per day. The average Imarex projected rates for November andDecember are about $20,000 per day. It is indicated that the worldeconomy, as expressed by the GNP development, has bottomed out whichis positive for the tanker business. The Board is optimistic for thefuture of the Company and the announcement to acquire vessel no. 18is a confirmation of this view.During 2009 NAT has acquired three vessels, and has entered into anagreement to acquire the fourth, increasing the trading fleet by onethird - from 12 to 16 vessels - since the beginning of the year. Theacquisitions are accretive, increasing the dividend potential of theCompany. The acquisitions have improved our position relative tocompetitors which have a tough time in coping with the consequencesof the international financial crisis. We have two newbuildingscoming next year, bringing the trading fleet to 18 vessels. We donot plan to go to the market to raise capital for the vessels we nowhave, the one to be delivered to us by end February 2010 and the twonewbuildings. From the end of 2008 and until August 2010 - a periodof 20 months - the total fleet will have grown from 12 to 18 vessels,thereby increasing the dividend and earnings potential by 50%.A full dividend payout policy and a strong balance sheet are centralcomponents of the consistent and transparent strategy of NAT. As inthe past, in order to create value for shareholders, the fleet mustgrow faster than the share count over time.Typically, our dividend follows the level of the spot suezmax tankerfreight market. That is why our dividend is lower in 3Q09 than in2Q09. However, our policy of paying dividends from operating cashflow remains the same. Generally, when rates in the suezmax freightmarket increase, our dividend can be expected to increase. Therefore,the Company has the full upside associated with a market improvement.Going forward, we expect that spot suezmax freight rates mayfluctuate in an unpredictable manner.The present instability in the financial markets and the lowerfreight markets are posing serious issues for debt laden shippingcompanies. Some of them have suspended dividends or changed theirdividend policy and they have had to negotiate new terms with thebanks. NAT is staying its course in this environment - having no netdebt. We go forward with a view to retaining what we consider theexceptionally strong financial situation of the Company - both inabsolute and relative terms - as we believe that is in the bestinterests of our shareholders.Our primary objective is to maximize total return[1] to ourshareholders, including maximizing our quarterly cash dividend.The Company does not engage in any type of derivatives.Other Highlights: * Net income for 3Q09 was -$0.28 per share based on the weighted average number of shares outstanding during the quarter of 42,204,904, compared to $0.00 per share for 2Q09. Net result from ongoing operations was -$0.26 per share. To put this into perspective, due to lower freight markets at the time, net income was also below zero in 3Q07. * In 3Q09 total off-hire (out of service) for the Company's fleet was about 40 days of which planned off-hire was about 15 days. There are no scheduled dry-dockings for any of the Company's vessels until 2010 when one vessel is scheduled for dry-docking. * In early October, the Company announced that it had agreed to acquire a 2002-built double hull suezmax tanker. We expect to take delivery of this vessel, to be named the Nordic Mistral, by mid-November 2009. The Company announced yesterday that it has agreed to acquire an additional 2002 built double hull suezmax vessel which is expected to be delivered to us by the end of February 2010. The two newbuildings of the Company are expected to be delivered in May and August 2010, bringing the trading fleet to 18 vessels.Financial Information:The Board has declared a dividend of $0.10 per share in respect of3Q09. A dividend of $0.50 per share was declared for 2Q09. The amountof dividends per share is above all a reflection of the level of thespot tanker market during the relevant quarter and the number ofshares outstanding. The number of shares outstanding for the thirdquarter of 2009 was 42,204,904 - the same number as of the date ofthis release.Net income for 3Q09 was -$11.8m, or -$0.28 per share (EPS) comparedto net income of -$0.1m, or $0.00 per share for 2Q09. One-timecharges and non-cash general and administrative items for 3Q09 equal$0.02 and $0.03 per share, respectively. Therefore, result fromongoing operations was -$0.26 per share. Reflecting a weak spotmarket in the quarter, the Company's operating cash flow[2] was $3.8mfor 3Q09, compared to $17.0m for 2Q09.We consider our general and administrative costs per day per ship tobe at a low level. We also continue to have a strong focus on keepingour vessel operating costs low, while always maintaining ourcommitment to safe vessel operations.We estimate that our average cash breakeven level for our fleet isbelow $10,000 per day per vessel. When the freight market is abovethis level, the Company can be expected to pay a dividend. Thebreakeven rate is the amount of average daily revenues our vesselswould need to earn in the spot market in order to cover our vesseloperating expenses, voyage expenses, if any, cash general andadministrative expenses, interest expense and other financialcharges.At the time of this report the Company has no net debt and has anundrawn revolving credit facility of $500 million. The creditfacility, which matures in September 2013, is not subject toreduction by the lenders and there is no obligation to repayprincipal during the term of the facility. The Company pays interestonly on drawn amounts and a commitment fee for undrawn amounts.Assuming no more acquisitions are made until the last of the twonewbuildings are delivered in 2010, the Company can be expected tohave net debt of about $8 million per vessel at that time in additionto having a substantial reserve in the unused credit facility.The double hull Suezmax tanker which was delivered to the Company onJuly 7, 2009, the Nordic Grace, was financed from cash on hand. Thevessel we agreed to purchase on October 5, 2009, will also befinanced from cash. The same goes for the vessel that the Company hasagreed to acquire and which will be delivered to us by the end ofFebruary 2010.For further details on our financial position and for other periodssuch as 3Q08 and for the nine months ended September 30, 2009 andSeptember 30, 2008, please see later in this release.The Fleet:With the delivery of the Nordic