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 February 2006
NORDIC AMERICAN TANKER SHIPPING LIMITED
(Translation of registrant's name into English)
Reid House
31 Church Street
Hamilton HM FX
Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
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]
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto as Exhibit 1 is a copy of the press release issued by
Nordic American Tanker Shipping Limited (the "Company") on February 7, 2006,
announcing its dividend and earnings in respect of the 4th quarter 2005.
[GRAPHIC OMITTED]
Exhibit 1
Nordic American Tanker Shipping Ltd. (NAT)-(NYSE:NAT)
Announces dividend and earnings in respect of the 4th quarter 2005.
Hamilton, Bermuda, February 7th 2006
Nordic American Tanker Shipping Limited (the "Company") today announced its
results for the 4th quarter of 2005. The tanker market was significantly
stronger in the 4th quarter of 2005 than in the preceding quarter, producing
solid earnings per share and giving room for the highest quarterly dividend
payment per share since the Company's inception. The Company has now declared a
dividend over the past 33 consecutive quarters since the autumn of 1997. A solid
tanker market has continued into 2006.
Highlights:
-----------
o The Board of Directors has declared a dividend of $1.88 per share for
the 4th quarter of 2005
o 4th quarter 2005 net income was $1.51 per share.
o The Company's earnings from vessels in the spot market during the 4th
quarter 2005 were much higher than in the 3rd quarter 2005 reflecting
the strengthened conditions across all tanker market segments. The
Imarex Index for Suezmax vessels in 4th quarter 2005 was $64,002 per
day compared to $24,677 per day in the 3rd quarter 2005.
o The Company's 8th vessel, the Nordic Saturn, joined the fleet on
November 7th, producing revenues in 53 days of the 4th quarter.
o No vessels were in drydock during the 4th quarter.
Dividend per Share, Earnings per Share and Financials:
-----------------------------------------------------
The Company's growth policy - manifested by its expansion from three to eight
vessels in 14 months - has bolstered the Company's earnings and our ability to
pay dividends. The 4th quarter 2005 earnings show that the Company's policy of
growth through accretive acquisitions has produced positive results.
The Board has declared a dividend of $1.88 per share in respect of the 4th
quarter of 2005. This compares to a dividend of $1.62 in respect of the 4th
quarter of 2004. The 3rd quarter 2005 dividend was $0.60 per share. The dividend
of $1.88 will be paid on or about March 2nd to shareholders of record as of
February 16th 2006.
Net income was $25.1m for the 4th quarter of 2005 or $1.51 per share (EPS). This
compares to a net income of $8.8m or $0.79 per share for the 4th quarter of
2004. The net income for the third quarter of 2005 was $4.3m or $0.26 per share.
Operating cash flow(*) was $32.8m in the 4th quarter of 2005 compared to $20.4m
in the 4th quarter of 2004. The operating cash flow for the 3rd quarter of 2005
was $10.4m.
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(*) 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 certain
non-cash administrative charges. Please see page 6 for a reconciliation of
this non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
No vessels were in dry dock during the 4th quarter 2005 and there are no vessels
scheduled for dry dockings during the 1st quarter of 2006.
The table below shows the number of vessel revenue days over the last five
quarters for all the vessels, reflecting the growth of the company.
Period 4q04 1q05 2q05 3q05 4q05
--------------------------------------------------------------------------------
Revenue days 314 371 549 576 697
For the 4th quarter of 2005, operating costs of our vessels and general and
administrative costs were according to our expectations.
Earnings per share for the 4th quarter 2005 were impacted by a non-cash general
and administrative charge of $0.4m associated with the 2004 stock option plan.
At year-end 2005 the exercise price for these options exceeded the Company's
share price on the NYSE. For further details on the accounts, please see at the
end of this message.
Seven of the Company's eight vessels are now trading in the spot market or on
spot related terms, whilst one ship remains employed on a long term fixed rate
charter.
The Market:
-----------
According to the spot assessment of the Imarex Tanker Index, which gives an
indication of the level of the spot market, Suezmax spot rates were on average
$64,002 for the 4th quarter of 2005, compared to $24,677 per day during the 3rd
quarter of 2005. The Imarex index for Suezmax spot rates were on average $47,269
per day for January 2006.
The Suezmax market in the 4th quarter of 2005 shows tight supply of vessels,
leaving the market finely tuned with high capacity utilization.
The world's Suezmax fleet stood at 324 vessels at the end of the 4th quarter
2005, compared with 303 vessels at the start of 2005. Seventy-seven (77) Suezmax
vessels were single hull which are expected to be mandatorily phased out by
2010. There were sixty seven (67) Suezmax vessels on order at the end of the 4th
quarter 2005.
The Company's expressed policy is to own only modern double hull vessels. For
the Company it is therefore particularly interesting to note that two major oil
companies have adopted a policy of not chartering single hull vessels in advance
of the regulatory change.
On the demand side the macro economic development of the Far East in particular
and also in the United States (both of whom import oil long distances) will
largely determine the demand for our tankers in the time to come.
In a recent report the Organization for Economic Cooperation and Development
(OECD) states that economic growth in China has averaged 9.5% per annum over the
past two decades and seems likely to continue at that pace for some time. China
is now to a larger degree than previously sourcing oil from areas such as West
Africa and Venezuela. Change in trading patterns could therefore impact the
transportation demand.
According to the International Energy Agencies (IEA), world oil demand is
expected to increase by 2.2% in 2006 as compared with 1.3% in 2005, pointing at
rebounding demand in the United States and China.
