FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of July 2006
NORDIC AMERICAN TANKER SHIPPING LIMITED
(Translation of registrant's name into English)
Thistle House
4 Burnaby Street
Hamilton, HM 11
Bermuda
(Address of principal executive offices)
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): ___
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: ___
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): ________.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto as Exhibit 1 is the financial and operating results of
Nordic American Tanker Shipping Limited for the second quarter of 2006.
[GRAPHIC OMITTED]
Exhibit 1
Nordic American Tanker Shipping Ltd. (NAT)-(NYSE:NAT) - Announces Dividend and
Earnings in respect of the 2nd Quarter of 2006
Hamilton, Bermuda, July 27, 2006
Nordic American Tanker Shipping Limited (the "Company") today announced its
results for the 2nd quarter of 2006. Although weaker than the traditionally
strong 1st quarter, the tanker market was solid during the 2nd quarter. A strong
summer market continues into the 3rd quarter and the future Imarex quotations
indicate expectations of a strong market going forward. The Company has now
declared a dividend for 35 consecutive quarters. For the last four quarters
including the 2nd quarter of 2006, a total of $5.13 has been paid in dividends
which is equal to 16.3% of the average daily share price over the same period.
Highlights:
-----------
o The Board of Directors has declared a dividend of $1.07 per share for
the 2nd quarter of 2006.
o The 2nd quarter 2006 net income was $0.68 per share.
o The Company's 9th vessel, the Nordic Jupiter, joined the fleet on
April 10th, generating revenues on 81 days of the 2nd quarter.
o No vessels were in dry dock during the 2nd quarter of 2006.
o The dividend is expected to be paid on or about August 31st to
shareholders of record as of August 16th 2006.
o Another acquisition was agreed on July 17th, increasing the fleet to
10 vessels.
o When comparing the 2nd quarter of 2006 with the comparable period last
year we see that important parameters are up, such as earnings per
share (+19%), dividend per share (+27%), net income (+51%) and sales
(+64%), indicating the growth and solid profitability of the Company.
Dividends per Share, Earnings per Share and Financials:
-------------------------------------------------------
The Board has declared a dividend of $1.07 per share in respect of the 2nd
quarter of 2006. This compares to a dividend of $0.84 per share in respect of
the 2nd quarter of 2005. The 1st quarter 2006 dividend was $1.58 per share.
Net income for the 2nd quarter of 2006 was $14.2m or $0.68 per share (EPS). This
compares to a net income of $9.4m or $0.57 per share for the 2nd quarter of
2005. The net income for the 1st quarter of 2006 was $19.1m or $1.07 per share.
The earnings per share for the 2nd quarter of 2006 have been impacted by
non-cash charges of $0.05 per share in aggregate due to share based compensation
and grants under the 2004 Stock Option Plan.
Operating cash flow (1) was $23.5m in the 2nd quarter of 2006 compared to
$11.2m in the 2nd quarter of 2005. Operating cash flow for the 1st quarter of
2006 was $29.5m.
For the 2nd quarter of 2006, operating costs of our vessels and general and
administrative costs met our expectations.
We believe that our strong balance sheet provides room for further expansion of
our fleet which can be expected to take place during 2006. We have $207m
available under our $300m revolving credit facility which matures in 2010. There
is no repayment obligation during the tenure of the facility, and the Company
pays interest only on drawn amounts, and a small commitment fee for available
amounts.
No vessels were in dry dock during the 2nd quarter of 2006, and there are no
vessels scheduled for dry docking during the 3rd quarter of 2006.
The table below shows the number of vessel revenue days over the last seven
quarters for all the vessels, reflecting the growth of the Company.
Period 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06
-----------------------------------------------------------------------------
Revenue days 314 371 549 576 697 720 808
For further details on our financial results, please see later in this message.
The Fleet
---------
During the 2nd quarter eight of the Company's nine vessels were traded in the
spot market or on spot related terms, while one vessel remained employed on a
long term fixed charter rate.
