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 August 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): ___
Note: Regulation S-T Rule
101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely
to provide an attached annual report to security holders.
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: ___
Note: Regulation S-T Rule
101(b)(7) only permits the submission in paper of a Form 6-K if submitted to
furnish a report or other document that the registrant foreign private issuer
must furnish and make public under the laws of the jurisdiction in which the
registrant is incorporated, domiciled or legally organized (the registrant's
"home country"), or under the rules of the home country exchange on which the
registrant's securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been distributed to the
registrant's security holders, and, if discussing a material event, has already
been the subject of a Form 6-K submission or other Commission filing on
EDGAR.
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes
[_] No [X]
If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82-______________.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
as Exhibit 1 is a press release of Nordic American Tanker Shipping
Limited, dated August 8, 2008, announcing its financial results for the second
quarter of 2008.
Exhibit
1
Nordic
American Tanker Shipping Ltd. (NYSE:NAT) – Announces Dividend and Earnings
in respect of the 2nd Quarter of 2008
Hamilton,
Bermuda, August 8th,
2008
Nordic
American Tanker Shipping Ltd. (“Nordic American” or “the Company”)
today announced its results for the 2nd quarter
of 2008. Reflecting the improved spot tanker market, the net income for the
first six months of 2008 ($58.9m) was higher than the net income for the whole
year of 2007 ($44.2m). During both of these periods the Company had 12 vessels
in operation.
The spot
market for our suezmax fleet during 2Q08 has enabled the Company to declare a
dividend of $1.60 per share in respect of that quarter. As of this writing more
than 50% of the income days for 3Q08 have been covered at average spot market
rates which are well above those achieved in 2Q08. The Company has now declared
a dividend for 44 consecutive quarters since the autumn of 1997 when our first
three vessels were delivered.
Highlights:
|
·
|
The
Board of Directors has declared a dividend of $1.60 per share in
respect of the 2nd quarter
of 2008. The dividend is expected to be paid on September 2nd,
2008, to shareholders of record as of August 21st,
2008.
|
|
·
|
Net
income for 2Q08 was $1.10 per share based on the weighted average number
of shares outstanding during the quarter - 32,198,452. Total number of
shares outstanding as of June 30th, 2008 and at the time of this
report is 34,373,271.
|
|
·
|
In
2Q08 total offhire was 50 days which was directly related to three
scheduled drydockings. These drydockings were accomplished on time and
below budget.
|
|
·
|
Giving
further room for expansion, the Company in April agreed with its lending
banks to extend its $500 million credit facility from September 2010 until
September 2013 on the same terms as agreed when the credit facility was
established in September 2005.
|
|
·
|
In
May the Company completed a follow-on offering of 4,310,000 common shares
which strengthened our equity by $159m, enabling us to pay down debt and
to prepare the Company for further
expansion.
|
|
·
|
Our
fleet now consists of 14 double hull Suezmax tankers including the two
newbuildings scheduled to be delivered in 4Q09 and April
2010. In the autumn of 2004 the Company had only three Suezmax
tankers.
|
Dividends per Share,
Earnings per Share and Financial Information:
The
Company’s operating cash flow(1) was
$52.2m for 2Q08, compared to $36.9m for 1Q08 and $34.6m for 2Q07.
The Board
has declared a dividend of $1.60 per share in respect of 2Q08. A dividend of
$1.18 per share was declared for 1Q08 and $1.17 per share for 2Q07. The
amount of the dividend is above all a direct reflection of the level of the spot
tanker market.
Net
income for 2Q08 was $35.5m, or $1.10 per share (EPS). This compares
to a net income of $23.4m or $0.78 per share for 1Q08. In 2Q07, net income
was $20.9m, or $0.78 per share. In 2Q08 the Company incurred charges
equivalent to $0.21 per share due to loss of income related to the three planned
drydockings and stock based
compensation to the Manager under the management contract in connection with the
offering in May 2008. The drydockings were completed on time and below
budget. In 3Q08, two vessels have already finished their planned drydockings
with an aggregate offhire of 33 days. There are no further planned drydockings
for our vessels until 2010.
The
Company does not engage in any type of derivatives.
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 operation of the vessels.
However, we note the continuing upward pressure across the shipping industry on
vessel operating costs – above all related to crewing, lubricating oil and
repair and maintenance costs.
