Nordic American Tankers Limited
(NYSE:NAT) - Letter to the Shareholders. Prospects for the fourth
quarter of 2016 look good, an improvement on an already positive
third quarter of 2016. A low oil price is good for the tanker
business.
Hamilton, Bermuda, November 30, 2016
Dear shareholders,
My last shareholder letter was dated August 28,
2016, our successful capital raise of USD 120 m was completed on
September 30, and our 3Q report was dated November 10, 2016.
During 3Q2016 we generated a cash surplus that was
much higher than our cash break even rate, which is below USD
11,000 per day per ship.
We also expect that the 4Q2016 result will be well above 3Q2016,
which had a time charter of USD 16,700 per day per ship on average
for our vessels on contracts and on short term employment.
Now that we have about 75 % of the available days
in 4Q2016 under our belt, we are at about USD 20,000 per
day. Our recent stock issue allowed us to contract for three
newbuildings to be delivered in 2018, increasing the fleet from 30
to 33 Suezmaxes.
The board, management and our advisors subscribed
for a total of $5.3 million of the issue. We eat our own cooking,
so to speak, and our goal is the same as it is for all
shareholders: to make money on our investment. Growth has
been a key success factor of our business model. It's important for
companies to grow and it's crucial for our future dividend
capacity.
Any company must grow - that is a part of
capitalism. A company that does not grow is dead. Our recent order
for 3 new Suezmax ships at Samsung was concluded at highly
attractive terms. A major part of the purchase price is due on
delivery. This is a great investment, boosting NAT.
Over the years from 2004 we have grown step
by step from 3 to 33 Suezmax ships. We have already increased our
fleet by 5 ships this year and will take delivery of our 30th ship
in early 2017.
Except for the three newbuildings, all these
vessels were funded by existing resources. Our objective is to
increase earnings. The acquisitions have to be accretive and
increase our earnings power.
The markets for dry cargo vessels and container vessels are
difficult. NAT, of course, is not involved in these sectors.
There is also now limited access to financing, which prevents some
other companies from expanding their fleets. Having access to
financing, as we do, is increasingly becoming a competitive
advantage.
We welcome all investors to become our
shareholders. We are the crude tanker company with the most
shareholders in the world. Whether you are a mutual fund, hedge
fund, investment advisor or an individual investor, we value you
all the same. Our large base of shareholders has made our stock
very easy to trade. We can never have too many shareholders and our
stock can never be liquid enough.
The Suezmax tanker market has recovered
significantly from the time of my last letter, as demonstrated by
4Q2016 results so far.
The low oil price is good for the tanker market
and hence for NAT. The demand for oil and its production is
growing, which is positive for the transportation of oil. The
demand in the Far East is particularly strong, which makes it
a promising market for us.
Finally, we do not expect that results of the US
Presidential election will affect NAT adversely.
Our strategy is to expand with a low level of debt. When we
generate cash we prefer to pay it out in dividends. We always
stick to our strategy and are not afraid to sail in the opposite
direction of the rest of the industry
We wish to have the strongest balance sheet and
the lowest cash break even. I firmly believe that this will give
the highest total return to shareholders; the best measure of
profitability.
My best wishes to you for a happy new year!
Kind regards
Herbjørn Hansson
Chairman & CEO
Nordic American Tankers Ltd
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," "will," "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-hires 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:
Herbjørn Hansson, Chairman & CEO
Nordic American Tankers Limited
Tel: +1 866 805 9504 or +47 90 14 62 91
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Turid M. Sørensen, CFO & EVP
Nordic American Tankers Limited
Tel: +47 33 42 73 00 or +47 90 57 29 27
Web-site: www.nat.bm
Press release PDF
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The issuer of this announcement warrants that they are solely
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information contained therein.
Source: Nordic American Tankers Limited via
Globenewswire
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