In our Letter to Shareholders earlier this week (November 30) we
emphasized that a low oil price is good for the tanker
business. We do not believe that the recent OPEC decision can
be expected to negatively impact the business of NAT.
Below is the Letter to
Shareholders:--------------------------------------------------
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.
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 11, 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. A
low oil price is good for the tanker business.
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.
Press release PDF:
http://hugin.info/201/R/2061498/773117.pdf
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
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