UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES
EXCHANGE ACT OF 1934
For the
month of November 2008
Commission
File Number: 001-13944
|
NORDIC
AMERICAN TANKER SHIPPING LIMITED
|
|
(Translation
of registrant’s name into English)
|
|
LOM
Building, 27 Reid Street, Hamilton, HM 11, Bermuda
|
|
(Address
of principal executive office)
|
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form 20-F
[X] Form 40-F
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)7: ___
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 1 is a press
release of Nordic American Tanker Shipping Limited, dated November 7,
2008, announcing its financial results for the third quarter of
2008.
Exhibit 1
Nordic American Tanker Shipping Ltd.
(NYSE:NAT) – Announces Dividend and Earnings in
respect of the 3rd Quarter of 2008
Hamilton, Bermuda, November 7th, 2008
Nordic American Tanker Shipping Ltd.
(“NAT” or “the Company”) today announced its results for the 3rd quarter of 2008. Based on its results for the quarter,
the Company will pay a dividend of $1.61 per share on or about December
2nd to shareholders of record as of
November 21st. Following this dividend payment, the
Company will have paid a dividend for 45 consecutive quarters since the autumn
of 1997 when the first three vessels in the Company’s fleet were delivered and commenced
operations.
The spot Suezmax tanker market has been
strong during the third quarter and up to the time of this
writing.
The present instability in the
international financial markets is challenging for the shipping
industry. NAT has a very strong position in this environment with no
debt on its balance sheet. Furthermore, the Company has an unused, revolving
credit line of $500 million with a term up to September 2013, giving flexibility
and financial strength going forward.
It is our policy to continue our simple,
transparent and predictable operating model
The Company does not engage in any type
of derivatives.
Highlights:
|
·
|
The Board of Directors has
declared a dividend of $1.61 per share in respect of the 3rd quarter of 2008. For the last four
quarters, including the dividend to be paid for 3Q08, a total of $4.89 has
been declared in dividend, which represents 14.2% of the
average daily share price over the same
period.
|
|
·
|
Net income for 3Q08 was $1.24 per share based on number of shares outstanding
during the quarter of
34,373,271.
|
|
·
|
In 3Q08 total offhire was 50 days
of which 33 days were directly related to two scheduled drydockings. These
drydockings were accomplished on time and on budget. There are no further
planned drydockings for any of the Company’s vessels until
2010.
|
|
·
|
Notwithstanding the volatility in
the financial and commodities markets, the positive Suezmax tanker spot
market has to date continued into the fourth quarter. The Company
does not predict future spot rates.
|
Financial
Information:
Net income for 3Q08 was $42.7m, or $1.24 per share (EPS). This
compares to net income of $35.5m or $1.10 per share for 2Q08. In 3Q07, net income was -$1.2m, or -$0.04 per share. In 3Q08 the Company had an
alternative cost equal to $0.10 per share due to loss of income related to the
offhire.
The Company’s operating cash flow1 was $56.4m for 3Q08, compared to $52.2m for 2Q08 and $13.8m for 3Q07.
The Board has declared a
dividend of $1.61 per share
in respect of 3Q08. A dividend of $1.60 per share was declared in respect of
2Q08 and $0.40 per share in respect of
3Q07. The amount of the dividend per share is above all a direct reflection of
the level of the spot tanker market during the relevant quarter and shares
outstanding. For 3Q08 the number of shares outstanding was fixed at 34,373,271.
During 2Q08 the weighted average number of shares outstanding was 32,198,452 due to the issuance of shares in the
Company’s follow-on offering completed in May 2008.
Following the payment of
the dividend in respect of 3Q08 the Company has for the last four quarters,
including the
dividend to be paid for 3Q08, paid dividends in the aggregate amount
of $4.89 per share, representing a yield of 14.2% per annum based on the average
daily share price over the same period. The Company
has now
declared a dividend for 45 consecutive quarters since the autumn of 1997 when
its first three vessels were delivered.
