Nordic American Tankers Ltd (NYSE: NAT) – Report as per December 31, 2023 – Dividend is up and solid prospects going forward
- NAT's Net Voyage Revenue for 2023 reached $262.2 million, up from $168.8 million in 2022.
- The net profit for NAT in 2023 was $98.7 million, a substantial improvement from $15.1 million in 2022.
- The dividend for the fourth quarter of 2023 will be 12 cents per share, doubling from the previous quarter.
- NAT achieved an average Time Charter Equivalent (TCE) of $41,580 per day per ship for spot vessels in Q4 2023.
- The total average NAT TCE, including vessels on term contracts, was $39,170 per day per ship.
- The dividend is payable on April 10, 2024, to shareholders on record as of March 20, 2024.
- None.
Insights
The substantial increase in Net Voyage Revenue for Nordic American Tankers Ltd (NAT) from $168.8 million in 2022 to $262.2 million in 2023 indicates a robust year-over-year growth. This growth has translated into a significant rise in net profit, which has surged from $15.1 million to $98.7 million. Such a leap in profitability is noteworthy, especially in the volatile shipping industry, where factors like fluctuating oil prices, changing trade patterns and geopolitical tensions can dramatically affect earnings.
The announcement of a higher dividend, now at $0.12 per share for the fourth quarter, is a strong signal to shareholders of NAT's financial health and management's confidence in the company's cash flow stability. The consistency of NAT's dividend payout, marked by the 106th consecutive quarterly dividend, is a persuasive factor for income-focused investors. However, it's important to scrutinize the sustainability of these dividends in the context of the company's free cash flow and potential reinvestment opportunities for further growth.
The reported average Time Charter Equivalent (TCE) rate of $41,580 per day per spot vessel and the overall average TCE of $39,170 per day per ship for NAT during the fourth quarter of 2023 is a critical performance metric. TCE rates are a standardized measure used in the shipping industry to compare the revenue performance of a charter to the average daily operating costs. It reflects the efficiency and profitability of the vessel operations. The disclosed TCE rates suggest that NAT's fleet is operating effectively in the current market, managing to secure rates above operational costs, which is a positive indicator for the company's earning potential.
However, it's essential to benchmark these TCE rates against industry averages and competitors to fully assess NAT's market position. Additionally, the stability of these rates should be monitored closely, as the shipping industry is known for its cyclicality and any downturn could impact these figures and the company's overall performance.
The impressive financial performance of NAT may be reflective of broader economic trends, such as increased demand for oil and oil transportation services. This demand could be driven by a recovering global economy or specific sectoral shifts that require more maritime transport capacity. Moreover, the increase in net profit and revenue for NAT could also suggest effective cost management strategies, despite potential macroeconomic headwinds such as inflation or supply chain disruptions.
Long-term stakeholders should consider the potential impact of environmental regulations on the shipping industry, as these could affect operational costs and the desirability of different types of vessels. The transition towards greener shipping solutions could necessitate significant capital expenditures for companies like NAT, which could alter their financial trajectory. Thus, while the current financials are strong, it is crucial to remain vigilant about how evolving economic policies and environmental standards may shape the industry's future.
Thursday, February 29, 2024
Dear Shareholders and Investors,
Highlights:
- In 2023, the Net Voyage Revenue for Nordic American Tankers Ltd (NAT) totaled
$262.2 million . This is a remarkable improvement from 2022, when Net Voyage Revenue was$168.8 million . Our performance produced a net profit of$98.7 million for 2023, more than six times the$15.1 million result for 2022.
- Maximizing dividends is a key goal and higher earnings result in higher dividends. The dividend for the fourth quarter of 2023 will be 12 cents (
$0.12) per share, up from 6 cents in the previous quarter. This marks our 106th consecutive quarterly dividend. The dividend is payable April 10, 2024 to shareholders on record as of March 20, 2024.
- The average Time Charter Equivalent (TCE) for our spot vessels during the fourth quarter of 2023 came in at
$41,580 per day per ship. Including vessels on term contracts, the total average NAT TCE was$39,170 per day per ship. The daily operating costs per ship are about$9,000 , boding well for the dividend going forward. - We clearly see a continued strong market for us in 2024. About
57% of our spot voyage days for the first quarter of 2024 have now been booked at an average TCE of$40,690 per day per ship. There is a scarcity of our type of ships, leading to strong results. - The fourth quarter of 2023 produced a net profit of
$17.5 million equaling an EPS of$0.08 per share. This is higher than the net profit for all of 2022 ($15.1 million ) and more than twice the net profit from the third quarter of 2023 ($7.5 million ). - The tanker market was already sailing into a tighter supply-demand balance before recent political events took place. Russia has invaded Ukraine. Hamas launched attacks on Israel. The Houthi’s launched missile attacks on commercial shipping in the Red Sea. The United States have taken action against Iran-sponsored militias in Iraq & Syria. These ongoing conflicts are affecting the world’s oil distribution routes resulting in longer voyages and higher demand for our tankers.
- The NAT fleet of versatile suezmax tankers offer flexibility in loading and discharging ports. Through careful voyage planning and adjustment of speed of our vessels, we reduce emissions. Each individual ship in the NAT fleet is of excellent technical quality, as demonstrated in the vetting performance, the score board undertaken by the oil companies.
- NAT has one of the lowest debt levels among publicly listed tanker companies. Our net debt stood at
$232 million , equal to$11.6 million per ship at December 31, 2023.
Ninety day periods are not particularly relevant for the assessment of a company. The direction of NAT is unquestionably up. The angle of the upward slope may be discussed.
Sincerely,
Herbjorn Hansson
Founder, Chairman & CEO
Nordic American Tankers Ltd. www.nat.bm
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 worldwide 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:
Bjørn Giæver, CFO
Nordic American Tankers Ltd
Tel: +1 888 755 8391
Alexander Kihle, Finance Manager
Nordic American Tankers Ltd
Tel: +47 91 724 171
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FAQ
What was NAT's Net Voyage Revenue for 2023?
What was NAT's net profit in 2023?
What is the dividend for NAT's fourth quarter of 2023?
What was the average Time Charter Equivalent (TCE) for NAT's spot vessels in Q4 2023?
When is the dividend payable to NAT shareholders for Q4 2023?
