Nanette Real Estate N.V (LSE:NAT)
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Nordic American Tanker Shipping Ltd. (NAT) - (NYSE: NAT) (OSE:
NAT) Letter to the Shareholders
HAMILTON, Bermuda, Dec. 17 /PRNewswire-FirstCall/ -- Dear Shareholder:
With 2004 coming to a close, I would like to send you this message, providing a
snapshot of where we stand at this time.
2004 has been a very exciting year for NAT, the most notable development being
that the company has been turned into an operating company. Thereafter, the
company may expand its operations. NAT could not do that in the past because of
the Bye Laws of the company. Two of our ships (Nordic Hawk and Nordic Hunter)
have been rechartered to BP on time charters for three years at market related
rates -- in direct continuation of the BP contracts that expired in September
and October. According to the terms of the contracts, NAT will receive the spot
market rate minus five per cent according to an agreed formula which contains
neither a floor nor a ceiling.
The market related rates for our two ships that are chartered to BP eliminate
the risk of not finding immediate employment in the spot market and are an
attractive alternative to the costs of rapidly building a spot chartering
operation in-house. Since NAT has become an operating company, NAT has assumed
the responsibility of providing crews and of operating the ships technically.
These functions have been outsourced to a first class technical manager of high
reputation.
The company became an operating company on October 18th 2004 when the last
charter from BP was rearranged. A short time thereafter we acquired the
1997-built double hull Suezmax tanker, the Wilma Yangtze. The ship was
chartered back to the seller under a contract that expires at the end of
January 2005. The addition of Wilma Yangtze to our fleet is accretive to our
earnings and dividend compared with a fleet of three ships, and that vessel
remains accretive irrespective of spot rate levels in the future. Starting in
February 2005, we expect that we shall have three ships in the spot market for
the time being. The fourth ship is on long term contract -- providing us with
what we believe to be the lowest cash break even among tanker companies that
are publicly listed.
It is the expressed policy of the Board to pursue a high dividend payout
policy. Another important dimension of our strategic platform is expansion of
our fleet of high quality and environmentally friendly vessels.
The focus on the environment is a never ending process. During the last few
weeks there have been two incidents involving vessels, unconnected with us, in
US waters, one in Alaska and one near Philadelphia, incidents receiving a lot
of attention in the press. This development puts even greater focus on the need
for first class technical operations, good ships and protection of the
environment. As you know, our double hull ships are of a first class standard.
Relatively speaking, NAT now has the strongest balance sheet among publicly
traded companies in the tanker industry, having no debt. In addition, we have
been able to raise a USD 300 million credit line which is a forceful tool for
expansion. This credit line has been provided by four top rated international
shipping banks and is a sign of the trust that these banks have placed in our
company.
Given the strength of our balance sheet, our policy in general is not to
accumulate cash over time in the company. We are of the view that the cash
belongs to you, our shareholders. In our view, it is also expensive to carry
cash on the balance sheet compared with the price of having the credit line.
We wish to expand when the timing is right. However, growth should not take
place at the expense of profitability and our ability to continue to pay
dividends.
Shipping rates have shown great volatility in the past and are difficult to
predict. During the last months the market has been very strong. A good
tanker company management in our judgement does not so much try to predict
rates as it must plan to be successful in the midst of uncertainty. At the time
of writing, spot rates are strong although the market traditionally slows down
towards the end of the year. Rates may rise from here, they may remain at the
same level or they may drop.
Our general view is that the tanker market dynamics are favourable. However,
based upon our long experience in the industry, we know that the future may
take another course. For NAT, with our goal of serving our shareholders in the
most efficient manner, it is always a question of adapting to the market as the
market may develop. We now have a very good foundation for the further
development of the company.
In addition to shareholders, our valued customers represent a very important
constituency. I am very pleased to report that we enjoy a high reputation with
all our friends in the oil industry -- also a platform on which to build in the
future. Our focus on customers will never cease.
Our policy is that any project that we may undertake must be accretive to
earnings and dividends per share. We do not intend to deviate from that policy.
We are overwhelmed by the support shareholders give our company. Many of you
are in direct communication with us, expressing views and comments on the
status of the company. Such an active approach is very much appreciated.
I take this opportunity to wish all of you the best for Christmas and for the
New Year. We always welcome and encourage your active participation in the
development of the company. Please see our website: http://www.nat.bm/ where
you find all the contact details.
Again, thank you very much!
Sincerely,
Herbjorn Hansson
Chairman and CEO
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 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- 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 and our Annual Report on Form 20-F.
Contacts: Scandic American Shipping Ltd
Manager for
Nordic American Tanker Shipping Ltd.
P.O Box 56
3201 Sandefjord
Norway
Tel: + 47 33 42 73 00 E-mail:
Web-site: http://www.nat.bm/
Rolf Amundsen
Chief Financial Officer
Nordic American Tanker Shipping Ltd.
Tel: +1 800 601 9079 or + 47 908 26 906
Gary Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Herbjorn Hansson
Chairman & CEO
Nordic American Tanker Shipping Ltd.
Tel: +1 866 805 9504 or + 47 901 46 291
DATASOURCE: Nordic American Tanker Shipping Ltd.
CONTACT: Scandic American Shipping Ltd, Manager for Nordic American
Tanker Shipping Ltd., + 47-33-42-73-00, ; Rolf
Amundsen, Chief Financial Officer, 1-800-601-9079, +47-908-26-906, or Herbjorn
Hansson, Chairman & CEO, 1-866-805-9504, +47-901-46-291, both of Nordic
American Tanker Shipping Ltd.; Gary Wolfe of Seward & Kissel LLP, New York,
USA, +1-212-574-1223, for Nordic American Tanker Shipping Ltd.
Web site: http://www.nat.bm/