A report published by
Morgan Stanley Research November 3rd, 2008 stated that the NAT common stock
had the best performance of all the listed
shipping stocks internationally so far in 2008. The criterion was based on total
return to shareholders and includes the price for our common shares plus
dividends reinvested in our common shares. In a research report by J.P. Morgan of
October 14,
2008 referring to the
Company’s strong financial position, it is said
that “NAT is best positioned for a
storm”2.
We consider our general and
administrative costs per
day per ship to be at a low
level. We also continue to have a strong focus on keeping the operating costs of
our vessels low, while always focusing on safe vessel
operation.
As of the end of 3Q08, NAT does not have
any net debt. At the same time, the Company has not drawn on its $500million
revolving credit facility. The credit facility, maturing in September 2013, is
not subject to reduction by the lenders and there is no repayment obligation
during the term of the facility. The Company pays interest only on drawn amounts
and a commitment fee for undrawn amounts. The undrawn credit
facility gives the Company a high degree of flexibility for future
expansion.
We estimate that our average cash breakeven for our trading fleet of 12 vessels is about $9,000 per day per vessel. When the freight market is above this
level, the Company can be expected to pay a dividend based on its strategy.
The breakeven rate is the
amount of average daily revenues for our vessels in the spot market which would cover our vessel operating
expenses, voyage expenses, if any, cash general and administrative expenses,
interest expense and other financial charges.
For further details on our financial
results, please see later in this release.
The
Fleet:
Eleven of the Company’s 12 trading vessels are employed
in the spot market, while
one vessel remains employed on a long-term fixed rate
charter.
By
way of comparison, in
the autumn of
2004 the Company had three vessels;
at the end of 2005 the Company had eight vessels; and at the end of 2006 the
Company had 12 vessels. During
3Q08,
we had 12
vessels in operation. With
the two newbuildings announced in November 2007, the Company is expected to have
a fleet of 14 vessels operating from April 2010.
|
Vessel
|
Dwt
|
Employment.
|
|
Gulf
Scandic
|
151,475
|
Long term fixed
charter
|
|
Nordic Hawk
|
151,475
|
Spot
|
|
Nordic
Hunter
|
151,400
|
Spot
|
|
Nordic
Voyager
|
149,591
|
Spot
|
|
Nordic
Fighter
|
153,328
|
Spot
|
|
Nordic
Freedom
|
163,455
|
Spot
|
|
Nordic
Discovery
|
153,328
|
Spot
|
|
Nordic
Saturn
|
157,332
|
Spot
|
|
Nordic
Jupiter
|
157,411
|
Spot
|
|
Nordic
Cosmos
|
159,998
|
Spot
|
|
Nordic Moon
|
159,999
|
Spot
|
|
Nordic
Apollo
|
159,999
|
Spot
|
|
Newbuilding
|
163,000
|
Delivery scheduled in
4Q09
|
|
Newbuilding
|
163,000
|
Delivery scheduled by end April
2010
|
|
Total
|
2,194,791
|
Two scheduled drydockings were
undertaken during 3Q08 with an aggregate offhire of 33 days. The drydockings
were completed on time and on budget. There are no further planned drydockings
for our vessels until 2010.
Financial
Instability and the Tanker Market:
In our
quarterly reports to shareholders we have often stressed the significance of the
development of the world economy for the tanker industry. The present
downturn can be expected to influence our industry. Production and
consumption locations are, however, of particular importance to our industry.
Transportation volume times distance – or ton miles – is a key
measurement. With these factors in mind, the tanker spot market may
not be affected as negatively as the anticipated recession in the world economy
may indicate. Suezmax tanker rates are maintaining satisfactory levels to date
as indicated elsewhere in this report.
It is
apparent that some shipping companies are now facing challenges when it comes to
the financing of their large newbuilding programs, as shipping banks are more
restrictive than before in granting credit. Such an environment offers the
Company the opportunity to improve its relative competitive
position.
