Link to the complete 1st Quarter
2019 report: http://hugin.info/201/R/2244420/886311.pdf
Hamilton, Bermuda, May 14, 2019
Highlights:
-
1Q2019 was a busy quarter and also saw the best
result for NAT since 2Q2016
-
With this report we announce our 87th
consecutive quarterly distribution. The dividend is 0.03 cents per
share payable on June 12, 2019, to shareholders on record May 28,
2019. It is our objective to increase the dividend as tanker
markets improve.
-
the TCE (time charter equivalent) for our
vessels in 1Q2019 saw an improvement of 30% from the previous
quarter and came in at an average of $26,025 per day per ship
compared to $20,100 in 4Q2018.
-
The Net profit for 1Q2019, (after depreciation,
G&A and finance charges) totaled $5.6 million compared to a net
loss of $10.5 million in 4Q2018 and a net loss of $19.7 million in
1Q2018. This was $16.1 million better than the previous quarter and
$25.3 million better than same quarter last year. This is a
substantial improvement and gives us a strong start to the
year.
-
the net operating earnings improved by $12.9
million from the previous quarter totaling $18.3 million for 1Q2019
compared to $5.4 million in 4Q2018.
-
A better reflection of the company's cash
generation, The Adjusted Net Operating earnings[1] was $34.3
million for 1Q2019 compared to $23.6 million in 4Q2018 and $4.4
million in 1Q2018. 1Q2019 was $10.7 million better than the
previous quarter and $29.9 million better than the same quarter
last year.
-
We made net cash repayments of our debt of $17.7
million during the quarter and our net debt at March 31, 2019 stood
at $341 million equal to $14.8 million per
vessel.
-
During 1Q2019 we refinanced our credit facility
with a $306 million secured loan and registered a $40 million ATM.
Together with our 3 vessels delivered and financed last year, we
now have a financial structure in place for all of our 23 vessels
with better flexibility and longer maturities than we had only a
few months ago.
-
Later in this report we have included relevant
financial information for NAT 1Q2019 and for other periods.
-
We expect to see volatility in the tanker market
during 2019 due to refinery adjustments that must be made to meet
the new fuel regulations that come into full effect from 2020.
these adjustments will be positive for tanker demand and we expect
2019 to be a better year than 2018. With the majority of our fleet
in the spot market, NAT is well positioned for an improving tanker
market in the coming years.
Our Fleet
Our fleet consists of 23 well
maintained Suezmax tankers with an aggregate cargo capacity of 23
million barrels of crude oil, illustrating the size of NAT. The
average age of our fleet is about 11 years; 10 units were built
from 2010 onwards, 13 units were built between 2000 and 2009.
The outcome of the inspections of
our ships by oil companies ("vetting") reflects the good quality of
our fleet.
NAT has one of the largest fleet
of Suezmax tankers in the world. In a capital intensive industry
like ours, timing and financing are the key issues to achieve a
sound cost structure.
Financing
Our fleet is financed through two
financing arrangements; the $306 million 5-year senior secured
credit agreement with CLMG Corp., funded by Beal Bank of Dallas,
Texas and the Ocean Yield financing for our 3 vessels delivered
last year. Both financing arrangements contain an element of
down-payment that will reduce our debt going forward, while still
maintaining our flexibility to distribute generous dividends in
improving tanker markets.
The debt level of NAT has always
been among the lowest in the industry. The NAT board has focus on
further reducing the debt to a level that NAT maintained a few
years ago.
We made net cash repayments of our
debt of $17.7 million during the quarter and our net debt at March
31, 2019 stood at $341 million equal to $14.8 million per
vessel.
During 1Q2019 we also registered a
$40.0 million At-the-Market issuance agreement (ATM). This facility
was established to ensure we have financial flexibility at all
times. As of the date of this report, no shares have been issued
under this agreement.
Dividend
For 1Q2019 a cash dividend of
$0.03 per share has been declared. This represents 75% of our
Earnings Per Share in the quarter. Payment of the dividend is
expected to be on or about June 12, 2019, to shareholders of record
on May 28, 2019.
In an improved tanker market,
higher dividends can be expected.
Nordic American
Offshore Ltd. (NYSE: NAO)
At the date of this report, major
steps have been taken by new shareholders in NAO, introduced and
welcomed by NAT's Chairman & CEO, to secure a robust financial
structure to take the Company through the challenging market. After
a series of transactions by the new investors, aimed at
strengthening NAO's balance sheet, NAT now owns 5.33% and the NAT
Chairman & CEO and his immediate family owns 4.11% of Nordic
American Offshore Ltd. The NAO shareholding is no longer classified
as a capital asset in our accounts, but is recorded as an
investment security. We remain supportive to the new shareholder
and management of NAO.
World Economy and
the Tanker Market
The world economy is enjoying its
strongest upswing since 2010. What is good for the world economy
and world trade is by nature positive for the crude oil tanker
business. In addition to the role of major oil companies, large oil
traders have become important for the tanker industry.
The world Suezmax fleet (excl.
shuttle, product & Jones Act tankers) counts 514 vessels at the
end of 1Q2019. The total delivery during 2018 was 28 vessels.
For 2019 we expect a similar number of vessels as in 2018, and in
2020 we currently see 22 vessels scheduled for delivery. During
2018, 21 Suezmax vessels were scrapped.
The supply of tanker tonnage is
inelastic in the short-term. When there are too many ships in an
area, rates tend to go down. When there is scarcity of ships, rates
tend to go up. Short-term spot tanker rates may be expected to be
volatile.
Corporate
Governance/Conflict of Interests
It is vital to ensure that there
is no conflict of interests among shareholders, management,
affiliates and related parties. Interests must be aligned. From
time to time in the shipping industry, we see that questionable
transactions take place which are not in harmony with sound
corporate governance principles, both as to transparency and
related party aspects. We have zero tolerance for corruption.
Strategy going
forward
The NAT strategy is built on
expanding and maintaining a homogenous and top quality fleet,
leveraging on our industry network and close customer relationships
with big oil. Employment of our ships with big oil is a
priority.
A strong balance sheet, combined
with a homogenous fleet and economies of scale is giving a low cash
break-even level, enabling NAT to distribute free cashflow to our
shareholders.
This strategy will benefit in both
a strong tanker market and in a weak one. In an improved market,
higher dividends can be expected and vice versa.
Our dividend policy should
continue to enable us to achieve a competitive cash yield.
Our fleet of 23 more or less
identical vessels is a special feature of NAT that is particularly
valuable to our customers.
NAT is firmly committed to
protecting its underlying earnings and dividend potential. We shall
safeguard and further strengthen this position in a deliberate,
predictable and transparent way.
*
* * * *
Link to the graph: http://hugin.info/201/R/2244420/886311.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," "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 worldwide 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: |
|
Gary J. Wolfe
Seward & Kissel LLP
New York, USA
Tel: +1 212 574 1223
|
|
Bjørn
Giæver, CFO
Nordic American Tankers Limited
Tel: +1 888 755 8391 or +47 91 35 00 91 |
|
Herbjørn Hansson, Chairman & CEO
Nordic American Tankers Limited
Tel: +1 866 805 9504 or +47 90 14 62 91 |
|
|
|
Web-site: www.nat.bm |
|
[1] Adjusted Net
Operating Earnings (Loss) represents Net Operating Earnings or Loss
before depreciation and non-cash administrative charges. Please see
later in this announcement for a reconciliation of non-GAAP
financial measures and Adjusted Net Operating Earnings (Loss).
Press Release (PDF)
This
announcement is distributed by West Corporation on behalf of West
Corporation 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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