Nordic chairman, Herbjorn Hansson
, in a letter to shareholders, believes that the tanker markets remain soft, due primarily to the excess supply of vessels; but the longer term outlook is more encouraging.
Extracts from the letter are as follows:
"The order book for new vessels is declining and starting in 2014 we expect only a modest number of newbuildings will be launched. We also expect older vessels will continue to be scrapped. Consequently, the suezmax tanker markets should start tightening again.
In early June, we announced that our subsidiary, Orion Tankers Limited, had renewed its commercial agreement with a subsidiary of ExxonMobil Corporation for two years. This important contract demonstrates the oil major`s continued faith in the company`s sound financial position and validates management`s dedication to safety and quality operations of its large, high standard suezmax fleet.
Based upon proceeds from our follow-on offering of shares in April this year and undrawn amounts from our $ 430 million credit facility, the company has the financial resources to expand its fleet, which now numbers 20 ships. Due to extensive delays, we cancelled our acquisition of a 2013 built suezmax tanker in June, with full return of our deposit. But this does not diminish in any way our interest in purchasing additional vessels in this market, as long as it is done in a prudent manner which also could include new buildings.
Going forward, I feel strongly that Nordic American is in the best possible position to navigate the global economic seas, be they calm or stormy."