Nordic American Tanker Shipping Ltd. (NYSE:NAT) – Announces Dividend and Earnings in Respect of the 2nd Quarter of 2007

 Hamilton, Bermuda, August 9, 2007

Nordic American Tanker Shipping Limited (the “Company”) today announced its results for the 2nd quarter of 2007.  The spot tanker market was sound for our double hull suezmax fleet during 2Q07, enabling the Company to declare a dividend of $1.17 per share for the quarter.  The Company has now declared a dividend for 40 consecutive quarters since the autumn of 1997 when our first three vessels were delivered.  For the last four quarters, including the dividend to be paid for 2Q07, a total of $4.73 has been declared in dividends, which represents 13.2% of the average daily share price over the same period. For nine consecutive years the dividend yield of the Company has been well above 10%. It was a milestone for the Company when the balance sheet was strengthened by $120 million in cash in July when NAT for the first time carried through a so-called bought deal. This transaction brought the equity ratio of the Company to well above 90%, corresponding to about $5 million of debt per ship. This position gives the Company freedom of action and flexibility to expand.
  •        The Board of Directors has declared a dividend of $1.17 per share for the 2nd quarter of 2007.
  •        The dividend is expected to be paid on August 29, 2007, to shareholders of record as of August 17.
  •        Net income for 2Q07 was $0.78 per share based on 26,914,088 shares outstanding during 2Q07.  
  •            Following   the closing of an offering on July 25, 2007, there are 29,975,312 shares issued and outstanding   
               as of August 9, 2007.
  •        During 2Q07 our fleet consisted of 12 modern double hull suezmax tankers.
  •        In 2Q07 total offhire was 25 days related to scheduled drydocking.
  •        The technical management of three of our vessels was transferred to V.Ships Norway AS during 2Q07. Later
  •            in 2007 it is expected that V.Ships Norway AS will technically manage all the vessels of the Company, except
              one which is on long-term bareboat charter. 
  •        We expect to consolidate our commercial operations in the near future.
    Dividends per Share, Earnings per Share and Financial Information:
    When reporting our financial data, it is more meaningful to compare one quarter with the previous quarter than with the quarter one year ago. This is so because of the highly volatile nature of the spot tanker markets.
    Operating cash flow(1) was $34.6 million for 2Q07 compared to $36.1million for 1Q07 and $23.5m for 2Q06.
    The Board has declared a dividend of $1.17 per share in respect of 2Q07. This compares with a dividend of $1.24 per share for 1Q07.  The dividend for 2Q06 was $1.07 per share.
    Net income for 2Q07 was $20.9 million, or $0.78 per share (EPS).  This compares to a net income of $22.8 million or $0.85 per share for 1Q07. In 2Q06, net income was $14.2 million, or $0.68 per share.
    We continue our strong focus on keeping operating costs of our vessels at a low level. Furthermore, our general and administrative costs per day per ship are at a low level compared with other listed shipping companies. However, we note the upward pressure across the shipping industry on vessel operating costs – above all related to crewing costs, lubricating oil costs and repair and maintenance costs.  In addition, during the first half of 2007 increased operating costs stem from once off replenishments to onboard stocks on the three ships we took over in November/December 2006. We expect that cash operating costs during the second half of 2007 will be lower than the first half of 2007.   

    The Company is not involved in freight or interest derivatives.
    Following the offering which was closed July 25, we estimate that our average cash breakeven for our fleet of twelve vessels is approximately $9,000 per day per vessel.  When the freight market is above this freight level, the Company can be expected to pay dividends based on its strategy. The breakeven rate is the amount of average daily revenues for our vessels which would cover our vessel operating expenses, voyage expenses, if any, cash general and administrative expenses, interest expense and other financial charges.
    At the end of 2Q07, our net debt was approximately $15.5 million per vessel. The offering in July strengthened our balance sheet with $120 million in cash, reducing our debt to about $5 million per ship. As of August 9, 2007, we have approximately $435 million undrawn under our $500 million revolving credit facility with maturity in 2010.  There is no repayment obligation during the term of the facility, and the Company pays interest only on drawn amounts, and a commitment fee for undrawn amounts. We have commenced discussions with the banks to extend the maturity of this credit facility.  
    In 3Q07 two vessels are expected to be in scheduled drydock with an expected 40 days out of service between them. In connection with its 10-year special survey, another vessel has been undergoing steel improvements causing an expected loss of income of about 75 days in 3Q07. The extra steel investments are not expected to impact dividends going forward and will be depreciated as capital costs. We do not expect that the same type and amount of steelwork will be required on other of our vessels in connection with scheduled drydockings.
    The table below shows the number of vessel revenue days over the last ten quarters for all our vessels, reflecting the growth of the Company.

    Revenue days
    For further details on our financial results, please see later in this release.
    The Fleet:
    Eleven of the Company’s 12 vessels are trading in the spot market or on spot related terms, while one vessel remains employed on a long-term fixed rate charter.
    By way of comparison, at the end of 2004 the Company had four vessels; at the end of 2005 the Company had eight vessels; and at the end of 2006 the Company had 12 vessels. During 2Q07, we also had 12 vessels in operation.

