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 November 2004
NORDIC AMERICAN TANKER SHIPPING LIMITED
(Translation of registrant's name into English)
Canon's Court
22 Victoria Street
Hamilton HM 12
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 is a copy of Management's Discussion and Analysis of
Financial Condition and Results of Operations and unaudited condensed interim
financial statements of Nordic American Tanker Shipping Limited (the "Company")
for the nine months ended September 30, 2004. Information furnished on this
Report of Foreign Private Issuer on Form 6-K shall be deemed to be incorporated
by reference in the Company's Registration Statement on Form F-3 (File No.
333-118128) and any related prospectus, including the Company's Prospectus filed
pursuant to Rule 424(b)(5) of the Securities Act of 1933, as amended, on
November 5, 2004.
NORDIC AMERICAN TANKER SHIPPING LTD (NAT)
Management's Discussion and Analysis of Financial Condition and Results
of Operations for the Nine Months Ended September 30, 2004
General
Nordic American Tanker Shipping Limited (the "Company") is an
international tanker company that owns three modern double-hull Suezmax tankers.
The Company was formed in June 1995 for the purpose of acquiring and chartering
three Suezmax tankers that were built in 1997. These three vessels were bareboat
chartered to BP Shipping Ltd. ("BP Shipping"), for a period of seven years. BP
Shipping redelivered two of the vessels to us in September and October 2004, and
is scheduled to redeliver the third vessel in November 2004. We have continued
our relationship with BP Shipping by time chartering to it the first two tankers
at spot market related rates for three-year terms. We have bareboat chartered
the third of our original three vessels to Gulf Navigation Company LLC ("Gulf
Navigation") of Dubai, U.A.E., for a term of five years at a fixed rate of
charterhire, subject to two one-year extensions at Gulf Navigation's option.
We have agreed to acquire one additional double-hull Suezmax tanker
built in 1997 from an unrelated third party. We expect to take delivery of our
new vessel in late November 2004. After a short term bareboat charter to the
present owner, we plan to deploy that vessel in the spot market over the near
term, commencing in the beginning of February 2005.
Bareboat Charters
We have chartered one of our vessels under a bareboat charter to Gulf
Navigation, for a period of five years, terminating in the fourth quarter of
2009, subject to two one-year extensions at Gulf Navigation's option. Under the
terms of the bareboat charter, Gulf Navigation is obligated to pay a fixed
charterhire for the entire period. During the charter period, Gulf Navigation
will generally be responsible for operating and maintaining the vessel and will
bear all costs and expenses with respect to the vessel.
Time Charters
We have chartered two of our vessels under spot market-related time
charters to BP Shipping for a period of three years each, terminating between
September 1 and October 31, 2007. The amount of charterhire payable under the
charters to BP Shipping is based on a formula design to generate earnings to us
as if we had operated the vessels in the spot market on two routes used for the
calculation, less 5%. Under the charter BP Shipping is responsible for all
voyage costs while the Company is responsible for providing the crew and paying
operating costs.
Spot Charters
After a short term bareboat charter to the present owner, we plan to
deploy our newly acquired vessel in the spot market commencing February 2005.
Tankers operating in the spot market typically are chartered on a single voyage
which may last up to several weeks. Tankers operating in the spot market may
generate increased profit margins during improvements in the tanker rates, while
tankers operating fixed-rate time charters generally provide more predictable
cash flows. Under a typical voyage charter in the spot market, we will be paid
freight on the basis of moving cargo from a loading port to a discharge port. We
will be responsible for paying both operating costs and voyage costs and the
charterer will be responsible for any delay at the loading or discharging ports.
Operating Results
For the period ending September 30, 2004, our only source of income
was from our three vessels under the charters to BP Shipping.
