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Chairpersons

Nordic American Tanker Shipping Ltd. Reports Strong 4Q 2005 Results, Expanding Fleet and Dividend Capacity

Strategic Insights

— 1 min read

Nordic American Tanker Shipping Ltd.'s Chairman and CEO recently issued a letter to shareholders, providing a snapshot of the company's progress over the past six months. The company has increased its fleet from four vessels at the end of 2004 to eight vessels, including the recent delivery of a 1998-built double hull suezmax tanker, the Nordic Saturn. This expansion has been accretive to the company's dividend capacity, enabling it to pay a higher dividend than would have been possible before the fleet expansion.

Key Takeaways:

  • The company's fleet has increased from four vessels at the end of 2004 to eight vessels, including the delivery of the Nordic Saturn on November 7th.
  • The growth of the fleet has been accretive to the company's dividend capacity, enabling it to pay a higher dividend than would have been possible before the fleet expansion.
  • The spot market rate for suezmax tankers averaged $24,677 per day in the 3rd quarter 2005, according to the Imarex Tanker Index, and increased to $73,144 on November 28th.
  • The average spot rate for suezmax tankers was $54,295 for October and $66,045 for November up to and including November 28th, producing an average spot level as from October 1st and up to November 28th of $59,871.
  • The company is confident that the 4th quarter 2005 results will be much better than the 3rd quarter 2005 results due to the strong rates in the 4th quarter.
  • The company's strategy is to continue to grow in a manner that is accretive to its dividends and earnings per share.
  • The company has a credit line of $300m, providing financial flexibility to expand and consider high-quality double hull vessels.

Statistics:

  • Average spot market rate for suezmax tankers in the 3rd quarter 2005: $24,677 per day.
  • Spot market rate for suezmax tankers on November 28th: $73,144.
  • Average spot rate for suezmax tankers for October and November up to and including November 28th: $54,295 for October and $66,045 for November.
  • Average spot level from October 1st to November 28th: $59,871.

Sources:

  • Nordic American Tanker Shipping Ltd. (NYSE:NAT)
  • Nordic American Tanker Shipping Ltd. - Letter to shareholders, dated November 29, 2005.
  • Imarex Tanker Index.

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