Nordic American Tankers' 2Q Report

By Michelle Howard
Monday, August 11, 2014

Cash  dividend of $0.12 and dividend-in-kind of NAO shares declared (worth $0.16/sh). Operational performance remains strong as  fundamentals improve.

 

The strong winter market at the beginning of the year subsided in 2Q2014. Refinery maintenance schedules and geopolitical factors affected our results this quarter in a weaker spring market. However, there are now reaffirmed indications that a recovery may be on the horizon. 3Q2014 has started on a more positive note than 2Q2014. The spikes in rates seen this year are a sign that the crude oil tanker market is becoming more balanced. During 2Q2014 we had cashflow from operations1 of $4.3m, compared with $27.1m in 1Q2014, -$10.6m in 2Q2013 and -$4.9m in 1Q2013.

 

 During 2012 and 2013, when the market was weak, we used the opportunity to place ships in planned drydock for maintenance to ensure the continued top technical quality of our vessels. During drydockings the classification societies certify the seaworthiness of our vessels, giving us confidence that the quality of our vessels ranks with the best in the industry. In 2014, NAT has undertaken two scheduled drydockings, both completed at the time of this report.

 

In June 2014 Nordic American Offshore Ltd. (NAO) completed a successful public offering of shares and was listed on the NYSE. Subsequently, the shares issued in the NAO November 2013 private placement in Norway were transferred to the NYSE. NAT participated in the NAO NYSE offering with $5.6m. Following the share distribution of NAO shares to NAT shareholders, NAT will own about 17% of NAO. At the time of this release, following the dividend-in-kind distribution to NAT shareholders, NAT has an unrealized gain of about $12m related to the investment in NAO. Our investment in NAO has a positive impact both accountingwise and cashwise.

 

On July 11, 2014, NAT declared a cash dividend of $0.12 per share payable to NAT shareholders of record as of July 25, 2014. The dividend is expected to be paid on or about August 12, 2014. In addition, as previously communicated, the dividend-in-kind with a value of about $0.16 per share will also be distributed to NAT shareholders in the form of NAO shares at about the same time. Since NAT commenced operations in the fall of 1997, the company has paid a dividend 68 times, with total dividend payments over the period amounting to $45.02 per share, including the dividend to be paid in August 2014.

 

In June and leading into July the market rebounded as refineries came back on line after scheduled maintenance and the so-called contango returned to the Brent crude market.

 

Key points to consider:

  •   Tanker rates achieved on average for 2Q2014 were $12,100 per day per vessel for our trading fleet, as against $26,300 per day achieved in 1Q2014.
  •   The company agreed to acquire two additional Suezmax vessels in June, bringing the fleet to 22 vessels. The vessels were delivered to us July 16 and August 4, respectively.
  •   Earnings per share in 2Q2014 was -$0.19, compared with $0.05 in 1Q2014, -$0.48 in 2Q2013 and -$0.59 for 1Q2013.
  •   On April 7, 2014, NAT announced an equity offering that resulted in net proceeds to the company of $113m.
  •   The undrawn part of our credit facility plus net working capital stood at about $387m at the end of 2Q2014.
  •   We continue to focus on cost efficiency - both in administration and  onboard our vessels.
  •   13 vessels were vetted (inspected by customers) during 2Q2014. NAT came out with excellent results, reflecting the quality of our fleet.
  •   NAT received a dividend of about $2.0m from its investment in NAO. It is expected that NAO will continue to produce dividends for NAT. NAO also contributes to reducing NAT's general and administrative costs.

 


People & Company News

STX to Slash Jobs, Sell Yard

To stat above water by restructuring, South Korean Shipbuilder STX Offshore & Shipbuilding Co. plans to lay off about a third of its workforce and sell a yard in France, says a report in WSJ.

