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2016-11-10

Nordic American Tankers Limited: Nordic American Tankers' 3Q2016 Report (NYSE:NAT) - By expanding the fleet to 33 vessels, NAT increases its earnings capacity s

Linkto
the complete 3rd Quarter 2016 report:

http://hugin.info/201/R/2055975/770024.pdf
http://hugin.info/201/R/2055975/770024.pdf

Hamilton, Bermuda, November 10, 2016

We do not expect that the result of the US presidential election will have a
negative impact on NAT. As of the date of this report, 2016 has been a very
good year for NAT. The third quarter came out solidly higher than the cash
breakeven level. The fourth quarter of 2016 has so far a good performance.
About 60% of the available days in 4Q2016 have been fixed significantly
higher than the average daily rates for 3Q2016 of $16,700 per vessel - for
the NAT fleet on short term contracts and longer term employment contracts.

NAT is not in the dry cargo or container sectors which have challenges. We are
engaged in transportation of crude oil only.

The success of the recent placement of $120m, in which 70% was subscribed by
institutional investors, was due to our proven business model. Armed with
$120m from the placement, NAT has contracted to increase its fleet from 30 to
33 vessels, enhancing its potential for both higher earnings and dividends.

The capital raise strengthened our company significantly by allowing NAT to
enter into agreements with Samsung Heavy Industries Co. Ltd., for the
construction of three Suezmax tankers of about 157,000 deadweight tons to be
delivered during the second half of 2018. We believe that the terms achieved
are highly attractive.

Growth of a uniform Suezmax fleet has been one key success factor for NAT,
generating an annual average dividend yield of 12% since start of operations
in 1997. Going forward, we believe that the build-up of our fleet to 33
vessels will substantially increase our dividend capacity and Total
Return[1].

Our primary objective is to maximize NAT's risk adjusted return. Our goals are
also to have the strongest balance sheet and the lowest cash breakeven in the
industry. This will give NAT the highest Total Return in alignment with a low
risk approach. Total Return is the best tangible measure of profitability.

We consider our close dialogue with big oil in the West and in the East as
important undertakings. Our services are strongly related to safety for our
crew, the environment and our assets.

Since its establishment, NAT has pursued a well-tested strategy that is
producing high Total Return (i.e. profitability) and dividend yields. NAT has
a cash break-even rate below $11,000 per day per ship, including financial
charges and G&A costs. The operating expenses for our vessels are low; about
$8,400 per vessel per day. Operating expenses for all of our vessels are more
or less the same. This is a result of strict maintenance procedures. The
drydocking costs for those of our vessels that are more than 15 years are on
average less than $2.0m per vessel which is at the same level as the rest of
our fleet.

Shipbuilding technology for crude oil tankers has not changed much over the
last 20 years. Whether a ship has been around five years or fifteen years or
longer does not matter as long as they are well maintained.

In the tanker sector, the NAT stock enjoys significant liquidity allowing
investor to buy and sell shares whenever they wish. In 3Q2016 about 1.7m
shares on average were traded daily with an average daily trading value of
around $20m per day. The average volume for the first nine months of 2016 for
NAT was about 1.6m shares per day.

On October 17, 2016, NAT declared a cash dividend of $0.26 per share for
3Q2016, payable to shareholders of record as of October 27, 2016. Payment of
the dividend took place November 10, 2016. In 2Q2016, the dividend was $0.25
per share.

Key points to consider:

* NAT has paid quarterly dividends 77 times of $47.91 per share during the
period since 1997.

* The low oil price is positive for the tanker market. For the consumer, a
reduced oil price can be compared with a tax break, stimulating the
economy.

* The recent equity offering of $120m was for the expansion beyond the
current 30 vessel fleet. In October 2016, NAT announced agreements with
Samsung to build three Suezmax newbuildings for delivery in 2018. Including
these three newbuildings, we expect that the NAT fleet will consist of
minimum 33 vessels. The construction of our newbuilding for delivery in
1Q2017 is on schedule.

* The quality of the NAT fleet is at the top as evidenced by our vetting
statistics, that is, inspections of our ships by clients. In such vetting
processes safety for our crew, the environment and our assets are in focus.

* Operating cash flow[2]per share has been as follows: $0.24 for 3Q2016,
$0.46 for 2Q2016 and $0.55 for 3Q2015.

* NAT has a credit facility of $500m, maturing in December 2020.

