Hamilton, Bermuda, August 26, 2015
Although not much time has passed since we released our 2Q2015 report, I would like to share a few points with you at this time. As we pointed out in our message to you in November 2014, a low oil price is good for the tanker industry. There is one main reason why the price of oil is down – and that is increased production and supply of crude oil. As it stands, demand is strong but high OPEC production has resulted in increased supply of oil. The strong tanker market in the last year or so reflects that reality, and thus we have experienced both an increase in the demand for our vessels and in the rates we are able to charge for our services. As of now, we expect the significant volumes of oil being transported to continue.
As we mentioned in our 2Q2015 report, the third quarter is off to a strong start. At this time we expect the result for the third quarter to be about in line with the results of the first and second quarter of 2015.
In the second quarter 2015, NAT generated $0.61 per share in net operating cashflow and declared a $0.40 per share dividend. Recent fluctuations in tanker rates seen in reports by brokers should be taken with a grain of salt and do not at all represent a difficult situation for suezmax tanker owners.
Once again, we would also point out the quality of our fleet. From time to time some observers talk about the age of a vessel, but quality is the most important aspect. Our vessels are in excellent technical condition, which is reflected in our vetting statistics – these are the results of inspections by our customers. Research analysts and financial bloggers do not charter our vessels; the oil majors do and they are very satisfied with the quality of our fleet. Recently, we announced the acquisition of two modern suezmax tankers, and we reiterate that we do not plan an equity offering in conjunction with these vessels or the newbuildings delivering in 2016/2017.
In my view, there is no basis in the tanker business for the wild gyrations we have seen in the stock market recently. Our conservative attitude with low debt will continue.
Finally, I would like to point out that you and I remain, quite literally, in the same boat. Recently, a company owned by myself and my family made a significant further investment in NAT, reflecting our confidence in both the company and the outlook for the industry. This is a case of management eating its own cooking, and confidence cannot be expressed more clearly than that. We are one of the largest shareholders in NAT.
I wish you all the best for the rest of the summer.
Chairman & CEO