Link to the complete 3rd Quarter 2016
report: http://hugin.info/159489/R/2056555/770316.pdf
The operating cash flow1 for Nordic
American Offshore Ltd. (“NAO” or “the Company”) was -$3.4m in
3Q2016. NAO is better positioned compared with other companies in
the industry. During the quarter we saw a number of financial
restructurings. Access to financing is a competitive advantage for
NAO.
NAO has ten high-quality Platform Supply Vessels
(PSVs) built in Norway in the period 2012-2016. At the end of the
quarter seven of our ten vessels are in operation. We continue to
focus on developing the relationship with our clients. NAO sees
opportunities to grow the Company. Acquisitions have to be
accretive for our earnings and dividends over time.
The basic features of NAO are similar to the
successful structure of the NYSE listed Nordic American Tankers
Limited.
The Board has declared a dividend of $0.03 per
share for 3Q2016 to shareholders on record as of November 23, 2016.
The payment of the dividend is expected to take place on or about
December 7, 2016. Since its original establishment in late 2013,
NAO has paid dividends for 11 consecutive quarters, totaling $2.57
per share, including the dividend to be paid about December 7,
2016.
The North Sea is at the present time the
geographical market area for NAO.
Key points to consider:
- Earnings per share (EPS) has been: -$0.42 for 3Q2016, -$0.36
for 2Q2016 and -$0.13 for 3Q2015.
- EPS does not take into account financial risk. i.e. the debt
level of a company.
- Operating cash flow per share has been: -$0.16 for 3Q2016,
-$0.12 for 2Q2016 and $0.04 for 3Q2015.
- NAO had at the end of 3Q2016 total net debt of $127.5m for its
ten vessel fleet, or about $12.7m per vessel. The credit facility
of $150m matures in March 2020.
- NAO has a low cash breakeven level of about $11,500 per day per
vessel, including financing and G&A costs.
Financial Information
The Board has declared a cash dividend of $0.03
per share for 3Q2016 to shareholders of record as of November
23, 2016. The payment date is on or about December 7, 2016.
Net Loss (accountingwise) was -$8.6m in 3Q2016.
In 2Q2016 and 3Q2015 the comparable figures were -$7.4m and -$3.1m,
respectively.
The Company's operating cash flow was -$3.4m in
3Q2016. In 2Q2016 and 3Q2015 operating cash flow was -$2.5m and
$1.0m, respectively.
At the end of 3Q2016, net debt per NAO vessel
was $12.7m. NAO has in place until early 2020 a non-amortizing
credit facility of $150m. Several service companies in our sector
are in a difficult financial position. Going forward, NAO sees
opportunities for expansion.
We concentrate on keeping our vessel operating
costs low, while always maintaining our strong commitment to safe
operations. As we expand our fleet, we do not anticipate that our
administrative costs will rise correspondingly.
As reported July 18, 2016, Marianne Lie, who has
a wealth of experience from the offshore sector and from top
positions in other companies, assumed position as Executive Vice
Chair of NAO. Tor Øyvind Bjørkli, the Managing Director of NAO, is
reporting to Ms. Lie. This reorganization strengthens NAO.
For further details on our financial position
for 3Q2016, 2Q2016 and 3Q2015, please see later in this release.
Our 2015 Annual Report (Form 20-F) contains a large amount of
information about NAO. This report was filed with the SEC March 23,
2016 and can be found on our web site www.nao.bm.
The Fleet
Our fleet is comprised of ten high-quality PSVs.
All our trading vessels operate in the UK and in the Norwegian
sectors of the North Sea. The vessels may operate in either sector
or elsewhere. The significant fuel efficiency, and corresponding
low emissions of our ships are attractive features for our
clients.
The Company’s objective is to ensure spot or
term employment for the fleet. The specifications of the Company’s
vessels are by and large the same.
Strategy Going Forward
The main elements of NAO’s strategy is based on
quarterly dividends, low debt, low G&A costs, high liquidity in
the stock and full transparency. Growth of the fleet is a central
part of our strategy
Our dividend policy has the objective to achieve
a competitive cash yield and a positive Total Return2 over
time.
NAO is firmly committed to protecting its
underlying earnings, dividend potential and strong balance
sheet.
We shall endeavor to safeguard and further
strengthen the position in a deliberate, predictable and
transparent way.
We encourage prospective investors interested in
the Offshore Supply Vessel sector to consider buying shares in
NAO.
* * * * *
Link to the
graph: http://hugin.info/159489/R/2056555/770316.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 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 PSV
market, as a result of changes in the general market conditions of
the oil and natural gas industry which influence charter hire rates
and vessel values, demand in platform supply vessels, our operating
expenses, including bunker prices, dry docking and insurance
costs, governmental rules and regulations or actions taken by
regulatory authorities as well as potential liability from pending
or future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to
accidents or political events, the availability of financing and
refinancing, vessel breakdowns and instances of off-hire and other
important factors described from time to time in the reports filed
by the Company with the Securities and Exchange Commission.
Contacts:
Herbjørn Hansson,
ChairmanNordic American Offshore Ltd.Tel: +1 866 805 9504
or +47 90 14 62 91 |
Jan H. A. Moller, Head of
I&R & Financial ManagerNordic American Offshore Ltd.Tel:
+47 33 42 73 00 or +47 90 11 53 75 |
|
|
Marianne Lie, Executive
Vice ChairNordic American Offshore Ltd.Tel.: +47 91 64 55
06 |
Tor-Øyvind Bjørkli,
Managing DirectorNordic American Offshore Ltd.Tel: +47 90 62 70
14 |
|
|
Turid M. Sørensen,
CFONordic American Offshore Ltd.Tel: +47 33 42 73 00 or +47 90 57
29 27 |
Gary J. WolfeSeward &
Kissel LLPNew York, USATel: +1 212 574 1223 |
|
|
Web-site: www.nao.bm |
|
3rd Quarter 2016 Result:
http://hugin.info/159489/R/2056555/770316.pdf
1 Operating cash flow is an important dimension in the
industry, but it is a non-GAAP measure. Please see later in this
announcement for a reconciliation of operating cash flow to income
(loss) from vessel operations.
2 Total Return is defined as stock price plus dividends,
assuming dividends are reinvested in the stock.
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