Grace in July, the recently acquiredvessel to be delivered by mid-November this year and the vesselexpected to be delivered to us by end February 2010, 15 of theCompany's 16 existing vessels have employment in two cooperativearrangements. One vessel remains employed on a long-term fixed ratecharter.By way of comparison, in the autumn of 2004 the Company had threevessels; at the end of 2005 the Company had eight vessels; and at theend of 2006 the Company had 12 vessels. During 2Q09, we had 13vessels in operation. With the two newbuildings announced in November2007 and the most recent acquisitions, the Company is expected tohave a fleet of 18 vessels operating from August 2010, assuming nofurther acquisitions in the meantime.Vessel Dwt EmploymentGulf Scandic 151,475 Long term fixed charterNordic Hawk 151,475 SpotNordic Hunter 151,400 SpotNordic Voyager 149,591 SpotNordic Fighter 153,328 SpotNordic Freedom 163,455 SpotNordic Discovery 153,328 SpotNordic Saturn 157,332 SpotNordic Jupiter 157,411 SpotNordic Cosmos 159,998 SpotNordic Moon 159,999 SpotNordic Apollo 159,999 SpotNordic Sprite 147,188 SpotNordic Grace 149,921 SpotNordic Mistral 164,236 Delivery expected by mid-November 2009Nordic TBN 164,274 Delivery expected by end February 2010Nordic Galaxy 163,000 Delivery expected by end May 2010Nordic Vega 163,000 Delivery expected by end August 2010Total 2,820,410No scheduled dry-dockings were undertaken during 3Q09. There are nofurther scheduled dry-dockings for our vessels until 2010 when onedry-docking is expected to take place. During 3Q09, we had in total25 days of unplanned off-hire and 15 days planned off-hire for ourfleet.Financial Instability and the Tanker Market:In our quarterly reports to shareholders we have often stressed thesignificance of the development of the world economy for the tankerindustry. Presently, the world economy shows a significantcontraction of demand. This downturn influenced the suezmax tankermarket during the 3Q09. Exports of oil from OPEC to the West havedeclined over the last few months, reducing demand for tankervessels.For NAT a lower freight tanker market can be expected to result in alower dividend. If a lower freight market results in lower vesselprices - such a development would be an advantage for the Companybecause we would be in a position to acquire additional vesselsinexpensively compared to historic levels. The four acquisitions sofar in 2009 reflect the ability of the Company to grow accretively;they will allow the Company to pay a higher dividend than if they hadnot taken place. This is so irrespective of the level of the suezmaxspot tanker market, as long as the freight level is above theCompany's low cash break-even for its fleet as a whole.While the recession internationally is reducing the demand fortransportation capacity, the demand side for tankers to some extentcontinues to be impacted positively by the use of tankers forstorage.On the supply side, we now see clearly that the current financialupheaval may delay deliveries of newbuildings and may also lead tothe cancellation of newbuilding orders.The average daily rate for our spot vessels was $14,075 per day netto us during 3Q09 compared with $26,300 per day for 2Q09.Spot market rates for suezmax tankers are very volatile. The averagespot market rate for modern suezmax tankers as reported by Imarex was$13,012 per day in 3Q09 compared to $20,569 per day during 2Q09. TheImarex rate at the time of this report is $17,846 per day.The graph shows the average yearly spot rates since 2000 as reportedby R.S. Platou Economic Research a.s. The rates as reported byshipbrokers and by Imarex may vary from the actual rates we achievein the market.We believe it is an advantage for the Company to have its spotvessels in two cooperative arrangements which in total have more than50 suezmax vessels under commercial management.Strategy going forward:We believe that the operating model of the Company works to thebenefit of our shareholders.The serious financial turmoil may represent attractive opportunitiesfor our Company.The Company essentially has the following strategic position goingforward: If the market is firm, very good results and dividend can beexpected.In a weaker market, the dividend will be lower which is a minus.However, if rates are down for a while, the Company is in a positionto buy ships inexpensively and accretively which is a plus. This pluscan be expected to be much larger than the minus. Several of ourlisted competitors have significant net debt which could make itdifficult for them to buy vessels in a weak market. In this way, theCompany has covered both scenarios. Typically, the level of the spotmarket rates may change very fast.Our policy is to grow when it is profitable and accretive to do so;that is, after an acquisition of vessels or other forms of expansion,the Company should be able pay a higher dividend per share andproduce higher earnings per share than before such an event beforetaking into account any change in the spot rates. We believe that theacquisitions this year are examples of such accretive transactions.We believe that our full dividend payout policy will continue toenable us to achieve a competitive cash yield compared with that ofother shipping companies.We encourage investors wishing to have exposure to the tanker sectorto assess our model and invest in our Company.In the midst of the international financial instability, our Companyis well positioned. To the best of our ability we shall endeavor tosafeguard and further strengthen this position. * * * * *[1] Total Return is defined as stock price plus dividends, assumingdividends are reinvested in the stock[2] Operating cash flow is a non-GAAP member. Please see later inthis announcement for a reconciliation of operating cash flow toincome from vessel operations. 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 accidents or political events,vessels breakdowns and instances of off-hire, failure on the part ofa 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/1353507/327857.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 09.11.2009 - 07:19 Uhr
Sprache: Deutsch
News-ID 8084
Anzahl Zeichen: 0
contact information:
Town:
London
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 302 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Nordic American Tanker Shipping Ltd. (NYSE:NAT) - Announces Dividend
for the 49th Consecutive Quarte"
steht unter der journalistisch-redaktionellen Verantwortung von
Nordic American Tanker Shipping Ltd. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
