Nordic American Tankers reports $7.5m loss
Bermudian-based Nordic American Tankers does it not expect the US presidential election to have a negative effect on its operations, it said in a statement.
It added that it “will increase earnings capacity substantially” as it expands its fleet of Suezmax oil tankers from 30 to 33.
The company expects to take delivery of three newly built tankers in the second half of 2018. It has entered into an agreement with Samsung Heavy Industries for the construction of the new tankers.
Nordic American made a public offering of 11 million common shares in the third-quarter, which along with an option for about one million common shares that was exercised by the underwriters, gave the company a $120 million boost. Seventy per cent of the placement was subscribed by institutional investors.
The capital allowed the company to enter into the agreement with Samsung for the new tankers.
During the third-quarter, Nordic American Tankers made a loss of $7,574,000, compared with a profit of $25.8 million for the same period in 2015. It made a profit of $12.9 million in the second-quarter of 2016.
The company has a cash break-even rate below $11,000 per day per ship. During the third-quarter it had average daily rates of $16,700 per vessel, and it is reporting that 60 per cent of the available days in the fourth-quarter will attract daily rates “significantly higher” than the third-quarter average.
The firm, which operates a homogenous fleet, increased its dividend by one cent in the third-quarter, having reduced the dividend by 18 cents the previous quarter. It is the seventy-seventh time it has paid a quarterly dividend since 1997.
Nordic American's operating cash flow was $21.7 million in the third-quarter, or 24 cents per share, compared with 46 cents per share in the second-quarter, and 55 cents per share for the third quarter of 2015.
In a statement, the company said: “NAT is not in the dry cargo or container sectors, which have challenges. We are engaged in transportation of crud oil only.
“The development of the world economy affects the tanker industry. A low oil price is stimulating the world economy which is positive for the tanker market.”
Disclosure: the writer owns shares in Nordic American Tankers