Hamilton, Bermuda, December 21, 2016
Today, a few days before Christmas, we wish to
give you a brief update on a few pertinent NAT matters.
As previously communicated, the fourth quarter of 2016 is turning
out well. Our cash break even below $11,000 per ship per day gives
an excellent basis for solid cash surpluses.
The 4Q2016 cash results are expected to be about
$20,000 (time charter equivalent) per ship per day. The NAT
fleet is increasing and our 30th Suezmax
tanker is scheduled to be delivered to us mid-February 2017. It has
already obtained employment for her maiden voyage.
Three more newbuildings will increase the fleet with
further 10%, impacting dividend and earnings capacity
correspondingly.
We do not have all our ships in the spot
market. Some of them are employed on short term and longer
term contracts with solid clients. So far, the first quarter of
2017 has started off well with a strong tanker market.
In our reports, we have repeatedly stressed that
Net Asset Value (NAV) - the steel value of a ship - is of no
relevance in the assessment of the value of NAT as a going concern.
For further details, please see our below letter
of November 30, 2016.
NAT has a good future. We are happy to
respond to any questions you may have. Meanwhile, we wish you all
the best for the Holiday Season!
Kind regards,
Herbjørn Hansson
Chairman & CEO
Nordic American Tankers Ltd.
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.
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 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.
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
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Nordic American Tankers Limited via
Globenewswire
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