On the supply side, the deliveries of tankers over the next 24 to 36 months from
the shipyards can be estimated with a high degree of certainty, as the shipyards
more or less are expected to operate at full capacity with their present order
books. While it is expected that short term spot rates may vary significantly
and continue to be volatile, the supply and demand tanker market fundamentals
are in the Company's view positive - a finely tuned balance with high capacity
utilization.
*****
The Company has an established and unique operating model. The main objective of
the Company continues to be value creation via a transparent, predictable and
simple strategic platform. For the foreseeable future, the Company intends to
continue building on the same basis. The Company wishes to maintain a high
exposure to the spot market whilst a certain amount of term charter coverage is
also being contemplated.
The full dividend payout policy will continue. In this phase of development and
with our present fleet the Board has determined that the Company intends to
target non-retiring debt on the balance sheet in the region of $130m, which is
the present level. Two (25%) out of eight vessels are now debt financed as the
Company took on this debt in connection with the last two vessels which were
delivered to the Company in August 2005 and November 2005. In the Company's view
this is an appropriate debt/equity ratio for the Company. The dividend is
calculated on the basis of net operating cash flow(**) divided by the
outstanding number of shares.
----------
(**) Net operating cash flow represents net income plus depreciation and certain
non-cash administrative charges. In view of the Company`s policy of
maintaining a certain level of debt on its balance sheet, the Company is
calculating its dividend on the basis of net operating cash flow.
The Company is focusing on maintaining a strong balance sheet with low debt to
equity ratio and a low cash breakeven. A growth strategy is an inherent part of
the Company's operating model. This strategy will continue.
NORDIC AMERICAN TANKER SHIPPING LIMITED
Amounts in USD '000
CONDENSED STATEMENTS OF OPERATION
Three Months Ended Twelve Months Ended
---------------------------------------------------------------------------
Dec. 31, Dec. 31, Sept. 30, Dec. 31,
2005 2004 2005 2005 Dec. 31,
(unaudited) (unaudited) (unaudited) (unaudited) 2004
------------------------------------------------------------------------------------------------------------------
NET VOYAGE REVENUE 37,571 22,711 14,405 86,129 62,526
OPERATING EXPENSES
Vessel operating expenses (3,510) (1,818) (3,144) (11,221) (1,977)
Depreciation (5,796) (1,795) (4,842) (17,529) (6,918)
------------------------------------------------------------------------------------------------------------------
General and administrative costs (1,617) (9,699) (1,170) (8,492)* (1,0851)
------------------------------------------------------------------------------------------------------------------
(10,923) (13,312) (9,156) (37,242) (19,746)
Income from vessel operation 26,648 9,399 5,249 48,887 42,780
OTHER ITEMS
Interest income 129 101 170 850 142
Interest expense (1,674) (708) (1,101) (3,420) (2,106)
------------------------------------------------------------------------------------------------------------------
(1,545) (607) (931) (2,570) (1,964)
------------------------------------------------------------------------------------------------------------------
NET INCOME 25,103 8,792 4,318 46,317 40,816
------------------------------------------------------------------------------------------------------------------
Earnings per average number of shares 1.51 0.79 0.26 3.03 4.05
------------------------------------------------------------------------------------------------------------------
Weighted average number of shares 16,644,496 11,185,664 16,644,496 15,263,622 10,078,391
------------------------------------------------------------------------------------------------------------------
Common shares outstanding 16,644,496 13,067,838 16,644,496 16,644,496 13,067,83
*) The G&A for the twelve months ended Dec. 31, 2004 and Dec. 31, 2005 include non-cash charges of $9.2m and
$3.6m respectively which are one time charges related to the issuance of restricted shares in connection
with the follow-on offering of November 2004 and March 2005.
CONDENSED BALANCE SHEETS
Dec. 31, 2005 Dec. 31, 2004
(unaudited)
--------------------------------------------------------------------------------
Cash deposits 14,240 30,732
Other assets 27,671 6,170
Vessels 463,933 187,301
--------------------------------------------------------------------------------
Total Assets 505,844 224,203
--------------------------------------------------------------------------------
Accounts payable and accrued liabilities 4,972 2,335
Long-term debt 130,000 0
Shareholders' equity 370,872 221,868
--------------------------------------------------------------------------------
Total liabilities and shareholders' equity 505,844 224,203
CONDENSED STATEMENTS OF CASH FLOW
Twelve months ended
--------------------------
Dec. 31, Dec. 31,
2005 2004
(unaudited)
--------------------------------------------------------------------------------
OPERATING ACTIVITIES
--------------------------------------------------------------------------------
Net cash from Operating Activities 51,056 62,817
--------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from sale of Common Stock 161,967 112,138
Proceeds from use of Credit Facility 135,000 96,000
Repayment of debt (5,000) (126,000)
Loan facility costs (1,075) (1,456)
Dividends paid (64,279) (47,196)
--------------------------------------------------------------------------------
Net Cash provided 4by (used for) Financing Activities 226,613 33,486
--------------------------------------------------------------------------------
INVESTING ACTIVITIES
Investment in Vessels (294,161) (66,137)
--------------------------------------------------------------------------------
Net cash used by investing activities (294,161) (66,137)
--------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents (16,492) 30,166
Beginning Cash and Cash Equivalents 30,732 566
--------------------------------------------------------------------------------
Ending Cash and Cash Equivalents 14,240 30,732
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.
[GRAPHIC OMITTED]
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
Chief Financial Officer
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: February 16, 2006 By: /s/ Herbjorn Hansson
--------------------------
Herbjorn Hansson
Chairman, Chief Executive Officer
and President
01318 0002 644886