HAMILTON, Bermuda, July 7, 2014 (GLOBE NEWSWIRE) —
Introduction: It is now almost six months ago since I sent you a letter, in early January this year. Since then our companies have been through a very busy period which I would like to talk about. This particular letter is sent to shareholders of Nordic American Tankers Ltd (NAT), Nordic American Offshore Ltd. (NAO) and the investor market. NAT and NAO are listed on the New York Stock Exchange – NAT for many years and NAO started trading June 12, 2014 on the NYSE. Following an offering in NAO, NAT owns about 20% in NAO which is specializing in Platform Supply Vessels (PSVs) serving the oil exploration business. I am Chairman and CEO in NAT as before and have assumed the position of Executive Chairman of Nordic American Offshore.
Nordic American Tankers Limited (NAT): The first quarter of 2014 produced very strong results for our suezmax tankers compared with the last quarter of 2013. During 4Q2013 the operating cash flow was $1.9 million. The comparable figure for 1Q2014 was about $27 million, about 14 times up. We know that the tanker market is volatile, the first quarter of 2014 is an indication how it can evolve. 2Q2014 will not produce results at the level with 1Q2014 as the market has fallen back. At the time of this message there is an undercurrent in the market which may lead to increased rates again. Time will tell.
I will point at two things that we see for the first six months of the year. Firstly, NAT is in excellent position to reap immediate financial benefits when the market turns around. Secondly, we have again proven that our fleet is in top technical condition. Furthermore, I am pleased that we, so far this year, have been able to expand our suezmax fleet from 20 to 22 vessels. We shall take delivery of the two new vessels in July and August 2014, respectively.
We are now entering a period in the tanker business during which we can expect that the supply of ships will shrink; i.e. an improved balance between supply and demand may be established. It is many years ago since we had such a position. The recent volatility in the spot market is also indicating a tighter balance between supply and demand.
In April 2014, NAT closed a following offering that brought in approximately $113 million. The proceeds will be used to finance the current acquisitions, bringing the fleet to 22 vessels, and for further expansion of our fleet.
We will very soon announce the NAT dividend to be paid at the end of August. Furthermore, we shall arrange for the extra dividend (dividend-in-kind) to be distributed to NAT shareholders in the form of shares in NAO. The current plan is that shareholders owing 499 shares or less in NAT will be compensated with cash.
Nordic American Offshore Ltd. (NAO):The establishment of Nordic American Offshore and its listing on the Oslo OTC (over the counter) market at the end of last year was a milestone with a fleet of six PSVs. NAO has been further developed during the first six months of this year and four newbuilding contracts have been entered into. The four newbuildings are planned for delivery during the three first quarters of 2015, at which time NAO shall be having 10 vessels in operation. These Platform Supply Vessels (PSVs) are serving the offshore installations in the North Sea. They are all built at the West Coast of Norway at some of the best shipbuilders in the world. As previously announced, NAO was listed and started trading on the New York Stock Exchange June 12, 2014 following an IPO that brought in about $100 million to finance the expansion of the fleet.
The strategy of Nordic American Offshore is based on the same business model as we have in Nordic American Tankers. The involvement of NAT in NAO is expected to boost the dividend for NAT. There are clear synergies between the two companies, in particular as regards general and administrative costs. In a way the two companies are supporting each other. I am very pleased that Tor Øyvind Bjørkli (M.Sc.) has been recruited as CEO of NAO. His broad experience from the offshore business will no doubt be an asset to the development of Nordic American Offshore.
Summary: We are there to serve you in the best possible way. This goes for our friends in Nordic American Tankers and in Nordic American Offshore.
My best wishes for the summer!
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, vessel breakdowns and instances of off-hire, failure on the part of a seller to complete a sale of a vessel to us 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
Nordic American Tankers Limited
Nordic American Offshore Ltd.
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: email@example.com
Tor-Øyvind Bjørkli, Chief Executive Officer
Nordic American Offshore Ltd.
Tel: +47 21 99 24 81 or +47 90 62 70 14
Manager, Investor Relations and Research, Monaco
Tel: + 377 93 25 89 07 or + 33 678 631 959
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Herbjørn Hansson, Executive Chairman
Tel: +1 866 805 9504 or + 47 901 46 291
Press release (PDF): http://hugin.info/201/R/1816213/628085.pdf