Nordic American Tankers Limited was founded on June 12, 1995 under the name
Nordic American Tanker Shipping Limited and organized under the laws of the
Islands of Bermuda and we maintain our principal offices at LOM Building, 27
Reid Street, Hamilton HM 11, Bermuda. Our telephone number at such address is
(441) 292-7202. We are an international tanker company that currently owns 24
Suezmax tankers, two of which are newbuildings which average approximately 156,000
dwt each. The vessels in our fleet are homogenous and interchangeable, which
is a strategy that we refer to as the "Nordic American System". We
were formed for the purpose of acquiring and chartering three double-hull Suezmax
tankers that were built in 1997. In the autumn of 2004, we owned three vessels
and at the end of 2014 we owned 24 vessels, including two newbuildings currently
under construction. We expect that our fleet expansion process will continue
over time and the addition of more vessels.
In January 2013, we acquired Scandic and Orion Tankers Ltd, or Orion, as wholly
owned subsidiaries. Accordingly, these financial statements are presented on
a consolidated basis for us and our subsidiaries, which we refer to as the Company
or the Group.
The Nordic American System:
It is essential for us to have an operating model that is sustainable in both
a weak and a strong tanker market, which we believe differentiates us from other
publicly traded tanker companies. The Nordic American System is transparent
and predictable. As a general policy, the Company has a conservative risk profile.
Our dividend payments are important for our shareholders, and at the same time
we recognize the need to expand our fleet under conditions advantageous to us.
All of our 24 tankers are Suezmaxes. Suezmaxes can carry one million barrels
of oil and are highly versatile, able to be utilized on most long-haul trade
routes. A homogenous fleet streamlines operating and administration costs, which
helps keep our cash-breakeven point low.
We maximize cash flows by employing all of our vessels in the spot market.
The spot market gives better earnings than the time charter market over time.
Growth is a central element of the Nordic American System. It is essential
that we grow accretively, which means that over time our transportation capacity
increases more percentagewise than our share count.
Our valuation in the stock market should not be based upon net asset value
(NAV), a measure that only is linked to the steel value of our ships. We have
our own ongoing system value with a homogenous fleet.
We pay our dividend from cash on hand. We have a cash break-even level of about
$12,000 per day per vessel, which we consider low in the industry. The cash
break-even rate is the amount of average daily revenue our vessels would need
to earn in the spot tanker market in order to cover our vessel operating expenses,
cash general and administrative expenses, interest expense and all other cash
charges.
We are an international tanker company that owns 24 double-hull Suezmax tankers,
two of which are newbuildings that average approximately 156,000 dwt each. Our
Suezmax tankers are interchangeable assets within the Orion Tankers pool, as
any vessel may be offered to a charterer for any voyage.
Until November 24, 2011, we chartered all of our vessels in the spot market
pursuant to a cooperative arrangement with Gemini.
In November 2011, the Orion Tankers pool was established and was then owned
equally by us and Frontline. Orion served and continues to serve as manager
of the pool. Upon completion of previously fixed charters within the Gemini
arrangement, we transferred our vessels to the Orion Tankers pool. In September
2012, upon announcement that we would acquire Frontlines remaining interest
in Orion, Frontline withdrew its nine Suezmax vessels from the Orion Tankers
pool. Effective January 2, 2013, we acquired all of Frontlines shares in Orion
at their nominal book value as of December 31, 2012, after which Orion Tankers
became our wholly-owned subsidiary.
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