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Nordic American Tankers Continued to Fall in 3Q17

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Nordic American Tankers Continued to Fall in 3Q17 PART 1 OF 5

Nordic American Tankers Was Weaker in 3Q17

3Q17 results

Nordic American Tankers (NAT) reported revenues of $23.6 million—10.8% lower than Reuters’ estimate. Its EBITDA (earnings before interest, tax, depreciation, and amortization) was 168% lower than the estimate.

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Highlights of 3Q17

  • In 3Q17, the company achieved a time charter equivalent of $10,600 per day. It’s lower than the company’s cash break-even cost of $11,500 per day that it stated in the second quarter. It resulted in a net operating loss of $0.7 million in 2Q17.
  • Nordic American Tankers’ net debt at the end of the third quarter stood at $341.5 million or $11.4 million per vessel—the lowest in the industry.
  • In the third quarter, Nordic American Tankers signed four time charter contracts. The contracts have various durations up to two years with floor rates above the cash breakeven and profit sharing options.
  • There have been discussions about new sulfur requirements on ships to be effective in 2020. Nordic American Tankers’ 33 Suezmax vessels will run on 0.10% sulfur content or less.

Stock performance

Nordic American Tankers stock hasn’t had a good run since the beginning of the year. So far, the stock has a negative return of 48.4% YTD. The following are the YTD returns as of November 9, 2017, for other crude tanker companies:

  • Tsakos Energy Navigation (TNP) fell 4.3%.
  • Frontline (FRO) fell 13.9%.
  • DHT Holdings (DHT) fell 2.9%.
  • Euronav (EURN) rose 6.9%.
  • Navios Maritime Partners (NAP) fell 25%.
  • Teekay Tankers (TNK) fell 34.9%.
  • General Maritime Partners (GNRT) rose 5.8%.

Shipping companies account for 19.7% of the Guggenheim Shipping ETF (SEA). SEA rose 3.1% YTD. If you’re interested in broad exposure to the industrial sector, you could invest in the SPDR Dow Jones Industrial Average ETF (DIA).

Series overview

In this series, we’ll discuss Nordic American Tankers’ 3Q17 results. We’ll take a look at industry’s orderbook, the company’s fleet, and its newbuild pipeline.

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