NAT’s
position was significantly strengthened in May following the closing of a
follow-on offering of 4,310,000 common shares. The net proceeds of
the offering of approximately $159m were used to repay debt related to our
revolving credit facility and to prepare the Company for further
expansion.
At
the end
of 2Q08, we do not have any net debt. At the
same time, the Company has not
drawn on its $500m
revolving credit facility.
The credit
facility cannot be reduced 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. In
April this year the Company entered into an agreement with leading shipping
banks to extend the term of the Company’s credit
facility by three years – from September 2010 up to September 2013 - on
the same terms as agreed when the credit facility was established in September
2005. The extension of three years gives the Company a high degree of
flexibility for future expansion.
The
Company has one of the strongest balance sheets in the tanker industry,
providing flexibility for the Company if a weaker freight environment should
occur. It is apparent that some shipping companies are now facing challenges
when it comes to financing their large newbuilding programs, as shipping banks
are more restrictive than before in granting credit. In such an environment, we
believe that the relative competitive position of the Company would be
improved.
We
estimate that our average cash breakeven for our trading fleet of 12
vessels is below $9,000 per day per vessel, having been reduced by our
repayment of debt from part of the proceeds of our follow-on offering in May
2008. 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 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
2Q08, we also had 12 vessels in
operation.
With the two newbuildings announced in November 2007, the Company will have a
fleet of 14 vessels operating by 2Q10.
|
Vessel
|
Dwt
|
Employment
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|||
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Gulf
Scandic
|
151,475
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Long
term fixed charter
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|||
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Nordic
Hawk
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151,475
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Spot
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|||
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Nordic
Hunter
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151,400
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Spot
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|||
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Nordic
Voyager
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149,591
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Spot
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|||
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Nordic
Fighter
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153,328
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Spot
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|||
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Nordic
Freedom
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163,455
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Spot
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|||
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Nordic
Discovery
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153,328
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Spot
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|||
|
Nordic
Saturn
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157,332
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Spot
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|||
|
Nordic
Jupiter
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157,411
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Spot
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|||
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Nordic
Cosmos
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159,998
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Spot
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|||
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Nordic
Moon
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159,999
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Spot
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|||
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Nordic
Apollo
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159,999
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Spot
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|||
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Newbuilding
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163,000
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Delivery
scheduled in 4Q09
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|||
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Newbuilding
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163,000
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Delivery scheduled by end April
2010
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|||
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Total
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2,194,791
|
||||
The
Market:
The
average spot market rate for modern suezmax tankers, according to the Imarex
Tanker Index (“Imarex”), was $70,625 per day for 2Q08 compared to $43,635 per
day during 1Q08. The rates
as reported by shipbrokers and Imarex may vary from the actual rates we achieve
in the market.
The
average daily rate for our spot vessels was about $64,900 per day net to us
during 2Q08 compared with $46,600 for 1Q08.
The graph
shows the average yearly spot rates from 2000 as reported by R.S. Platou
Economic Research a.s.
Recent statistics indicate
that the world Suezmax fleet increased marginally
during 2Q08 (1 vessel) – now standing at 361 vessels while 153 Suezmaxes are on
order. We now
see that deliveries from some yards are being delayed. The increase in
oil tankers being sold for demolition and the conversion of tankers to offshore
units and dry bulk vessels continue to dampen the net tanker supply growth. In
addition, oil is being transported over a longer distance increasing the
ton-mile effect and some VLCCs are being used for storage. We believe that these
factors should help keep tanker supply and demand finely balanced. In addition,
the delays at some yards can now be expected to slow the growth in supply of
tanker tonnage.
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. Far Eastern countries and other
emerging areas including South America, are showing strong economic growth,
which to some extent is balancing out the economic challenges in the United
States and in Europe.
Strategy going
forward
The
operations of the Company are based on its unique and transparent operating
model. Our policy is that growth should be accretive; that is, after an
acquisition of vessels or other forms of expansion, the Company should be able
to pay a higher dividend than before such an event. We are actively assessing
expansion alternatives for the Company. 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.
We focus
on cost-efficient management of the Company, both in regard to the operating
expenses of our vessels and general and administrative expenses (G&A). The
Company’s G&A costs continue to be among the lowest in the
industry.
