Nordic American Tankers Ltd (NYSE: NAT) – Report March 31, 2022 (First quarter 2022) – Daily rates improving
Nordic American Tankers Ltd (NAT) reported its 1Q 2022 results, facing a net loss of $27 million, with an EPS of -$0.14. Despite this, the company's outlook is positive due to favorable market conditions. The average time charter equivalent (TCE) rate for the fleet increased significantly, projecting $20,000 per day for 70% of vessels booked in 2Q 2022. NAT's low debt levels enhance financial flexibility, and the company continues its dividend payments, marking the 99th consecutive payment. The company sold older vessels, using proceeds to reduce debt, and is set to deliver new tankers by June 2022.
- Projected TCE of $20,000 per day for 70% of fleet booked in 2Q 2022 (+125%).
- Low debt level at $226.9 million ($11.3 million per vessel), providing financial flexibility.
- Continued dividend payment of $0.02 per share; 99th consecutive payment.
- Successful fleet refresh with sales of older vessels generating approximately $60 million.
- Net loss of $27 million in 1Q 2022, slightly higher than the net loss of $25 million in 1Q 2021.
Tuesday, May 31, 2022
Dear Shareholders and Investors,
Please see HIGHLIGHTS and enclosed 1Q 2022 report below.
HIGHLIGHTS:
The future of our business is sound
- The uncertainty created by the Russia/Ukraine conflict is reshaping the energy map of the world long term. Oil will have to be sourced from a myriad of places, often involving longer (ton-mile) and thus more lucrative voyages. The NAT fleet of versatile suezmax tankers is ideally situated to take advantage of these changing circumstances. We have not carried Russian oil during the last year.
- New oil tankers joining the global fleet are in short supply going forward. Major shipyards are reporting they have little or no capacity to build suezmax tankers before 2026. This is a very bullish data point both for the market over the long run and for NAT.
- The average TCE for our active fleet during the first quarter of 2022 came in at
$8,870 per day per ship. So far in the second quarter of 2022,70% of our fleet is booked at an average TCE of about$20,000 per day per vessel (+125% ). This is the best illustration possible of an advantageous market for our suezmax tankers. - With global oil inventories at critically low levels and the present political uncertainties, the improvement in tanker markets has accelerated.
- We recorded a net loss of -
$27 million or an EPS of -$0.14 for the first quarter 2022. The same quarter last year saw a net loss of -$25.0 million and a corresponding EPS of -$0.16 b ased on the average number of shares outstanding in the quarter. - The cash dividend for 1Q 2022 is 2 cent (
$0.02) per share, payable on Wednesday July 6, 2022, to shareholders on record Tuesday June 14, 2022. This is our 99th consecutive quarterly dividend payment. - NAT has one of the lowest debt levels among publicly listed tanker companies. The net debt of the company as per March 31, 2022 is
$226.9 million or$11.3 million per vessel. This provides the company with financial flexibility. Our objective is to become debt free. - Our newbuilding, The “Nordic Harrier” built by Samsung in South-Korea was delivered on schedule May 13, 2022. The second newbuilding will be delivered at the end of June. Both vessels are commencing six year time charters immediately upon delivery from the yard, ensuring earnings, cashflow and financial stability. The vessels are fully financed.
- We have during the first four months of 2022 sold three of our 2002 built vessels. The ships were delivered to new owners on February 18, March 23 and April 12, 2022 respectively. A total of four vessels have been sold since we announced plans to refresh our fleet. The proceeds from these sales, which totalled about
$60 million were used to pay down debt. We expect to sell one more 2002 suezmax at about$16 million . - Financial information for the first quarter of 2022 and for other periods is included later in this report - see link below.
For contacts, please see at the end of this communication.
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.
NAT is a Bermuda based company.
Contacts:
Bjørn Giæver, CFO
Nordic American Tankers Ltd
Tel: +1 888 755 8391
Herbjørn Hansson, Founder, Chairman & CEO
Nordic American Tankers Ltd
Tel: +1 866 805 9504
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FAQ
What were NAT's earnings per share for 1Q 2022?
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What is NAT's current debt level?
When will NAT pay its dividend for 1Q 2022?
