Nordic American Tanker Shipping Ltd. (NAT) - (NYSE: NAT) Announces 4th Quarter 2004 results
January 26 2005 - 8:00AM
PR Newswire (US)
Nordic American Tanker Shipping Ltd. (NAT) - (NYSE: NAT) Announces
4th Quarter 2004 results HAMILTON, Bermuda, Jan. 26
/PRNewswire-FirstCall/ -- Nordic American Tanker Shipping Limited
(the "Company") today announced its results for the 4th quarter of
2004. The tanker market was significantly stronger in the 4th
quarter of 2004 than in the preceding quarter as reflected in the
Company's cash flow. Based upon the results for the 4th quarter of
2004 the Board has declared a first quarter 2005 dividend of $1.62
per share compared to $1.11 in the preceding quarter and $1.15 in
the first quarter of 2004. The dividend will be paid on or about
February 24th 2005 to shareholders of record as of February 4th
2005. The operating cash flow (*) was $19.8m in the 4th quarter
2004 compared to $11.9m for the 3rd quarter 2004. In the year 2004
the total operating cash flow was $57.0m compared to $34.9m in
2003. The spot market for modern Suezmax tankers in the 4th quarter
of 2004 was exceptionally strong. On average the time charter
equivalent (TCE) for our vessels operated on spot market related
terms during the quarter was approx. $94,000 per day. From this
high level the spot market has declined, but is still at healthy
levels. In October, the Company established a credit facility of
$300m provided by four leading international shipping banks. The
purpose of this facility is to support the expressed growth
strategy of the Company. In November, the Company acquired a fourth
suezmax vessel (1997 built) at a cost of $66m. The ship was
chartered back to its sellers until the end of January 2005, after
which it is expected to be employed in the spot market. In
November, the Company raised $112m (net of issue cost) in a
follow-on public offering. The proceeds of the offering was used to
finance the vessel that was acquired and to repay all outstanding
bank debt. After this equity offering, the Company has 13,067,838
shares issued and outstanding. The Company now has the
responsibility of providing the crew for and of operating and
maintaining three of our vessels. These functions have been
outsourced under our supervision to first class technical managers.
As the Company has assumed responsibility for the operation of the
three ships, quality and cost effective operations are the prime
focus. As the Company has now become an operating company, it is
expected to cease being classified as a "Passive Foreign Investment
Company" for US Tax purposes. This means that under current law,
qualifying dividends, which will be available to our non-corporate
US shareholders commencing in 2006, are expected to be taxed at a
maximum United States federal income rate of 15%, rather than the
current maximum rate of 35%. In reviewing the Company's results for
the 4th quarter, investors should take into account the Company's
changed structure following its transformation from a passive
leasing company into an operating company. One ship was redelivered
from BP in September 2004 and thereafter continued on spot related
time charter to BP. The Company's results for the 4th quarter were
impacted by one-time extra operating costs associated with the
expiry of the bareboat charters with BP for two other of the
Company's ships and the continued employment for one of them to BP
under a spot related time charter. The transformation process also
included the costs of re-chartering one of them to Gulf Navigation
as from November 18, 2004. The total non-recurring costs during the
4th quarter are $10.6 m of which $1.4m is a cash item. In the
accounts $9.2m is a non-cash item being linked to a change in the
compensation scheme for the manager (Scandic American Shipping
Ltd). The original incentive plan adopted several years ago was a
revenue based commission structure. The manager has agreed to amend
the original system and to eliminate the commission. The original
structure has been replaced by a restricted share system in favour
of the manager in order to align the interests of the manager and
the Company. In connection with the transition to an operating
company, the Company adopted a stock incentive plan under which
400,000 shares of the Company was reserved for issuance to
directors, officers and certain key employees of the Company and
the Manager. The initial exercise price of options which may be
issued under the plan will be equal to $38.75 -- the issue price in
the follow-on offering in November 2004. For the foreseeable
future, the Company's Board intends to continue its policy of
maintaining a low debt to equity ratio and of pursuing a high
dividend policy essentially as in the past. Another important part
of our strategic platform is expansion of the fleet of high quality
vessels (**). A clear objective is that all projects that we may
implement in the future are designed to be accretive to earnings
and dividends per share. With the spot market related income from
three vessels, plus the fixed income from the bareboat chartered
vessel, management believes that the Company's fleet is balanced to
maintain a consistent base cash flow while taking advantage of
current spot market rates. Rates may rise from here, they may
remain at the same level or they may drop. Our general view is that
the tanker market dynamics are favourable. (*) Cash flow from
vessel operations is a non-GAAP financial term often used by
investors to measure financial performance of shipping companies.
Operating cash flow represents income before depreciation and
amortization expense. (**) On January 21, 2005 the Company
announced an agreement to acquire a 153,181 dwt 1998 built vessel,
increasing the fleet to five double hull suezmax vessels, of which
three are expected to be in the spot market as from February 1st
and the last vessel acquired is expected to be in the spot market
from end March. Contacts: 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: Web-site: http://www.nat.bm/
Rolf Amundsen Chief Financial Officer 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
Herbjorn Hansson Chairman & CEO Nordic American Tanker Shipping
Ltd. Tel: +1 866 805 9504 or + 47 901 46 291 The 4th quarter 2004
results press release (including tables) can be downloaded from the
following link: http://hugin.info/201/R/977562/144168.pdf
DATASOURCE: Nordic American Tanker Shipping Ltd. CONTACT: Scandic
American Shipping Ltd Manager for, Nordic American Tanker Shipping
Ltd., +47-33-42-73-00, ; or Rolf Amundsen, Chief Financial Officer
of Nordic American Tanker Shipping Ltd., 1-800-601-9079 or
+47-908-26-906; or Gary Wolfe of Seward & Kissel LLP, New York,
USA, +1-212-574-1223; or Herbjorn Hansson, Chairman & CEO,
Nordic American Tanker Shipping Ltd., +1-866-805-9504, or
+47-901-46-291 Web site: http://www.nat.bm/
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