Kongsberg Performs Well in Q2

Norwegian defence and marine technology company Kongsberg Gruppen's second quarter 2016 (Q2) financial results shows sales performance broadly in line with recent trends,

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

Tanker Trends

Hellenic Petroleum Profits Rise on Higher Exports

Hellenic Petroleum, Greece's biggest oil refiner, posted a 20 percent rise in second-quarter core profit on Thursday, with higher exports offseting lower refining margins.

Alfa Laval Launches DuroShell LPG/E Cargo Condenser

With the new Alfa Laval DuroShell plate-and-shell heat exchanger, Alfa Laval aims to strengthen its offering in LPG/E cargo reliquefaction with a construction that

Navy Discovers Malaysian Tanker

Indonesia's navy has found a tanker carrying almost US$400,000 worth of diesel that was taken by its own crew last week due to a commercial dispute, says a report in AFP.

Ship Sales

STX to Slash Jobs, Sell Yard

To stat above water by restructuring, South Korean Shipbuilder STX Offshore & Shipbuilding Co. plans to lay off about a third of its workforce and sell a yard in France, says a report in WSJ.

Croatia’s Jadrolinija to Buy New Passenger Ship

Croatia’s  largest national passenger shipping company Jadrolinija plans to expand its fleet with a new passenger ship, with the total cost of about 50 million euros, reports Poslovni.

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

Finance

SOS from Hanjin Shipping

The creditors' extended help is crucial for survival of Hanjin Shipping Co as its negotiations with owners of chartered ships over a cut in leasing rates and to

NParks, Keppel in S$2.08 mln Partnership for Restoring Singapore Forest Wetlands

The National Parks Board (NParks) and Keppel Corporation today unveiled plans for a partnership to restore the freshwater forest wetland ecosystem historically

Skaugen Goes to Red Again

Norwegian Marine Transportation Service Company I.M. Skaugen SE reported interim losses but cautiously positive and expecting a gradual recovery of trading opportunities

Fuels & Lubes

C-Job Designs Flettner Freighter for Switijnk

The Dutch shipping company family Switijnk has contracted C-Job Naval Architects to develop a Rotor Sail-equipped design to meet their specific loading and sailing profile.

Vitol's Malaysia Terminal Suspends Ops after Spill

VTTI, the storage unit of world's largest oil trader Vitol, has suspended operations at its terminal in southern Malaysia following an oil spill, two industry sources said on Friday.

Viking Grace Marks 1,000 LNG Bunkering Milestone

From the very beginning, the M/S Viking Grace – delivered in January 2013 – was an environmental milestone.   The vessel attracted global attention as an environmental

News

Coast Guard Foundation Awarded 128 Scholarships

The Coast Guard Foundation, a non-profit organization committed to the education and welfare of all Coast Guard members and their families, announced today that

Keppel to Deliver First North Sea FPSO

Keppel Offshore & Marine (Keppel O&M)'s wholly-owned subsidiary Keppel Shipyard Ltd (Keppel Shipyard) is on track to deliver a Floating Production Storage and Offloading

NASA May Send Submarine to Titan

NASA has unveiled plans to send a submarine into the depths of the largest ocean of Saturn's biggest moon, Titan in a bid to explore the depths of its largest ocean.

Vessels

C-Job Designs Flettner Freighter for Switijnk

The Dutch shipping company family Switijnk has contracted C-Job Naval Architects to develop a Rotor Sail-equipped design to meet their specific loading and sailing profile.

Damen Trading Sale hits 500th Vessel

30 years and 500 vessels later, Damen Trading is just getting started. Damen Trading’s story begins in 1986, with Damen Shipyards Group responding to growing market demand for used vessels.

Matson Orders Two ConRo Ships from NASSCO

Matson Navigation Company, Inc., a subsidiary of container shipper Matson, Inc., has signed a contract with U.S. shipbuilder General Dynamics NASSCO to build two

 
 
Maritime Contracts Maritime Security Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
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: 0.1189 sec (8 req/sec)