Hamilton, Bermuda, June 25, 2013
Dear Shareholder,
As Chairman and CEO, I try to keep our shareholders well-informed about developments in your company and the tanker world in general. This is a good time to send you one of my occasional letters, since much is going on in our industry and the world.
The tanker markets remain soft, due primarily to the excess supply of vessels. The longer term outlook, however, is more encouraging. The order book for new vessels is declining and starting in 2014 we expect only a modest number of newbuildings will be launched. We also expect older vessels will continue to be scrapped. Consequently, the suezmax tanker markets should start tightening again.
In early June, we announced that our subsidiary, Orion Tankers Limited, had renewed its commercial agreement with a subsidiary of ExxonMobil Corporation for two years. This important contract demonstrates the oil major`s continued faith in the company`s sound financial position and validates management`s dedication to safety and quality operations of its large, high standard suezmax fleet.
We take pride in how well we maintain our fleet, ensuring the longevity of our vessels. Many operators cannot afford such maintenance in the current market. If you would like to read more about our operations and philosophy on running a business efficiently and with integrity, please take a look at “QUALITY COUNTS,” the cover story in the May/June issue of FORUM, published by DNV. DNV is one of the most prominent classification societies in the world dealing with safety and risk management for ships, offshore units and for industry.
Here is the link:
http://www.dnv.com/resources/publications/dnv_forum/2013/forum_01_2013/Quality_counts.asp
Based upon proceeds from our follow-on offering of shares in April this year and undrawn amounts from our $ 430 million credit facility, the company has the financial resources to expand its fleet, which now numbers 20 ships. Due to extensive delays, we cancelled our acquisition of a 2013 built suezmax tanker in June, with full return of our deposit. But this does not diminish in any way our interest in purchasing additional vessels in this market, as long as it is done in a prudent manner which also could include new buildings.
Our primary objective is to maximize total return to our shareholders, including maximizing our quarterly cash dividend. Over time we have produced a competitive total return for our shareholders and we believe that we are in an excellent position to achieve such results in the future. Nordic American is a company with limited downside and all upside.
Dividend is a central element in our strategy. During the periods of soft tanker markets, the company has paid a modest quarterly dividend. When the markets start tightening again, the dividends can be expected to rise. Our model ensures that the interests of our shareholders and our management are fully aligned. If our shareholders do well, so do management and vice versa. I never comment on the stock price. Let me say,though, that over the recent past I and my immediate family have increased our investment in Nordic American significantly and we are now the largest shareholder of the company.
Going forward, I feel strongly that Nordic American is in the best possible position to navigate the global economic seas, be they calm or stormy. We are privileged to be in a business that the world needs, with a company’s success determined by how well it manages the shifting tides of that world.
Please feel free to contact me personally at herbjorn.hansson@scandicamerican.com to give me any views or suggestions that you may have. It is always refreshing to hear from you.
All the best!
Sincerely,
Herbjorn Hansson
Chairman & CEO
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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,” “will,” “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.
Contacts:
Scandic American Shipping Ltd
Manager for:
Nordic American Tankers Limited
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: nat@scandicamerican.com
Jacob Ellefsen,
Manager, Investor Relations and Research, Monaco
Nordic American Tankers Limited
Tel: + 377 93 25 89 07 or + 33 678 631 959
Rolf Amundsen, Advisor, Norway
Nordic American Tankers Limited
Tel: +1 800 601 9079 or + 47 908 26 906
Turid M. Sørensen, EVP & CFO, Norway
Nordic American Tankers Limited
Tel: +47 33 42 73 00 or +47 90 57 29 27
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223