Bermuda-incorporated Nordic American Tanker Shipping is reporting a weak spot freight market, which has led to the daily rate for Imarex spot freight dropping from an average of $38,004 in the first half of the year to just $16,574 during August.

However, in a letter to shareholders president and CEO Herbjorn Hansson said the company was anticipating a market improvement for the final quarter of the year with tanker daily spot rates rising to around $37,000.

The company has 12 vessels and its break-even daily rate is $9,000 per vessel.

In his letter, Mr. Hansson said: "For nine consecutive years the dividend yield for NAT has been well above 10 percent - a full pay out is the mainstay of our dividend policy."

In the first half of the year the company was able to pay a dividend of $2.41 per share.

The CEO said there was now a "soft" third quarter with the average Imarex spot freight rate per day at $22,481 in July and down to $16,574 last month.

"The general weakness of the spot tanker market rates has continued into September," he said, but pointed to Imarex forward rates for the fourth quarter now standing at $36,878 per day.

"As a matter of policy, we do not predict short terms variations in the spot freight rates. However, we believe that the overall balance between supply and demand is quite tight and small variations in the supply and demand picture could lead to significant rate variations. We are in a position to reap the benefits of an upswing quickly."

Nordic had one of its vessels out of service for 25 days during the third quarter for a scheduled drydock service.

The company has another vessel undergoing steel improvements with an expected loss of 75 income days.

"This implies that we will not have the benefit of more than about 90 percent of our transportation capacity during the third quarter.

"We did advance these dockings timing wise because we saw that spot rates would be softer during the 3rd quarter - it is relatively speaking advantageous to do dry-docking work in a weak market," said Mr. Hansson.

"The position of NAT was significantly strengthened in July following the closing of a public offering of 3,000,000 common shares.

"This offering was a block transaction, whereby the newly issued shares were bought at a mutually agreed upon fixed price by the investment banks of Bear Stearns and Morgan Stanley, which subsequently placed the shares in the market.

"The net proceeds of the offering were used to repay debt on our revolving credit facility and to prepare for further expansion. The offering strengthened the equity of the Company with $120 million and reduced the debt per vessel from $15.5m in June to approximately $6m today."

Nordic intends to continue to operate a modern and homogeneous fleet, focusing on environmentally friendly suezmax tankers with double hulls (one million barrel vessels).

Mr. Hansson said: "Longer-term prospects for the tanker market depend upon developments at the macro-economic level, especially continued growth in Asia, which will result in increased demand for tankers.

"In summary, our main objective continues to be value creation via a transparent, predictable and clear strategic platform based on a unique operating model.

"We encourage investors wishing to have tanker exposure to assess our operating model and to invest in our company."