Aug. 7, 2009 (Hugin AS) --
Hamilton, Bermuda, August 7, 2009
Nordic American Tanker Shipping Ltd. ("NAT" or "the Company") today
announced its dividend and results for the 2nd quarter of 2009.
The Company is committed to continuing its simple, transparent and
predictable strategy. Over time the fleet must grow faster than the
share count in order to provide for accretion. A full dividend payout
policy and a strong balance sheet are central components of this
strategy. Typically, as in the past, the amount of the quarterly
dividend is related to the level of the spot freight market for
suezmax tankers. Generally, when rates in the suezmax market are
increasing, the dividend can be expected to increase and conversely
quarterly dividend can be expected to decline in a weaker market.
Suezmax spot freight rates were lower in the 2nd quarter than in the
1st quarter of 2009. Going forward, we expect that spot suezmax
freight rates may go up and down in an unpredictable manner.
The Company will pay a dividend of $0.50 per share on or about
September 4, 2009, to shareholders of record as of August 21, 2009.
Following this dividend payment, the Company will have paid a
dividend for 48 consecutive quarters since the autumn of 1997 when
the first three vessels in the Company's fleet were delivered and
commenced operations. Earnings per share (EPS) from continuing
operations for 2Q09 came to $0.09. Non-cash G&A items for the
quarter, including one-time costs in connection with the follow-on
offering in May 2009, constitute $0.09 per share, resulting in net
income of $0.00 per share.
The present instability in the international financial markets is
serious for debt laden shipping companies and some of them are forced
to suspend dividends or change their dividend policy. NAT is staying
its course in this environment - having no net debt. Because of this
exceptionally strong financial situation of the Company - both in
absolute and relative terms - and its sound strategic position going
forward, it has been decided to round upwards the dividend for this
quarter to $0.50 per share which is somewhat more than the operating
cash flow[1].
Our primary objective is to maximize total return[2] to our
shareholders including maximizing the quarterly cash dividend.
The Company does not believe it is in the interest of shareholders to
engage in any type of derivatives.
Highlights:
* The Board of Directors has declared a dividend of $0.50 per share
in respect of 2Q09. For the last four quarters, including the
dividend to be paid for 2Q09, a total of $3.86 has been declared
in dividends, which represents 12.1% of the average daily share
price over the same period.
* Net income for 2Q09 was $0.00 per share based on the weighted
average number of shares outstanding during the quarter,
39,978,227, compared to $0.46 per share for 1Q09. To put this
into perspective, net income was also about zero during the last
two quarters of 2007.
* In 2Q09 total off hire for the Company's fleet was 22 days. There
are no planned dry-dockings for any of the Company's vessels
until 2010 when one vessel is scheduled for dry-docking.
* On May 18, 2009, the Company completed an underwritten public
offering of 4,225,000 common shares which strengthened its equity
by approximately $130 million. This offering increased the
capacity of the Company to make further accretive acquisitions.
* In early May the Company announced that it had agreed to acquire
a 2002 built double hull suezmax tanker. On July 7, 2009, the
Company took delivery of this vessel, named the Nordic Grace,
thereby increasing the fleet by two vessels - to 16 vessels
(including two newbuildings to be delivered) - during the two
first quarters of 2009.
Financial Information:
The Board has declared a dividend of $0.50 per share in respect of
2Q09. In 1Q09 $0.88 per share was declared. The amount of dividends
per share is above all a reflection of the level of the spot tanker
market during the relevant quarter and the number of shares
outstanding. The weighted average number of shares outstanding for
the second quarter 2009 was 39,978,227. The total number of shares
outstanding as of the date of this report is 42,204,904.
With the payment of the dividend in respect of 2Q09, the Company has
for the last four quarters paid dividends in the aggregate of $3.86
per share, representing a yield of 12.1% per annum based on the
average daily share price during the 12 months ended June 30, 2009.
Net income for 2Q09 was -$0.1m, or $0.00 per share (EPS) compared to
net income of $17.2m, or $0.46 per share for 1Q09. Non-cash G&A
items, including one time non-cash costs in connection with the
follow-on offering constitute $0.09 per share. In contrast to other
issue related costs, this non-cash item is booked against the profit
and loss account in the Company's statement of operations. The
Company's operating cash flow was $17.0m for 2Q09, compared to $33.3m
for 1Q09.
We consider our general and administrative costs per day per ship to
be at a low level. We also continue to have a strong focus on keeping
our vessel operating costs low, while always maintaining our
commitment to safe vessel operations.
We estimate that our average cash breakeven level for our 14 existing
vessels is below $10,000 per day per vessel. When the freight market
is above this level, the Company can be expected to pay a dividend.
The breakeven rate is the amount of average daily revenues our
vessels would need to earn in the spot market in order to cover our
vessel operating expenses, voyage expenses, if any, cash general and
administrative expenses, interest expense and other financial
charges.
The Company has no net debt and has an undrawn revolving credit
facility of $500 million. The credit facility, which matures in
September 2013, is not subject to reduction by the lenders and there
is no obligation to repay principal during the term of the facility.
The Company pays interest only on drawn amounts and a commitment fee
for undrawn amounts.