Vessel Dwt Employment
----------------- ------- -----------------------------------------
Gulf Scandic 151,458 Long term fixed charter
Nordic Hawk 151,458 Spot related terms
Nordic Hunter 151,458 Spot related terms
Nordic Voyager 149,591 Spot
Nordic Fighter 153,181 Spot
Nordic Freedom 159,500 Spot
Nordic Discovery 153,181 Spot
Nordic Saturn 157,332 Spot
Nordic Jupiter 157,332 Spot
New acquisition 149,997 Spot or spot related terms from Nov. 2006
Total 1,534,488
The Market
----------
The spot market for suezmax tankers softened towards the end of the 1st quarter,
and this continued into the first part of the second quarter. According to the
spot assessment of the Imarex Tanker Index, which gives an indication of the
level of the spot market, rates for modern suezmax tankers were reported below
$25,000/day in mid-April. The market strengthened again thereafter, with average
earnings for modern suezmax tankers reported in the $40,000 - $50,000/day range
during the last part of the quarter.
The July 2006 spot market has so far been strong compared with July 2005. While
short term spot rates are notoriously difficult to predict, a seasonal downward
trend is normally expected in August and September. However, at the time of this
report it was possible to sell freight futures for the remainder of the 3rd
quarter at a level of $43,000 per day on TCE basis. The freight futures for the
4th quarter were at a level of $58,000 per day on TCE basis, indicating
expectations of a strong 4th quarter.
According to the International Energy Agency (IEA), global oil demand averaged
83.3m barrels per day in the 2nd quarter of 2006, a 1.9% decrease from the 1st
quarter of 2006. For the 3rd quarter and the 4th quarter, however, the oil
demand is expected to rebound to 84.7m and 86.3m barrels per day, respectively.
IEA expects world oil demand to increase by 1.4% in 2006 to 84.4m barrels per
day, and a further 1.8% growth in 2007 to 86.4m barrels per day. This is on the
back of a continued robust global economic outlook in particular in North
America and Asia. It is estimated that the oil demand in China alone will
account for 25-30% of the projected worldwide demand growth in 2006 and 2007.
Chinese interests have been investing in production capacity in other regions of
the world, including West Africa, and this is expected to have a positive impact
on the demand for crude oil tankers.
The world's suezmax fleet stood at 338 vessels at the end of the 2nd quarter
2006, compared with 334 vessels at the end of the 1st quarter 2006. 4 new
vessels were delivered during the quarter while no vessels were scrapped. 2 new
vessels have been ordered during the 2nd quarter of 2006, and the total suezmax
order book stood at 57 vessels at the end of the quarter. At the same time 57
vessels were single hull which are expected to be phased out by 2010. 14 new
vessels are expected to be delivered during the second half of 2006 (Source:
R.S. Platou Shipbrokers AS).
Deliveries of tankers over the next 24 - 36 months from the shipyards can be
estimated with a high degree of certainty. The shipyards are expected to operate
at more or less full capacity with their present order books, and new orders
placed for suezmax tankers are typically for delivery in late 2009 or in 2010.
While we expect that short term rates may continue to vary significantly, the
supply and demand tanker fundamentals are in the Company's view positive.
Strategy
--------
The Company is basing its operations on its unique and successful operating
model with a full dividend payout policy together with high spot market exposure
and a strong balance sheet. Focus is also on a cost effective management of the
company, in order to maintain a low cash break-even level for the vessels.
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. With a strong balance sheet, a full dividend
payout policy can be maintained without accumulating cash reserves on the
balance sheet. A certain amount of term charter coverage is also being
contemplated from time to time.
The main objective of the Company is to create value for shareholders via a
transparent, predictable and simple strategic platform. Growth is also an
inherent part of the operating model and further expansion can be expected. The
expansion of the Company is bolstering its earnings and dividend capacity.
*****
(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 5 for a reconciliation of this
non-GAAP measure as used in this release to the most directly comparable
GAAP financial measure.
NORDIC AMERICAN TANKER SHIPPING LIMITED
Amounts In USD '000
------------------------------------------------------------------------------------------------------------
CONDENSED STATEMENTS Three Months Ended Six Months Ended
OF OPERATION ----------------------------------- ------------------------
Jun. 30, Mar. 31, Jun. 30, Jun. 30, Jun. 30,
2006 2006 2005 2006 2005
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------------------------------------------------------------
NET VOYAGE REVENUE 29 574 34 958 18 003 64 532 34 153
OPERATING EXPENSES
Vessel operating expenses (4 842) (4 449) (2 986) (9 291) (4 498)
Depreciation (7 256) (6 285) (4 188) (13 541) (6 890)
General and administrative costs (2 175)* (3 839)* (1 297) (6 014) (5 774)
(14 273) (14 573) (8 471) (28 846) (17 162)
Income from vessel operation 15 301 20 385 9 532 35 686 16 991
OTHER ITEMS
Interest income 243 279 233 522 561
Interest expense (1 302) (1 580) (325) (2 882) (656)
(1 059) (1 301) (92) (2 360) (95)
NET INCOME 14 242 19 084 9 440 33 326 16 896
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Earnings per average number of shares 0.68 1.07 0.57 1.70 1.10
Weighted average number of shares 21 035 622 17 880 812 16 644 496 19 587 724 15 339 877
Common shares outstanding 21 046 400 21 029 700 16 644 496 21 046 400 16 644 496
*) The G&A for the three months ended Mar 31, 2006 and Jun. 30, 2006 include
non-cash charges of $2.9m and $0.9m respectively which are charges related
share based compensation and the 2004 Stock Option Plan.
