Nordic American Tankers (NAT) has reported much higher profits for its first quarter as spot rates for its Suezmax fleet surged.
NYSE-listed NAT reported net income of USD30.3 million in 1Q15 compared with USD4 million in 1Q14. Average time charter equivalent rates in the latest quarter averaged USD37,000/day, up by 41% compared with USD26,300/day in the same period last year and up by 54% compared with USD24,000/day in the preceding quarter (4Q14).
The Herbjorn Hannson-led Suezmax specialist did not disclose interim rates for the current quarter but said that “so far the 2Q15 tanker market is encouraging”.
NAT has two newbuilds on order for deliveries in 2016 and 2017. NAT could have issued a dividend of USD0.57/share based on full pay-out of operating cash flow in the latest quarter, but opted for a dividend of USD0.38/share “in view of the cash costs of the two newbuildings”. Construction costs “will not require the additional raising of equity from capital markets”, NAT affirmed.
The company estimated that the global Suezmax totalled 448 vessels at the end of 1Q15 and that the current orderbook totalled 68 vessels for deliveries through mid-2017. Only six are scheduled for delivery in the remainder of 2015 and NAT expects “the real number of deliveries for the rest of the year to be lower”.