Link to the complete 2nd Quarter 2014 report:
Hamilton, Bermuda, August 6, 2014.
Press release about Nordic American Offshore Ltd.
Nordic American Offshore Ltd. ("NAO" or "the Company") earlier announced that it
has declared a dividend of $0.45 per share for 2Q2014. This is the same as for
1Q2014. The record date is August 18, 2014 and the payment of dividend is
expected to take place on or about August 29, 2014. Given that NAO was just
established at the end 2013, it is gratifying indeed that the Company has been
able to pay dividend so soon.
The Company had a successful IPO on the New York Stock Exchange in June 2014,
raising net proceeds of around $100 million. After the IPO, the shares issued in
the November 2013 private placement, which traded on the Oslo OTC market, were
exchanged for NYSE traded shares. At the time of this report, the total
sharecount is 23,431,370.
Following the previously announced Letters of Intent, the Company has entered
into firm newbuilding contracts with Vard Aukra shipyard in Norway for the
construction of two high-spec PSVs (platform supply vessels), which are expected
to be delivered to us in the third quarter of 2015. These vessels are in
addition to the two PSV newbuildings from the Ulstein yard that are expected to
be delivered in January 2015. The Company now has four vessels on order.
Key points to consider:
* Earnings per share in 2Q2014 were $0.23 compared with $0.10 for 1Q2014. The
weighted average number of shares was 17,620,124 in 2Q2014 as against
16,666,666 in 1Q2014.
* Net Income came to $4.1 million in 2Q2014 compared with $1.7 million in
1Q2014. Operating cash flow was $7.7 million vs $6.5 million in 1Q2014.
* The Company has at the time of this report no net debt and its $60 million
credit facility is undrawn.
* The IPO in June 2014 strengthened the equity of the Company by about $100
million. Since then the shares have increased in value while trading on the
* NAO has a capital base to increase its fleet from the present six vessels to
ten by September 2015.
* Our vessels were fully utilized this quarter, a reflection of the quality
and standard of our fleet and the Company's commercial strategy.
* Mr. Tor-?yvind Bj?rkli joined the Company as CEO in April 2014. Mr. Bj?rkli
has extensive experience, a long track-record and well-established
relationships in the oil/offshore industry. This will be a significant
benefit to NAO.
The Board has declared a cash dividend of $0.45 per share for 2Q2014 to
shareholders of record as of August 18, 2014. The payment date is about August
Net income for 2Q2014 was $4.1 million. Our net income of $1.7 million for the
first quarter of 2014 was impacted by a tax charge on operations of $1.2
million. We do not expect that such a charge will be incurred going forward. In
March 2014, NAO entered into the UK Tonnage Tax system. Our fleet currently
operates in the North Sea.
The Company's operating cash flow was $7.7 million in 2Q2014, compared with $6.5
million for 1Q2014.
Included in the G&A costs is about $0.4 million representing direct costs
associated with the start-up of NAO.
Including a planned expansion of the credit facility, the Company has the
financial resources to take delivery of its four newbuildings on order. We do
not expect to issue equity in connection with the delivery of these
As a matter of policy, the Company will always try to keep a strong balance
sheet with low net debt and a focus on limiting the Company's financial risk. At
the end of 2Q2014, net debt per NAO vessel in operation was zero.
The Company has in place a non-amortizing credit facility of $60 million, which
is undrawn at this time. Net working capital and undrawn amounts of the credit
facility amounted to about $128 million.
We concentrate on keeping our vessel operating costs low, while always
maintaining our strong commitment to safe operations. As we expand our fleet, we
do not anticipate that our administrative costs will rise correspondingly.
Our primary objective is to enhance total return for our shareholders, including
our quarterly dividend. The average rate achieved on the fleet is around
Our fleet is comprised of ten high-quality PSVs including four newbuildings. We
currently have six vessels in operation, all in the North Sea. Three are
operating in the UK sector and three are operating in the Norwegian Sector. The
vessels to be delivered next year may operate in either sector or elsewhere.
Please see the vessels and employment profile below.
Vessel Built Charterer Duration - firm periods
Blue Fighter 2012 Apache February 2015
Blue Prosper 2012 Apache November 2014
Blue Power 2013 BG UK April 2018
Blue Thunder 2013 Statoil October 2014
Blue Guardian 2013 Statoil October 2014
Blue Protector 2013 Statoil August 2014
Blue Viking Jan. 2015 N/A
Blue Storm Jan. 2015 N/A
Blue TBN I Jul. 2015 N/A
Blue TBN II Sep. 2015 N/A
The Company's objective is to ensure term employment for the fleet, including
for the newbuildings. The specifications of the fleet are by and large of the
same nature. NAO will seek to grow the fleet further with vessels matching our
clients' requirements. The expected delivery time for the newbuildings is listed
The PSV Market
The Company believes the market outlook for our PSVs is positive. An increased
number of drilling rigs creates demand for the Company's vessels. We expect a
well-balanced market going forward.
Several of our vessels are suitable for operations in Arctic conditions. There
is increasing activity in the Arctic region which we expect will increase demand
Strategy Going Forward
The main elements of the strategy of NAO have the same basis as Nordic American
The Company intends to grow its fleet. After an acquisition of vessels or other
forms of expansion, the Company should be able to pay a higher dividend per
share and produce higher earnings per share than had such an acquisition not
Our dividend policy will continue to enable us to achieve a competitively priced
risk adjusted cash yield and a positive total return over time compared with
that of other companies.
NAO is firmly committed to protecting its underlying earnings and dividend
Our Company is well positioned. We shall endeavor to safeguard and further
strengthen the position for our shareholders in a deliberate, predictable and
We encourage investors who seek exposure to the Offshore Supply Vessel sector to
consider shares in NAO.
* * * * *
Link to the graph: http://hugin.info/201/R/1846856/643947.pdf
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," "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 PSV
market, as a result of changes in the general market conditions of the oil and
natural gas industry which influence charter hire rates and vessel values,
demand in platform supply vessels, our operating expenses, including bunker
prices, dry docking and insurance costs, governmental rules and regulations or
actions taken by regulatory authorities as well as potential liability from
pending or future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to accidents or
political events, the availability of financing and refinancing, vessel
breakdowns and instances of off-hire and other important factors described from
time to time in the reports filed by the Company with the Securities and
Tor-?yvind Bj?rkli, Chief Executive Officer
Nordic American Offshore Ltd.
Tel: +47 90 62 70 14
Jacob Ellefsen, Manager, IR and Research, Monaco
Nordic American Offshore Ltd.
Tel: + 377 93 25 89 07 or + 33 678 631 959
Turid M. S?rensen, Chief Financial Officer
Nordic American Offshore Ltd.
Tel: +47 90 57 29 27
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Herbj?rn Hansson, Executive Chairman
Nordic American Offshore Ltd.
Tel: +1 866 805 9504 or + 47 901 46 291
 Operating cash flow is a non-GAAP number. Please see later in this
announcement for a reconciliation of operating cash flow to income from vessel
2nd Quarter 2014 Result:
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Source: Nordic American Tankers Limited via GlobeNewswire