    Vessel                         Dwt *           Employment
    Gulf Scandic          151,475            Long term fixed charter
    Nordic Hawk          151,475              Spot related terms
    Nordic Hunter         151,400              Spot related terms
    Nordic Voyager      149,591              Spot
    Nordic Fighter         153,328              Spot
    Nordic Freedom      163,455              Spot
    Nordic Discovery    153,328              Spot
    Nordic Saturn          157,332              Spot
    Nordic Jupiter          157,411              Spot
    Nordic Cosmos       159,998              Spot
    Nordic Moon           159,999              Spot
    Nordic Apollo          159,999              Spot
    Total         1,868,791
    * Scantling draft is the maximum draft at which a vessel complies with the governing strength requirements of classification societies
    We are currently a member of several tanker pools. We expect that a consolidation will take place in this sector, which is expected to create synergies through economies of scale, resulting in a positive impact on our overall results. At the same time we have decided to simplify and consolidate our technical operating functions. The ship management firm of V.Ships Norway AS is expected to manage 11 of our vessels later in 2007 compared with five vessels earlier this year. The changeover will incur one-time costs but the consolidation will facilitate more efficient crew rotation and economies of scale among our vessels leading to cost improvements.
    The Market:
    The average spot market rate, according to the Imarex Tanker Index, was $34,174 per day for 2Q07 compared to $41,877 per day for modern suezmax tankers during 1Q07. The average rates for our spot vessels were about $44,000 per day net to us. The market was sound for our suezmax vessels during 2Q07 while about $1,000 per day lower than in 1Q07. We expect that rates may be softer in 3Q07 than in 2Q07 reflecting a normal seasonal downturn during this time of the year. The supply and demand picture is still finely tuned. Typically, rates during the fourth quarter may be expected to strengthen.  We expect that freight rates may continue to fluctuate significantly. 
    The world’s suezmax fleet stood at 351 vessels at the end of the 2Q07, compared to 352 vessels at the end of 1Q07.  13 new vessels were delivered during 1H 2007 while four vessels were scrapped.  A further 13 vessels are scheduled to be delivered from the shipyards in 2H 2007; while the total suezmax orderbook stood at 133 vessels at the end of the June 2007. At the same time, 62 vessels were single hull (Source: Fearnresearch).  A further weakening of single hull earnings has continued into 2007 as customers prioritize double hull tonnage. The single hull vessels are expected to be phased out from the tanker trade by 2010 due to international legislative changes. We believe that this development is advantageous for our Company, which owns only double hull tankers. Following the strength of the offshore oil industry and the dry cargo market, both suezmax vessels and very large crude carriers are withdrawn from the tanker market as they are converted to other purposes – such as offshore vessels and bulk carriers. Since January 2006 and up to end 2007 about 7.5 million tons of tanker tonnage are scheduled for conversion to non tanker purposes. (Source: R.S. Platou Research). This development impacts the tonnage balance positively, with the equivalent of a deletion of 50 suezmax tankers or 25 very large crude carriers (or some permutation of these) from the world tanker fleet.
    Going forward, deliveries of new tankers from shipyards over the next few years can be estimated with a high degree of certainty.  The shipyards are expected to operate at more or less full capacity with their present orderbooks, and new orders placed for suezmax tankers are typically for delivery in 2011 or later.
    The tanker market in the longer term is essentially a function of supply and demand for tanker tonnage. In addition to the supply of new vessels from the ship yards, adjusted  for phasing out single hull tonnage and for other deletions, the level of the tanker market in the foreseeable future is above all dependent on the development of the world economy.
    Strategy going forward:
    The operations of the Company are based on its unique and successful operating model which combines our transparent and predictable full dividend payout policy with high spot market exposure and a strong balance sheet. A strong balance sheet and a low cash break even for operations enable us to maintain our dividend policy, thereby providing for a competitive yield compared with other shipping companies.  
    We focus on a cost effective management of the Company, both in regard to the operating expenses of the vessels and general and administrative expenses, in order to maintain a low cash break-even level of operations. The consolidation of our participation in pools and of technical management functions is expected to create synergies, impacting positively the overall results. 
    The Company’s exposure to the spot market is based on our analysis showing that the spot market over time can be expected to produce higher revenues on average than the time charter market.  With our strong balance sheet and our well-defined operating model, we believe it is an inefficient use of capital to accumulate cash reserves on the balance sheet.  A certain amount of term charter coverage is being contemplated from time to time.
    The recent offering in July, strengthening the equity of the Company by $120 million cash, will prepare the Company for expansion, either via the second-hand market or newbuildings or a combination of these alternatives.
    The main objective of the Company is to maximize its total return(2) for shareholders via a transparent, predictable and simple strategic platform.  In our communications with the market, we encourage investors wishing to have tanker exposure to assess our operating model and to invest in our Company.  Accretive growth continues to be an inherent part of our operating model and further expansion can be expected.  The expansion of the Company bolsters its earnings and dividend capacity per share. 
    * * * * *
    (1)  Operating cash flow is a non-GAAP financial term often used by investors to measure financial performance of shipping companies.  Operating cash flow represents income from vessel operations before depreciation and non-cash administrative charges.  Please see page 6 for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
    (2)  The total return is based on the price for our common shares plus dividends reinvested in our common shares.
    Matters discussed in this press release may constitute forward-looking statements.  The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business.  Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
    The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation.  The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
    The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties.  Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.  We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
    Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC’s petroleum production levels and world wide oil consumption and storage, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission, including the prospectus and related prospectus supplement, our Annual Report on Form 20-F, and our reports on Form 6-K.
    Scandic American Shipping Ltd 
    Manager for:
    Nordic American Tanker Shipping Ltd.
    P.O Box 56, 3201 Sandefjord, Norway
    Tel: + 47 33 42 73 00 E-mail:
    Rolf Amundsen, Investor Relations
    Nordic American Tanker Shipping Ltd.
    Tel: +1 800 601 9079 or + 47 908 26 906
    Gary Wolfe
    Seward & Kissel LLP, New York, USA
    Tel: +1 212  574 1223
    Herbjørn Hansson, Chairman & CEO
    Nordic American Tanker Shipping Ltd.
    Tel:  +1 866 805 9504 or + 47 901 46 291
    The full press release including tables can be downloaded from the following link:

    2nd quarter 2007 Results