Our revenues from charterhire increased from $25,502,450 for the nine
months ended September 30, 2003, to $39,963,680 for the nine months ended
September 30, 2004, an increase of 56.7%. The increase in revenues was due to
higher tanker spot market rates in the nine month period in 2004, $48,618 per
day per vessel (time charter equivalent of $55,742 per day per vessel) compared
to $31,139 per day per vessel (time charter equivalent of $23,243 per day per
vessel) for the comparable period in 2003. The tanker spot market rates are
determined by the demand for the carriage of oil and the distance the oil is to
be carried, measured in tonne miles, and the supply of vessels to transport that
oil.
Vessel operating expenses was $110,500 for the nine months ending
September 30, 2004. The Company's bareboat charters with BP Shipping expired in
September and October 2004. Two of the Company's vessels are chartered to BP
Shipping under time charter agreements under which the Company will be
responsible for providing a crew and for maintaining the vessel. The Company did
not have vessel operating expenses for the comparable period in 2003 since all
the vessels were chartered to BP Shipping under bareboat charter agreements.
Under bareboat charter agreements all vessel operating expenses are paid by the
charterer.
Administrative expenses were $1,199,419 for the nine month period
ending September 30, 2004 compared to $373,619 for the comparable period in
2003, an increase of 221%. The increase was primarily due to costs associated
with our transition to an operating company. These costs are mainly due to
increased frequency of communication with shareholders, increased frequency of
board meetings, costs related to the redelivery of the three vessels from BP
Shipping, lawyers' fees and consulting fees.
Operating Income has for the nine month period ended September 30,
2004 increased 68.0% from the comparable period in 2003 primarily due to
increased revenue as described above.
Liquidity and Capital Resources
Cash flows provided by operating activities increased 36.6% for the
nine months ended September 30, 2004 to $36,207,539 compared to $26,496,596 for
the same period in 2003 due primarily to the increase in revenues.
Cash flow used in financing activities for the nine months ended
September 30, 2004 increased 39.2% to $36,205,927 compared to $26,013,874 for
the same period in 2003 due to the increase in dividends paid during 2004.
Through September 30, 2004, there have been no cash flows related to
investing activities.
In October 2004 the Company entered into a senior secured credit
facility (the "Credit Facility"), which consists of a $50 million revolving
credit facility and a $250 million revolving credit facility. The $50 million
facility will mature in October 2007 and the $250 million facility will mature
in October 2005, unless we exercise our one-year extension option or our option
to convert any drawn amounts to a five-year term loan. Amounts borrowed under
the Credit Facility will bear interest at a rate equal to LIBOR plus a margin
between 0.80% to 1.20% per year.
On November 8, 2004 the Company repaid our $30 million loan with
proceeds from our Credit Facility.
In October 2004 the Company entered into an agreement to acquire a
vessel for the purchase price of $66 million.
Our agreement with our manager, Scandic American Shipping Ltd. (the
"Manager"), formerly provided that the Manager would receive 1.25% of any gross
charterhire paid to us. In order to further align the Manager's interests with
those of the Company, the Manager agreed with us to amend the management
agreement to eliminate this payment, and on October 28, 2004, the Company issued
to the Manager 194,132 restricted common shares equal to 2% of our outstanding
common shares at par value. At any time additional common shares are issued, the
Manager will be able to purchase additional restricted common shares at par
value, $0.01, to maintain the number of common shares issued to the Manager at
2% of our total outstanding common shares. These restricted shares are
non-transferable for three years from issuance.
Please read this MD&A in connection with the MD&A filed in the Annual
Report on Form 20-F for the fiscal year ended December 31, 2003.