* Net Asset Value (NAV), or the steel value of a vessel, is irrelevant when
valuing NAT as a going concern.

* A homogenous fleet reduces our cash operating costs, which helps to keep
our cash break-even rate below $11,000 per day per vessel, including
financial charges and G&A costs.

For further accounting information, please see below. Our Annual Report 2015
on Form 20-F contains a large amount of information about NAT. This report
was filed with the SEC March 23, 2016 and can be found on our web
sitewww.nat.bm.

Financial Information

The Company declared a cash dividend of $0.26 on October 17, 2016, which was
paid about November 10, 2016 to shareholders of record as of October 27,
2016. The number of NAT shares outstanding at the time of this report is
101,969,666. In 2Q2016, the dividend was $0.25 per share.

Earnings per share (EPS) in 3Q2016 were -$0.08. In 2Q2016 and 3Q2015 the EPS
were $0.15 and $0.29, respectively. EPS does not take account of financial
risk.

The Company's operating cash flow in 3Q2016 was $21.7m including the
settlement gain of $5.3m with Gulf Navigation. In 2Q2016 and 3Q2015 operating
cash flow was $40.7m and $49.1m, respectively.

For the whole fleet, we had a total of 126 days offhire during the quarter, of
which 99 days were planned offhire. The offhire statistics are evidently
reflecting the high quality of our fleet.

NAT continues to maintain a strong balance sheet with low net debt and is
focusing on keeping a low financial risk. At the end of 3Q2016, the Company
had net debt of about $248m or about $8.5m per vessel.

The table on the right shows our operating cash flow, stock liquidity and
dividend over the last eight quarters. Liquidity in the stock is high
compared with other tanker companies.

Link to the graph: http://hugin.info/201/R/2055975/770024.pdf
http://hugin.info/201/R/2055975/770024.pdf
For further information on our financial position for 3Q2016, 2Q2016 and
3Q2015, please see later in this release.

The Fleet

The Company will have a fleet of 30 trading vessels in early 2017. By way of
comparison, in the autumn of 2004, the Company had three vessels.

NAT is focused on maintaining top technical quality of the fleet. Our
operational performance remains at the forefront of the industry. 3Q2016
inspections had an average of 2.4 observations which we consider an excellent
result. NAT's performance can be considered industry best practice.

World Economy and the Tanker Market

The development of the world economy affects the tanker industry. A low oil
price is stimulating the world economy which is positive for the tanker
market.

The drybulk and container sectors are weak. Therefore, some owners are unable
to expand into the crude tanker sector, which is currently strong. The yard
industry is struggling with low orders over the last years. For NAT, a strong
balance sheet and access to financing are competitive advantages.

The Suezmax fleet (excl. shuttle tankers) counts 475 vessels at the end of
3Q2016, following an increase of 20 vessels so far this year.

During the years 2014 and 2015, a number of orders were placed with shipyards.
The current orderbook of crude tankers stands at 75 vessels from now to the
end of 2018. This represents about 16% of the Suezmax fleet. Slippage and
cancellations may take place, thereby reducing the orderbook. So far in 2016,
there has been a fleet growth of 4.2% with no scrapping of vessels.

The graph to the right shows the average yearly spot rates since 2000 as
reported by Clarksons Platou.The ratesaboveare an indication of the level of
the market and its direction.

Link to the graph: http://hugin.info/201/R/2055975/770024.pdf
http://hugin.info/201/R/2055975/770024.pdf
At the time of this report, the market has recovered from the level of 3Q2016.
The supply of tanker tonnage is inelastic in the short term. When there are
too many ships, rates tend to go down. When there is scarcity of ships, rates
tend to go up.

C
orporate Governance/Conflict of Interests

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. From time to time in the shipping industry, we see that
questionable transactions take place which are not in harmony with sound
corporate governance principles, both as to transparency and related party
aspects.

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. In an improved market, higher
earnings and dividends can be expected. The Company is in a position to reap
the benefits of strong markets.

Our dividend policy will continue to enable us to achieve a competitive cash
yield.

NAT is firmly committed to protecting its underlying earnings and dividend
potential. We shall endeavor to safeguard and further strengthen this
position in a deliberate, predictable and transparent way.

Going forward we believe the recent acquisitions of vessels will increase
NAT's Total Return.

*****

Link to the graph: http://hugin.info/201/R/2055975/770024.pdf
http://hugin.info/201/R/2055975/770024.pdf
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...

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