Monday, November 1, 2021
Dear Shareholders and Investors,
Tanker markets have been down in 2021. This was also the case for the third quarter. There are now improved conditions for our Suezmax vessels. During the last two weeks, we have concluded contracts reflecting this.
We wish to share the following with you:
1. Improving market conditions
We are concluding contracts almost daily for individual vessels in our 25 ship fleet. The shortest duration last week is for an inter-European voyage for about 20 days and the longest is a term contract with an oil company that starts in November 2021 for one year ($20,000 per day) plus options for two more years at significantly higher rates. The spot contracts are about $20,000 per day for each ship, reflecting the recent rise in daily rates. The operating cash break-even for our vessels are $8,000 per day per ship.
Most of our ships trade in the spot market. A term contract of one year or more is an "insurance policy" from a risk management standpoint, producing positive cash flow. Our strategy of trading in the spot market, while also locking some ships into profitable long term contracts, allows us peak flexibility.
2. Cash from insurance premium
We are members of the mutual War Risk Association (WRA), located in Oslo, Norway. The WRA has obtained approval from the regulators in Norway to return $300 million of its capital of $1 billion to its members. NAT is expected to receive $4 million to maximum $6 million in cash before the end of 2021 or early in the first quarter of 2022.
3. Ballast Water Treatment Systems
NAT has installed Ballast Water Treatment Systems on several of our ships, and will be installing such systems on all our ships, in accordance with regulations of the International Maritime Organization (IMO), London. NAT is taking the necessary steps to ensure our vessels are fully compliant with national and international regulations, enabling the NAT vessels to operate all over the world.
Our strategy has always been to run NAT with two objectives in mind: To be the best tanker company for both our shareholders and our clients. As the world emerges from the pandemic, both parties will profit from our proven expertise and attention to market conditions.
Our 3Q 2021 results will be released Tuesday November 30, 2021 before NYSE opening.
Sincerely,
Herbjorn Hansson
Founder, Chairman & CEO
Nordic American Tankers Ltd. www.nat.bm
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:
Gary J. Wolfe
Seward & Kissel LLP
New York, USA
Tel: +1 212 574 1223
Bjørn Giæver, CFO
Nordic American Tankers Ltd
Tel: +1 888 755 8391 or +47 91 35 00 91
Herbjørn Hansson, Founder, Chairman & CEO
Nordic American Tankers Ltd
