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Nordic American tops $1b market cap value

Nordic American Tanker Shipping fleet

Market capitalisation of Bermuda-registered Nordic American Tanker Shipping has topped $1 billion for the first time reflecting the growth in the company's fleet of tankers from four in 2004 to 12 at the end of last year.

It made a profit of $22 million in the first three months of this year, compared to $19.1m year-on-year.

The company has just announced a first quarter dividend of $1.24 per share, which brings the total dividend for the past year to $4.63 representing 13.5 percent of the average daily share price for the company in the past 12 months.

Nordic American now has 12 double hull suezmax tankers and is concentrating its business on the less predictable "spot market" rather than contract/charter market.

Because of the generally volatile nature of the spot market for tankers Nordic American places more emphasis on comparisons between consecutive financial quarter results rather than year-on-year. Its fourth quarter profits for 2006 were $13.9m compared to this quarter's $22m.

According to the company's latest statement it has an average break-even point for its 12 vessels of $9,500 per vessel per day. Currently the spot market for tankers is generating around $40,000 per vessel per day.

Nordic American lost the use of one of its tankers during the first quarter of 2007 for 26 days due to a scheduled 10-year special survey. It will also have another of its ships in dry dock for approximately 20 days during the second quarter of 2007 for scheduled work.

Of its 12 vessels the only one operating on a long term fixed contract as opposed to spot market operations is the 151,475 ton Gulf Scandic.