-----------------------------------------------------------------------------------------
June 30, June 30, Dec. 31,
CONDENSED BALANCE SHEETS 2006 2005 2005
(unaudited) (unaudited) (unaudited)
-----------------------------------------------------------------------------------------
Cash deposits 13 633 18 310 14 240
Other assets 25 649 9 975 27 671
Vessels 520 680 337 401 463 933
Total Assets 559 962 365 686 505 844
-----------------------------------------------------------------------------------------
Accounts payable and accrued liabilities 8 485 1 087 4 972
Long-term debt 93 000 0 130 000
Shareholders' equity 458 477 364 599 370 872
Total liablilities and shareholders' equity 559 962 365 686 505 844
-----------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Twelve Months
CONDENSED STATEMENTS OF Six months ended Ended
CASH FLOW ------------------------- -------------
June 30, June 30, Dec. 31,
2006 2005 2005
(unaudited) (unaudited) (unaudited)
---------------------------------------------------------------------------------------------------
OPERATING ACTIVIITES
Net cash from Operating Activities 56 233 22 911 51 056
FINANCING ACTIVITIES
Net proceeds from sale of Common Stock 114 993 161 967 161 967
Proceeds from use of Credit Facility 79 000 0 135 000
Repayment of debt (116 000) 0 (5 000)
Loan facility costs 0 0 (1 075)
Dividends paid (64 545) (40 311) (64 279)
Net Cash provided by (used for) Financing Activities 13 448 121 656 226 613
INVESTING ACTlVlTlES
Investment in Vessels (70 288) (156 989) (294 161)
Net cash used by investing activitites (70 288) (156 989) (294 161)
Net Increase In Cash and Cash Equivalents (607) (12 422) (16 492)
Beginning Cash and Cash Equivalents 14 240 30 732 30 732
Ending Cash and Cash Equivalents 13 633 18 310 14 240
---------------------------------------------------------------------------------------------------
NORDIC AMERICAN TANKER SHIPPING LIMITED
Reconciliation of non-GAAP financial measures
(Amounts in USD '000)
--------------------------------------------------------------------------------
Three Months Ended Six Months Ended
Jun. 30, Mar. 31, Jun. 30, Jun. 30, Jun. 30,
2006 2006 2005 2006 2005
--------------------------------------------------------------------------------
Voyage revenue 40 600 45 179 27 281 85 779 46 525
Voyage expenses (11 026) (10 221) (9 278) (21 247) (12 372)
--------------------------------------------------------------------------------
Net voyage revenue(1) 29 574 34 958 18 003 64 532 34 153
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Three Months Ended
-------------------------------------
Jun. 30, Mar. 31, Jun. 30,
2006 2006 2005
--------------------------------------------------------------------------------
Income from vessel operations 15 301 20 385 9 532
Depreciation 7 256 6 285 1 297
Share Based Compensation/Stock Option Plan 949 2 881 380
--------------------------------------------------------------------------------
Operating Cash Flow(2) 23 506 29 551 11 209
--------------------------------------------------------------------------------
(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 requlred 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," "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, 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 Ltd.
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: nat@scandicamerican.com
Web-site: www.nat.bm
Rolf Amundsen, Investor Relations
Nordic American Tanker Shipping Ltd.
Tel: +1 800 601 9079 or + 47 908 26 906
Herbjorn Hansson, Chairman & CEO
Nordic American Tanker Shipping Ltd.
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: July 31, 2006 By: /s/ Herbjorn Hansson
-------------------------------------
Herbjorn Hansson
Chairman, Chief Executive Officer
and President
SK 01318 0002 690467
7/28/06