Link to the complete 4th Quarter 2016
report: http://hugin.info/159489/R/2085731/786792.pdf
Hamilton, Bermuda, March 7, 2017.
We are very pleased that Nordic American
Offshore successfully closed a follow-on offering March 1, 2017,
strengthening the capital base with net proceeds of about $47.7
million and positioning NAO for further expansion. The proceeds
could end up in excess of $50 million, provided the over-allotment
option is wholly or partly exercised (maximum about $7 million).
The offering clearly reflects the investor confidence in NAO.
Access to financing, both equity and debt, remains a competitive
advantage for us.
The Executive Chairman of NAO, plus senior
executives of the Nordic American companies have bought shares in
this offering. Our objective is that NAO shall become a success
like the NYSE listed Nordic American Tankers (NAT), servicing
customers and shareholders well. The corporate features of NAO are
similar to the successful structure of NAT. Our belief in NAO is
evidenced by the fact that the Executive Chairman and his immediate
family invested $2 million in the offering. Furthermore, NAT, our
largest shareholder, invested $10 million. Existing shareholders
wishing to avoid dilution, have the opportunity to buy stock.
Going forward, this successful offering has as
an objective to stimulate the growth process of NAO of modern PSVs,
servicing the oil industry, above all in the UK and Norwegian
sector of the North Sea. As NAO increases its fleet, we may expand
into other geographical areas internationally - the potential for
earnings and dividends is substantial.
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. The NAO
customers and shareholders are our most important partners. We have
seen an improvement in PSV rates the last weeks. At the time of
this report, rates for 1Q2017 are above the level of 4Q2016.
The Board has declared a dividend of $0.02 per
share for 4Q2016 to shareholders on record as of March 21, 2017.
The payment of the dividend is expected to take place on or about
April 5, 2017. Since its original establishment in late 2013, NAO
has paid dividends for 12 consecutive quarters, totalling $2.59 per
share, including the dividend to be paid on or about April 5,
2017.
Key points to consider:
- NAO successfully completed a follow-on offering March 1, 2017,
greatly strengthening the capital base. At the time of this report,
the outstanding number of shares is 60,686,847.
- The accounting net results show the following: -$9.8m for
4Q2016, -$8.6m for 3Q2016 and -$4.4m for 4Q2015. Earnings per share
(EPS): -$0.48 for 4Q2016, -$0.42 for 3Q2016 and -$0.19 for 4Q2015.
EPS does not take into account financial risk, i.e., the debt level
of a company.
- Adjusted Net Operating Earnings[1]: -$4.3m for 4Q2016, -$3.4m
for 3Q2016 and -$0.1m for 4Q2015.
- NAO has a cash breakeven level of about $11,500 per day per
trading vessel, including financing and G&A costs.
Financial Information
The Board has declared a cash dividend of $0.02
per share for 4Q2016 to shareholders of record as ofMarch 21, 2017.
The payment date is on or about April 5, 2017.
Net results (accounting wise) were -$9.8m in
4Q2016. In 3Q2016 and 4Q2015 the comparable amounts were -$8.6m and
-$4.4m, respectively.
The Company's Adjusted Net Operating Earnings
were -$4.3m in 4Q2016 (cash development). In 3Q2016 and 4Q2015
Adjusted Net Operating Earnings were -$3.4m and -$0.1m,
respectively.
Following the equity offering in early March,
our net debt is $8.5m per vessel.
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 proportionally.
For further details on our financial position
for 4Q2016, 3Q2016 and 4Q2015, 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 essentially 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 satisfactory Total Return[2] 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/2085731/786792.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:
Turid M. Sørensen, CFO
Nordic American Offshore Ltd. Tel: +47 33 42 73 00 or +47 90 57 29
27 |
Herbjørn Hansson,
Executive Chairman Nordic American Offshore Ltd. Tel:
+1 866 805 9504 or +47 90 14 62 91 |
Marianne Lie, Executive
Vice Chair Nordic American Offshore Ltd. Tel.: +47 91 64 55
06 |
Gary J. Wolfe Seward &
Kissel LLP New York, USA Tel: +1 212 574 1223 |
|
|
Web-site: www.nao.bm |
|
[1] Adjusted Net Operating Earnings (cash development), is an
important dimension in the shipping industry, but it is a non-GAAP
measure. Please see later in this announcement for a reconciliation
of Adjusted Net Operating Earnings to Net Operating Earnings.
[2] Total Return is defined as stock price plus dividends,
assuming dividends are reinvested in the stock.
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/4680a77e-5fd1-4dad-83a8-702bd948e197
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