On the
supply side, it is expected that the current financial upheaval may delay
deliveries of newbuildings and may also lead to the cancellation of newbuilding
orders. There are reports of cancellations of tanker newbuildings
from the yards. We may also see that shipping companies with high
debt or other financial commitments may get problems which could lead to
foreclosures.
All other
things being equal, the total debt of the Company spread across 14 ships is
expected to be about $9 million per ship on delivery of our second newbuilding
suezmax tanker, expected to take place by the end of April 2010. This is indeed
a comfortable debt level. The two newbuildings can be expected to increase the
earnings and dividend capacity of the company by approximately 16%.
1 Operating
cash flow is a non-GAAP financial term often used by investors to measure
financial performance of shipping
companies. Operating cash flow represents income from vessel
operations before depreciation and non-cash administrative
charges. Please see page 6 for a reconciliation of
this non-GAAP measure as used in this release to the most directly comparable
GAAP financial measure.
2 The Company does not
take responsibility for the material contained in these research reports and
does not endorse the reports.
The average daily rate for our spot
vessels was $68,362 per
day net to us during 3Q08
compared with $64,900 for 2Q08.
The graph shows the average yearly spot
rates from 2000 as reported by R.S. Platou Economic Research a.s. The rates as reported by
shipbrokers may vary from the actual rates we achieve in the
market.
The level of the tanker market is
essentially a function of supply and demand for tanker tonnage. In addition to
the supply of new vessels from the ship yards, adjusted for phasing out single
hull tonnage and for other vessel deletions, the level of the tanker market in
the foreseeable future is above all dependent on the development of the world
economy.
Strategy
going forward
The fact that according to a leading
banker the Company had the best total return among internationally listed
shipping companies for the first nine months of this year and at the same time
very limited financial risk by having no net debt on its balance sheet, shows,
in our opinion, that the unique and transparent operating model of the Company is working to the benefit of
shareholders.
The
financial turmoil may represent opportunities for our Company. However, we
expect to pursue a conservative philosophy and are not rushing to
expand.
Our policy is to grow when it is
profitable and accretive to do so; that is, after an acquisition of vessels or
other forms of expansion, the Company should be able to produce higher earnings
per share and pay a higher dividend per share than before such an event. We
believe that our full
dividend payout policy,
with high spot market
exposure combined with
a strong balance sheet
should continue to enable
us to achieve a competitive yield compared with other shipping companies.
In the midst of the financial
instability, it is our
policy to continue our simple, transparent and predictable operating
model.
Going forward, we believe that our
Company is well positioned.
* * * * *
NORDIC
AMERICAN TANKER SHIPPING LIMITED
| Amounts in USD '000 |
|
CONDENSED
STATEMENTS
OF OPERATION
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||
|
Sep.
30, 2008
(unaudited)
|
Jun.
30, 2008
(unaudited)
|
Sep.
30, 2007
(unaudited)
|
Sep.
30, 2008
(unaudited)
|
Sep.
