Nordic American Offshore Ltd. (NYSE:NAO) – 4Q2017 Earnings Report – Dividend declared – 3 modern PSVs reactivated and will resume trading
Link to the complete 4th Quarter 2017 report:
Hamilton, Bermuda, February 8, 2017.
Nordic American Offshore Ltd (“NAO” or the “Company”) owns and operates a fleet of 10 Platform Supply Vessels (PSV) each averaging approximately 4,000 DWT in size and with an average age just over 4 years. The vessels are primarily engaged in the North Sea offshore market. We are now optimistic for the North Sea market and we have decided to activate our 3 modern vessels in lay-up after which all our vessels are active. Having an attractive fleet, with all our vessels fully operational, improved market conditions should allow for immediate improvement in our financial results.
Results for the fourth quarter came in lower compared with third quarter 2017. The Net Operating Result was -$7.1m for 4Q2017 as compared with -$4.8m for 3Q2017. The Adjusted Net Operating Result was -$2.8m as compared to -$0.2m for 3Q2017. 4Q2017 showed an improvement on 4Q2016 of about $1.5 million.
The basic features of NAO are similar to the business model of the NYSE listed tanker company Nordic American Tankers Limited (“NAT”). NAT holds 16.1% of NAO’s common shares. The Executive Chairman of NAO and his immediate family hold 13.4% of NAO’s commons shares.
The Board of Directors of NAO has declared a dividend of $0.02 per share for 4Q2017 to shareholders of record as of February 23, 2018. The payment of the dividend is expected to take place on or about March 13, 2018. Since its establishment in late 2013, NAO has paid dividends for 16 consecutive quarters, totaling $2.67 per share, including the dividend to be paid March13, 2018.
NAO pursues a conservative financial policy. At the end of 4Q2017, the net debt per vessel was $10.2 million. The Company has a waiver for certain loan covenants, which expires in April 2018 and we expect this to be extended.
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.
For further details on our financial position, please see the financial information reported below and this entire release. Our 2016 Annual Report (Form 20-F) contains information about NAO. This report was filed with the SEC April 24, 2017. It is also available on our web site at www.nao.bm.
Strategy Going Forward
The main elements of NAO’s strategy are based on quarterly dividends, low G&A costs and liquidity in the stock.
We seek to achieve a competitive cash yield and a satisfactory Total Return, a precise measure of value creation.
NAO is committed to protecting its underlying earnings, dividend potential and strong balance sheet. We shall endeavor to safeguard and further strengthen NAO’s position in a deliberate, predictable and transparent way.
We encourage investors interested in the offshore sector to consider buying shares in NAO.
Link to the graph: http://hugin.info/159489/R/2167307/834315.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 Exchange Commission.
Gary J. Wolfe
Seward & Kissel LLP
New York, USA
Tel: +1 212 574 1223
Marianne Lie, Executive Vice Chair
Nordic American Offshore Ltd.
Tel.: +47 91 64 55 06
Bjørn Giæver, CFO
Nordic American Tankers Limited
Tel: +1 888 755 8391 or +47 91 35 00 91
Herbjørn Hansson, Executive Chairman
Nordic American Offshore Ltd.
Tel: +1 866 805 9504 or +47 90 14 62 91
 Adjusted Net Operating Result represents Net Operating Result before depreciation and non-cash administrative. charges.
 Net debt is working capital less long term debt divided by 10 vessels.
 Total Return is defined as stock price plus dividends, assuming dividends are reinvested in the stock.