Nordic American Tankers 2Q 2013 Report

MarineLink.com
Monday, August 12, 2013

In announcing its results for the second quarter of 2013, Nordic American Tankers Limited (NAT) emphasized three key points that differentiate it from others in the field: its strong financial position, its dividend policy and its top quality Suezmax tanker fleet.

In July, the company announced a dividend of $0.16 per share for 2Q2013, identical to the dividend for 1Q2013. The company will pay the dividend on or about August 13, 2013 to shareholders of record as of July 31, 2013. The dividend will be paid from cash on hand. Since NAT commenced operations in the fall of 1997, a dividend has been paid for 64 consecutive quarters, with total dividend payments over the period amounting to $44.42 per share including the dividend to be paid in August.

The Suezmax tanker market has improved significantly at the time of this report compared with the average for the second quarter. The third quarter of 2013 can be expected to show an improvement on the second quarter.

The underlying fundamentals of the Suezmax tanker sector show improvement. Political unrest in Egypt and a smaller difference between the price of oil produced in the U.S. (WTI) and the Brent crude price are mentioned as factors leading to higher tanker rates. In 2014 the Suezmax tanker fleet should not increase very much, if at all, as ships are scrapped. In fact the Suezmax fleet stands a good chance of shrinking. Should the current trends in ton miles (volume carried multiplied by distance travelled) continue, fleet utilization could grow in 2014.

The closing of the price gap between WTI (oil produced in the U.S.) and Brent crude (non-U.S. production) tends to stimulate U.S. oil imports and is an example of how tanker market dynamics may change unexpectedly.

Key points to consider:
•    Earnings per share in 2Q2013 was -$0.48 compared with -$0.59 (or -$0.43 excluding non-recurring charges) in 1Q2013 and -$0.15 in 2Q2012.
•    NAT's liquidity reserves including cash, the undrawn part of the credit facility and working capital stood at about $330 million at the end of second quarter.
•    Our agreement with a company in the ExxonMobil group was extended for 2 years - an important vote of confidence from theleading oil company.
•    We continue to focus on cost efficiency - both in administration and onboard our vessels.
•    Spot rates achieved for 2Q2013 were weaker than 1Q2013. Second quarter demand was as usual impacted by refinery maintenance shutdowns. Coupled with continuing deliveries of new vessels from the shipyards, tanker rates were under pressure through the quarter.
•    NAT started the quarter announcing an equity offering that resulted in net proceeds to the Company of $102m. It is a clear sign of faith from the market that the Company was able to complete this transaction at a time of continued uncertainty for many in the tanker industry.
•    "Financial Vetting" and focus on the financial strength of shipowners are increasingly relevant in the tanker industry. During the quarter we saw high-profile bankruptcies, with ensuing disruptions of service. With NAT this is not a concern for charterers.
•    Scrapping has been slower than in 2012. However a number of vessels are approaching their 15 year survey dates. For many owners it may not be feasible to pass the survey due to being in a weak financial position and having insufficient maintenance. Following such developments increased scrapping could incur.
•    The Company does not engage in any type of derivatives.
•    Economic development in Asia remains stable while in Europe the uncertainty continues. Developments in the US are always important - particularly US domestic oil production.
•    The Company cancelled at an insignificant cost the agreement to buy a 2013 built Suezmax tanker as the seller failed to deliver the vessel in time

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Xeneta: No Silver Lining for Container Shipping in Brexit Storm

Xeneta, a  global benchmarking and market intelligence platform for containerized ocean freight, believes that the UK’s decision to leave the European Union will

PALFINGER Finalizes Harding Acquisition

The PALFINGER Group closed the acquisition of 100 percent of the shares in Herkules Harding Holding AS, i.e. the globally operating Harding Group, supplier of lifesaving

ClassNK Amends IGC Code Rules and Guidance

Classification society ClassNK has amended its Rules and Guidance for the Survey and Construction of Steel Ships in response to the latest industry developments,

Tanker Trends

Tanker Allision on the Piscataqua River

The U.S. Coast Guard says it is continuing to monitor the condition of the chemical tanker Chem Venus, after it allided with three unoccupied, moored sailboats

NAT Takes Delivery of Suezmax, Earnings Capacity Up

Nordic American Tankers Limited ("NAT" or "the Company") announced that it today took delivery of a Suezmax vessel, the Nordic Sirius, built at a shipyard in Japan.

BIMCO - Oil Product Tankers Earnings Decline as stockbuilding Slows Down

BIMCO’s expectations remain as the oil product tanker fleet continues to grow with earnings at the lowest since Q3 in 2014. But there is still money to be made in the second half of 2016.

Finance

Baltic Index Rises on Increased Demand Across Segments

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Thursday on higher demand across all vessel segments.

PALFINGER Finalizes Harding Acquisition

The PALFINGER Group closed the acquisition of 100 percent of the shares in Herkules Harding Holding AS, i.e. the globally operating Harding Group, supplier of lifesaving

Beijing Slams South China Sea Court Proceedings

Permanent Court of Arbitration ruling set for July 12. An international court said it would deliver a hotly anticipated ruling in the Philippines' case against

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Naval Architecture Offshore Oil Pod Propulsion Port Authority Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1129 sec (9 req/sec)