30, 2007
(unaudited)
|
||||||||
|
NET
VOYAGE REVENUE
|
67 316
|
63
249
|
24
077
|
177
440
|
|
113
005
|
|
|||||
|
OPERATING
EXPENSES
|
||||||||||||
|
Vessel
operating expenses
|
(9
175)
|
(9
301)
|
(8
722)
|
(26
918
|
)
|
(24
261
|
)
|
|||||
|
Depreciation
|
(12
359)
|
(11
958)
|
(10
520)
|
(35
731
|
)
|
(31
129
|
)
|
|||||
|
General
and administrative costs
|
(2
985)
|
(5
855)
|
(4 048) *
|
(10
829
|
)
|
(7
485
|
)
|
|||||
|
(24
519)
|
(27
114)
|
(23
290)
|
(73
478
|
)
|
(62
875
|
)
|
||||||
|
Income
from vessel operation
|
42
797
|
36
135
|
787
|
103
962
|
|
50
130
|
|
|||||
|
Interest
income
|
321
|
261
|
316
|
799
|
|
701
|
|
|||||
|
Interest
expense
|
(434)
|
(849)
|
(2
282)
|
(3
115
|
)
|
(8
300
|
)
|
|||||
|
Net
financial items
|
(113)
|
(588)
|
(1
966)
|
(2
316
|
)
|
(7
599
|
)
|
|||||
|
NET
INCOME
|
42
684
|
35
547
|
(1
179)
|
101
646
|
|
42
531
|
|
|||||
|
Earnings
per average number of shares
|
1.24
|
1.10
|
(0.04)
|
3.16
|
|
1.54
|
|
|||||
|
Weighted
average number of shares
|
|
34
373 271
|
32
198 452
|
|
29
162 088
|
32
190 342
|
|
|
27
671 657
|
|
||
| Common shares outstanding | 34 373 271 | 34 373 271 | 29 975 312 | 34 373 271 |
29
975 312 |
|||||||
|
*)
|
The
G&A for the
three months ended Sep. 30, 2008, Jun. 30, 2008 and Sep. 30, 2007 include
non-cash charges of $ 1.2in, 54.1m and $2.5m respectively which are
charges related to share based compensation, the 2004 Stock Option Plan
and pension cost.
|
|
**)
|
The
G&A for the nine months ended Sep. 30, 2008 and 2007 include non-cash
charges of $5.8m and $3.3m respectively which are charges related to share
based compensation, the 2004 Stock Option Plan and pension
cost.
|
|
CONDENSED
BALANCE SHEETS
|
Sep.
30, 2008
(unaudited)
|
Sep.
30, 2007
(unaudited)
|
Dec.
31, 2007
|
|||
|
Cash
deposits
|
31
120
|
|
5
795
|
|
13
342
|
|
|
Accounts receivable
*
|
|
64
101
|
|
18
053
|
|
14
489
|
|
Other
current assets
|
6
104
|
|
15
078
|
|
16
972
|
|
|
Vessels
|
720
035
|
|
738
266
|
|
740
631
|
|
|
Other
long term assets
|
21
491
|
|
2
852
|
|
19
194
|
|
|
Total
Assets
|
|
842
851
|
|
780
044
|
|
804
628
|
|
Accounts
payable
|
|
5
816
|
|
9
450
|
|
7
290
|
|
Accrued
liabilities
|
|
6
405
|
|
10
894
|
|
17
068
|
|
Accrued
long-term liability
|
4
086
|
0
|
|
2
665
|
||
|
Long-term
debt
|
0
|
|
77
500
|
|
105
500
|
|
|
Shareholders'
equity
|
|
826
544
|
|
682
200
|
|
672
105
|
|
Total
liablilities and shareholders' equity
|
842
851
|
|
780
044
|
|
804
628
|
|
*) The Accounts receivable (AR) constitues ordinary accounts receivables,
net earnings and voyages in progress at quarter end. The balance of the AR will
vary with the level of the spot tanker market.
|
|
|
Twelve
Months Ended |
|
|
CONDENSED
STATEMENTS OF CASH FLOW
|
Nine
months ended
|
||
|
Sep.
30, 2008
(unaudited) |
Sep.
30, 2007
(unaudited |
Dec.
