NAT suffers operating cash flow fall

Nov 11 2016

Nordic American Tankers (NAT) reported a third quarter 2016 operating cash flow fall to $21.7 mill, which included a settlement gain of $5.3 mill with Gulf Navigation, compared to $40.7 mill and $49.1 mill in 2Q16 and 3Q15, respectively.

NAT said that it continued to maintain a strong balance sheet with low net debt and focuses on keeping a low financial risk.

At the end of 3Q16, the company had net debt of about $248 mill or about $8.5 mill per vessel.

As of 10th November, 2016 has been a very good year for NAT, the company said. The 3Q16 result came out higher than the cash breakeven level, while the fourth quarter has so far yielded a good performance.

About 60% of the available days in 4Q16 have been fixed at significantly higher levels than the average daily rates of $16,700 seen in 3Q16 for those vessels on short term and longer term employment contracts.

As a result of the success of the recent placement of $120 mill, in which 70% was subscribed by institutional investors, NAT contracted three newbuildings at Samsung to increase the Suezmax fleet from 30 to 33.

The three newbuilding Suezmaxes are to be delivered during the second half of 2018.

Since its establishment, NAT claimed to have pursued a well-tested strategy that is producing high total return (ie profitability) and dividend yields. NAT said that its cash break-even rate was below $11,000 per day per ship, including financial charges and G&A costs.

NAT also said that the vessel opex are considered to be low - about $8,400 per vessel per day. Opex for each vessel is more or less the same, as a result of strict maintenance procedures. The drydocking costs for the vessels of over 15 years of age are on average less than $2 mill per vessel, which is at the same level as the rest of the fleet.


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