We regard
it as extremely important that the interests of management are aligned with
those of shareholders.
The
Company's exposure to the spot market is based on our analysis showing that the
spot market over time can be expected to produce higher revenues on average than
the time charter market. A certain amount of term charter coverage is also
being contemplated from time to time.
The main
objective of the Company is to maximize its risk adjusted total return(2) for
shareholders via a transparent, predictable and simple strategic
platform.
Notwithstanding
a certain softening from the peak of the spot tanker market the tanker market
rates for Suezmax vessels are still strong. As a matter of policy we do not
predict short term spot tanker rates which may be expected to be volatile. Going
forward, we believe that our Company is well positioned.
* * * *
*
________________________
|
(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 total return is based on the price for our common shares plus dividends reinvested in our common shares. |
NORDIC
AMERICAN TANKER SHIPPING LIMITED
|
Amounts
in USD '000
|
||||||||||||||||||||
|
CONDENSED
STATEMENTS
OF
OPERATION
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||||||||
|
Jun.
30, 2008
(unaudited)
|
Mar.
31, 2008
(unaudited)
|
Jun.
30, 2007
(unaudited)
|
Jun.
30, 2008
(unaudited)
|
Jun.
30, 2007
(unaudited)
|
||||||||||||||||
|
NET
VOYAGE REVENUE
|
63,249 | 46,875 | 44,324 | 110,124 | 88,929 | |||||||||||||||
|
OPERATING
EXPENSES
|
||||||||||||||||||||
|
Vessel
operating expenses
|
(9,301 | ) | (8,442 | ) | (8,237 | ) | (17,743 | ) | (15,540 | ) | ||||||||||
|
Depreciation
|
(11,958 | ) | (11,414 | ) | (10,422 | ) | (23,372 | ) | (20,610 | ) | ||||||||||
|
General
and administrative costs
|
(5,855 | )* | (1,989 | )* | (1,857 | )* | (7,844 | ) ** | (3,436 | )** | ||||||||||
| (27,114 | ) | (21,845 | ) | (20,516 | ) | (48,959 | ) | (39,586 | ) | |||||||||||
|
Income
from vessel operation
|
36,135 | 25,030 | 23,808 | 61,165 | 49,343 | |||||||||||||||
|
Interest
income
|
261 | 217 | 193 | 478 | 385 | |||||||||||||||
|
Interest
expense
|
(849 | ) | (1,832 | ) | (3,099 | ) | (2,681 | ) | (6,018 | ) | ||||||||||
| (588 | ) | (1,615 | ) | (2,906 | ) | (2,203 | ) | (5,633 | ) | |||||||||||
|
NET
INCOME
|
35,547 | 23,415 | 20,902 | 58,962 | 43,710 | |||||||||||||||
|
Earnings
per average number of shares
|
1.10 | 0.78 | 0.78 | 1.90 | 1.62 | |||||||||||||||
|
Weighted
average number of shares
|
32,198,452 | 29,975,312 | 26,914,088 | 31,086,884 | 26,914,088 | |||||||||||||||
|
Common
shares outstanding
|
34,373,271 | 29,975,312 | 26,914,088 | 34,373,271 | 26,914,088 | |||||||||||||||
| *) |
The
G&A for the three months ended Jun. 30, 2008, Mar. 31, 2008 and Jun.
30, 2007 include non-cash charges of $4. 1m, $0.5m and
$0.4m respectively which are charges related to share based compensation,
the 2004 Stock Option Plan and pension
cost.
|
| **) |
The
G&A for the six months ended Jun. 30, 2008 and 2007 include non-cash
charges of $4.6m and $0.8m respectively which are charges related to
share based compensation, the 2004 Stock Option Plan and pension
cost.
|
|
CONDENSED
BALANCE SHEETS
|
Jun.
30, 2008
(unaudited)
|
Jun.
30, 2007
(unaudited)
|
Dec.
