Nordic American Tankers reports $14.9m loss
Nordic American Tankers Ltd made a loss of $9.3 million in the first six months of the year, after its second quarter loss of $14.9 million soaked up the $5.6 million profit achieved in the first three months of 2019.
The six-month figure is an improvement on the $46.8 million loss reported for the corresponding period last year.
The Bermudian-headquartered company, which has a fleet of 23 Suezmax tankers, has reported improving time charter rates for the first six months of the year, which were $20,414 per day per ship, compared to $10,850 a year ago.
Nordic American has entered into a 12 to 15 month time charter with energy company Equinor. The contract started this month.
In February, the company fully refinanced by borrowing $306 million in a five-year agreement, which allowed it to retire debt from three other lenders.
Nordic American said its debt level has always been among the lowest in the industry, and its board is focusing on reducing the debt level to that which it maintained a few years ago.
Commenting on the world economy and the tanker market, the company said in a statement: “What is good for the world economy and world trade is by nature positive for the crude oil tanker business.
“It is important to note, in light of trade war headlines currently, that political uncertainty can be a positive for tanker shipping, as inefficiencies in the energy logistical chain stretches the tanker fleet (storage, delays, different trade patterns, etc) and subsequently limits supply of tankers.”
The worldwide fleet of Suezmax tankers was 517 at the end of June. Last year 28 new vessels were delivered from shipyards, while 21 were scrapped. A similar number of new vessels is expected to join the global fleet this year, and 22 more are scheduled for next year.
Nordic American said: “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.”
The company announced a one cent dividend to be paid next month to shareholders of record on August 30. It will be Nordic American’s 88th consecutive quarterly dividend.
Later this year the company intends to introduce a one-to-five reverse stock split.
• Disclosure: the author owns shares in Nordic American Tankers
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