Nordic American Tanker Shipping Ltd. (NAT) - (NYSE: NAT) (OSE: NAT) Letter to the Shareholders
17 Diciembre 2004 - 7:37AM
PR Newswire (US)
Nordic American Tanker Shipping Ltd. (NAT) - (NYSE: NAT) (OSE: NAT)
Letter to the Shareholders HAMILTON, Bermuda, Dec. 17
/PRNewswire-FirstCall/ -- Dear Shareholder: With 2004 coming to a
close, I would like to send you this message, providing a snapshot
of where we stand at this time. 2004 has been a very exciting year
for NAT, the most notable development being that the company has
been turned into an operating company. Thereafter, the company may
expand its operations. NAT could not do that in the past because of
the Bye Laws of the company. Two of our ships (Nordic Hawk and
Nordic Hunter) have been rechartered to BP on time charters for
three years at market related rates -- in direct continuation of
the BP contracts that expired in September and October. According
to the terms of the contracts, NAT will receive the spot market
rate minus five per cent according to an agreed formula which
contains neither a floor nor a ceiling. The market related rates
for our two ships that are chartered to BP eliminate the risk of
not finding immediate employment in the spot market and are an
attractive alternative to the costs of rapidly building a spot
chartering operation in-house. Since NAT has become an operating
company, NAT has assumed the responsibility of providing crews and
of operating the ships technically. These functions have been
outsourced to a first class technical manager of high reputation.
The company became an operating company on October 18th 2004 when
the last charter from BP was rearranged. A short time thereafter we
acquired the 1997-built double hull Suezmax tanker, the Wilma
Yangtze. The ship was chartered back to the seller under a contract
that expires at the end of January 2005. The addition of Wilma
Yangtze to our fleet is accretive to our earnings and dividend
compared with a fleet of three ships, and that vessel remains
accretive irrespective of spot rate levels in the future. Starting
in February 2005, we expect that we shall have three ships in the
spot market for the time being. The fourth ship is on long term
contract -- providing us with what we believe to be the lowest cash
break even among tanker companies that are publicly listed. It is
the expressed policy of the Board to pursue a high dividend payout
policy. Another important dimension of our strategic platform is
expansion of our fleet of high quality and environmentally friendly
vessels. The focus on the environment is a never ending process.
During the last few weeks there have been two incidents involving
vessels, unconnected with us, in US waters, one in Alaska and one
near Philadelphia, incidents receiving a lot of attention in the
press. This development puts even greater focus on the need for
first class technical operations, good ships and protection of the
environment. As you know, our double hull ships are of a first
class standard. Relatively speaking, NAT now has the strongest
balance sheet among publicly traded companies in the tanker
industry, having no debt. In addition, we have been able to raise a
USD 300 million credit line which is a forceful tool for expansion.
This credit line has been provided by four top rated international
shipping banks and is a sign of the trust that these banks have
placed in our company. Given the strength of our balance sheet, our
policy in general is not to accumulate cash over time in the
company. We are of the view that the cash belongs to you, our
shareholders. In our view, it is also expensive to carry cash on
the balance sheet compared with the price of having the credit
line. We wish to expand when the timing is right. However, growth
should not take place at the expense of profitability and our
ability to continue to pay dividends. Shipping rates have shown
great volatility in the past and are difficult to predict. During
the last months the market has been very strong. A good tanker
company management in our judgement does not so much try to predict
rates as it must plan to be successful in the midst of uncertainty.
At the time of writing, spot rates are strong although the market
traditionally slows down towards the end of the year. 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.
However, based upon our long experience in the industry, we know
that the future may take another course. For NAT, with our goal of
serving our shareholders in the most efficient manner, it is always
a question of adapting to the market as the market may develop. We
now have a very good foundation for the further development of the
company. In addition to shareholders, our valued customers
represent a very important constituency. I am very pleased to
report that we enjoy a high reputation with all our friends in the
oil industry -- also a platform on which to build in the future.
Our focus on customers will never cease. Our policy is that any
project that we may undertake must be accretive to earnings and
dividends per share. We do not intend to deviate from that policy.
We are overwhelmed by the support shareholders give our company.
Many of you are in direct communication with us, expressing views
and comments on the status of the company. Such an active approach
is very much appreciated. I take this opportunity to wish all of
you the best for Christmas and for the New Year. We always welcome
and encourage your active participation in the development of the
company. Please see our website: http://www.nat.bm/ where you find
all the contact details. Again, thank you very much! Sincerely,
Herbjorn Hansson Chairman and 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 and our Annual Report
on Form 20-F. 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 DATASOURCE: Nordic
American Tanker Shipping Ltd. CONTACT: Scandic American Shipping
Ltd, Manager for Nordic American Tanker Shipping Ltd., +
47-33-42-73-00, ; Rolf Amundsen, Chief Financial Officer,
1-800-601-9079, +47-908-26-906, or Herbjorn Hansson, Chairman &
CEO, 1-866-805-9504, +47-901-46-291, both of Nordic American Tanker
Shipping Ltd.; Gary Wolfe of Seward & Kissel LLP, New York,
USA, +1-212-574-1223, for Nordic American Tanker Shipping Ltd. Web
site: http://www.nat.bm/
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