CEO: 2018 a Turning Point for NAT
The CEO of Nordic American Tankers (NAT) Herbjørn Hansson expects 2018 to be a better year for the company than 2017, bringing higher earnings and dividend.
The last 12 months have been a very challenging time both for the crude oil shipping industry and NAT.
“Payment of dividend will continue to be a priority. In a volatile tanker market, NAT has paid dividends for 81 consecutive quarters since 1997,” Hansson pointed out in a shareholder letter for 2018.
The optimism is based on numerous factors including the fact that all of the company’s 30 Suezmax tankers are employed.
“Currently, 15 of our one million barrel ships are carrying oil East of the Suez Canal and 15 are employed West of the Suez Canal. Our cooperation with oil companies worldwide is excellent. Together with shareholders, major oil and energy companies are our most important constituency,” Hansson said.
Three newbuildings are scheduled to join NAT’s fleet in 2018 and they are fully financed under a USD 130 million sale-and-lease-back deal announced back in December.
In addition, NAT has undergone a major recapitalization program of over USD 600 million.
The scheme is expected to be concluded during the first half of 2018 at the latest, significantly bolstering the company’s financial structure.
Apart from the financing for the newbuildings, it includes USD 110 million from an equity offering and a back-stop financing facility of USD 375 million.
What is more, over the last ten years the tanker owner has managed to cut its general and administrative costs from about USD 1 million per ship/per year to about USD 400,000 per ship/per year.
Hansson added that this about 60 percent reduction is fortifying NAT’s ability to compete effectively, “providing a continued low cash breakeven level.”
“One can be uncertain about the direction of the market, but as both a major shareholder and the Chairman & CEO of NAT, I am not uncertain about the ability of NAT to give excellent returns once the tanker markets turn for the better. In fact, the earnings potential of this company is in my opinion often underestimated,” Hansson said earlier.