31, 2007
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net cash from
Operating Activitites
|
87
301
|
70
819
|
83
649
|
|
FINANCING
ACTIVITIES
|
|||
|
Net proceeds from
sale of Common Stock
|
158
906
|
119
757
|
119
751
|
|
Proceeds from use of
Credit Facility
|
10
000
|
27
000
|
55
000
|
|
Repayment of
debt
|
(115
500)
|
(123
000)
|
(123
000)
|
|
Loan facility
costs
|
(2
316)
|
(14)
|
(14)
|
|
Dividends
paid
|
(110
545)
|
(95
359)
|
(107
349)
|
|
Net
Cash provided by (used for) Financing Activities
|
(59
455)
|
(71
616)
|
(55
612)
|
|
INVESTING
ACTIVITIES
|
|||
|
Investment in
Vessels
|
(10
068)
|
(5
137)
|
(8
424)
|
|
Deposit on
Contract
|
0
|
0
|
(18
000)
|
|
Net
cash used by investing activitites
|
(10
068)
|
(5
137)
|
(26
424)
|
|
Net Increase in Cash
and Cash Equivalents
|
17
778
|
(5
934)
|
1
613
|
|
Beginning Cash and
Cash Equivalents
|
13
342
|
11
729
|
11
729
|
|
Ending
Cash and Cash Equivalents
|
31
120
|
5
795
|
13
342
|
NORDIC AMRICAN
TANKER SHIPPING LIMITED
Reconciliation of non-GAAP financial
measures
(Amounts in USD '000)
(Amounts in USD '000)
|
Three
Months Ended
|
Nine
Months Ended
|
||||
|
Sep.
30,
2008
|
Jun.
30,
2008
|
Sep.
30,
2007
|
Sep.
30,
2008
|
Sep.
30,
2007
|
|
|
Voyage
revenue
|
69
202
|
66
201
|
34
097
|
187
129
|
146
813
|
|
Voyage
expenses
|
-1
886
|
-2
952
|
-10
020
|
-9
689
|
-33
807
|
|
Net
voyage revenue(1)
|
67
316
|
63
249
|
24
077
|
177
440
|
113
006
|
|
Three
Months Ended
|
||||||
|
Sep.
30,
2008
|
Jun.
30,
2008
|
Sep.
30,
2007
|
||||
|
Income
from vessel operations
|
42
797
|
36
135
|
787
|
|||
|
Depreciation
|
12
359
|
11
958
|
10
520
|
|||
|
Share
Based Compensation/ Stock Option Plan/Pension Cost
|
1
217
|
4
129
|
2
522
|
|||
|
Operating Cash Flow
(2)
|
56
373
|
52
222
|
13
829
|
|||
| (1) |
Net voyage
revenues represents voyage revenues less voyage expenses such as bunker
fuel, port fees, canal tolls and brokerage commissions. Net voyage
revenues is included because certain investors use this data to measure a
shipping company’s financial performance. Net voyage revenues is not
required by accounting principles generally accepted in the United States
and should not be considered as an alternative to net income or any
other indicator of the Company’s performance required by accounting
principles generally accepted in the United States.
|
| (2) | Operating cash flow represents income from vessel operations before depreciation and non-cash administrative charges. Operating cash flow is included because certain investors use this data to measure a shipping company’s financial performance. Operating cash flow is not required by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by accounting principles generally accepted in the United States |
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,”
“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-hire, failure on the part of a seller to
complete a sale to us 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:
Scandic
American Shipping Ltd
Manager
for:
Nordic
American Tanker Shipping Limited
P.O
Box 56, 3201 Sandefjord, Norway
Tel:
+ 47 33 42 73 00 E-mail: nat@scandicamerican.com
Rolf
Amundsen, Investor Relations
Nordic
American Tanker Shipping Limited
Tel:
+1 800 601 9079 or + 47 908 26 906
Gary
J. Wolfe
Seward
& Kissel LLP, New York, USA
Tel:
+1 212 574 1223
Turid
M. Sørensen, CFO
Nordic
American Tanker Shipping Limited
Tel: +
47 33 42 73 00 or + 47 905 72 927
Herbjørn
Hansson, Chairman and Chief Executive Officer
Nordic
American Tanker Shipping Limited
Tel:
+1 866 805 9504 or + 47 901 46 291
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
NORDIC
AMERICAN TANKER SHIPPING LIMITED
(registrant)
Dated: November
7,
2008 By: /s/ Herbjørn
Hansson
Herbjørn Hansson
Chairman, Chief Executive Officer and President
SK 01318 0002
936093