31,
2007
|
|||||||||
|
Cash
deposits
|
42,158 | 25,300 | 13,342 | |||||||||
|
Accounts
receivable
|
59,031 | * | 15,598 | 14,489 | ||||||||
|
Other
current assets
|
7,933 | 13,732 | 16,972 | |||||||||
|
Vessels
|
727,992 | 738,044 | 740,631 | |||||||||
|
Other
long term assets
|
21,650 | 2,982 | 19,194 | |||||||||
|
Total
Assets
|
858,764 | 795,656 | 804,628 | |||||||||
|
Accounts
payable
|
7,613 | 2,176 | 7,290 | |||||||||
|
Accrued
liabilities
|
9,425 | 11,809 | 17,068 | |||||||||
|
Accrued
long-term liability
|
3,240 | 0 | 2,665 | |||||||||
|
Long-term
debt
|
0 | 185,500 | 105,500 | |||||||||
|
Shareholders'
equity
|
838,486 | 596,171 | 672,105 | |||||||||
|
Total
liablilities and shareholders' equity
|
858,764 | 795,656 | 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.
|
|
Six
months ended
|
Months
Ended
|
|||||||||||
|
CONDENSED
STATEMENTS OF
CASH
FLOW
|
Jun.
30, 2008
(unaudited)
|
Jun.
30, 2007
(unaudited)
|
Dec.
31,
2007
|
|||||||||
|
OPERATING
ACTIVITIES
|
||||||||||||
|
Net
cash from Operating Activitites
|
34,266 | 61,873 | 83,649 | |||||||||
|
FINANCING
ACTIVITIES
|
||||||||||||
|
Net
proceeds from sale of Common Stock
|
158,906 | 0 | 119,751 | |||||||||
|
Proceeds
from use of Credit Facility
|
10,000 | 15,000 | 55,000 | |||||||||
|
Repayment
of debt
|
(115,500 | ) | (3,000 | ) | (123,000 | ) | ||||||
|
Loan
facility costs
|
(2,316 | ) | (14 | ) | (14 | ) | ||||||
|
Dividends
paid
|
(55,548 | ) | (60,288 | ) | (107,349 | ) | ||||||
|
Net
Cash provided by (used for) Financing Activities
|
(4,458 | ) | (48,302 | ) | (55,612 | ) | ||||||
|
INVESTING
ACTIVITIES
|
||||||||||||
|
Investment
in Vessels
|
(9,92 | ) | 0 | (8,424 | ) | |||||||
|
Deposit
on Contract
|
0 | 0 | (18,000 | ) | ||||||||
|
Net
cash used by investing activitites
|
(9,92 | ) | 0 | (26,424 | ) | |||||||
|
Net
Increase in Cash and Cash Equivalents
|
28,816 | 13,571 | 1,613 | |||||||||
|
Beginning
Cash and Cash Equivalents
|
13,342 | 11,729 | 11,729 | |||||||||
|
Ending
Cash and Cash Equivalents
|
42,158 | 25,300 | 13,342 | |||||||||
NORDIC
AMERICAN TANKER SHIPPING LIMITED
Reconciliation
of non-GAAP financial measures
(Amounts
in USD '000)
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||
|
Jun.
30,
2008
|
Mar. 31,
2008
|
Jun.
30,
2007
|
Jun.
30,
2008
|
Jun.
30,
2007
|
||||||||||||||||
|
Voyage
revenue
|
66,201 |
51,726
|
54,666 | 117,927 | 112,716 | |||||||||||||||
|
Voyage
expenses
|
(2,952 | ) | (4,851 | ) | (10,342 | ) | (7,803 | ) | (23,787 | ) | ||||||||||
|
Net voyage revenue
(1)
|
63,249 | 46,875 | 44,324 | 110,124 | 88,929 | |||||||||||||||
|
Three
Months Ended
|
||||||||||||
|
Jun.
30,
2008
|
Mar.
31,
2008
|
Jun.
30,
2007
|
||||||||||
|
Income
from vessel operations
|
36,135 | 25,030 | 23,808 | |||||||||
|
Depreciation
|
11,958 | 11,414 | 10,422 | |||||||||
|
Share
Based Compensation/ Stock Option Plan/Pension Cost
|
4,129 | 507 | 429 | |||||||||
|
Operating Cash Flow
(2)
|
52,222 | 36,951 | 34,659 | |||||||||
|
(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: August
8, 2008
|
By:
|
/s/ Herbjørn Hansson
|
|
|
Herbjørn
Hansson
|
||
|
Chairman,
Chief Executive Officer and
President
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SK 01318 0002
909254