CONDENSED BALANCE SHEETS (Unaudited)
All figures in USD
September 30, December 31,
2004 2003
---------- ----------
ASSETS
Total Current Assets
Cash and Cash Equivalents 567,536 565,924
Accounts Receivables 9,643,970 8,142,307
Prepaid Finance Charges 75,000 14,475
Prepaid Insurance 11,669 91,667
Prepaid Other 327,270 0
------------ ------------
10,625,445 8,814,373
------------ ------------
Long-term Assets
Vessels 122,958,645 128,081,925
------------ ------------
Total Assets 133,584,090 136,896,298
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts Payable 879,948 0
Accrued Interest 26,875 38,322
Derivative Contract 231,000 1,150,000
Current Portion of Long-term Debt 0 30,000,000
----------- -----------
1,137,823 31,188,322
----------- -----------
Long-term Debt 30,000,000 0
----------- -----------
30,000,000 0
----------- -----------
SHAREHOLDERS' EQUITY
Common Shares, 97,066 97,066
par value $.01 per share,
issued and outstanding
(50 million
shares authorized; 9,706,606
issued and outstanding)
Accumulated Other
Comprehensive Loss (231,000) (1,150,000)
Additional Paid-in Capital 144,395,866 144,395,866
Accumulated Deficit (41,815,665) (37,634,956)
----------- -----------
Total Shareholders' Equity 102,446,267 105,707,976
----------- -----------
Total Liabilities and
Shareholders' Equity 133,584,090 136,896,298
----------- -----------
The accompanying notes are an integral part of the condensed financial
statements
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
All figures in USD
Nine Months Ended
September 30,
2004 2003
----------- ----------
Revenue 39,963,680 25,502,450
Vessel operating expenses (110,500) 0
Ship broker commissions (148,422) (138,206)
Administrative Expenses (1,199,419) (373,619)
Depreciation (5,123,280) (5,123,280)
----------- ----------
Net Operating Income 33,382,059 19,867,345
Net Financial Items (1,356,841) (1,331,521)
----------- ----------
Net Profit 32,025,218 18,535,824
----------- -----------
Basic and Diluted
Earnings per Share 3.30 1.91
Average Number of
Outstanding Shares 9,706,606 9,706,606
The accompanying notes are an integral part of the condensed financial
statements
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
All figures in USD
Nine Months Ended
September 30,
2004 2003
---------- ----------
Net Profit 32,025,218 18,535,824
Reconciliation of Net Profit
to Net Cash from
Operating Activities
Depreciation 5,123,280 5,123,280
Amortization of Prepaid
Finance Costs (60,525) 10,860
Decrease in Receivables
and Payables (880,434) 2,826,632
------------ -----------
Net cash from Operating
Activitites 36,207,539 26,496,596
----------- -----------
Financing Activities
Dividends Paid (36,205,927) (26,013,874)
----------- -----------
Net Cash From Financing
Activities (36,205,927) (26,013,874)
----------- -----------
Net Increase in Cash and Cash
Equivalents 1,612 482,722
----------- -----------
Beginning Cash and Cash
Equivalents 565,924 277,783
----------- -----------
Ending Cash and Cash
Equivalents 567,536 760,505
----------- -----------
Cash Paid for Interest 1,331,465 1,519,740
----------- -----------
The accompanying notes are an integral part of the condensed financial
statements
NORDIC AMERICAN TANKER SHIPPING LIMITED
Notes to the Interim Financial Statements
1. INTERIM FINANCIAL DATA
The unaudited condensed interim financial statements for Nordic
American Tanker Shipping Ltd. (the "Company") have been prepared on the same
basis as the Company's audited financial statements and, in the opinion of
management, include all material adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of the financial position and
results of operations in according with U.S. generally accepted accounting
principles. The accompanying financial statements should be read in conjunction
with the annual financial statements and notes included in the Annual Report on
Form 20-F for the year ended December 31, 2003.
2. RELATED PARTY TRANSACTIONS
The Company entered into a management agreement with Scandic American
Shipping Ltd. ("SAS") on June 30, 2004 under which SAS will provide certain
administrative, management and advisory services to the Company for a fee of
$100,000 per year plus costs. SAS is the commercial manager of the Company and
is owned by Herbjorn Hansson and Andreas Ove Ugland. SAS owns as of September
30, 2004 indirectly through its owners 0.15% of the Company's shares. Herbjorn
Hansson is the Chairman & CEO of the Company. Andreas Ove Ugland is a board
member of the Company.
3. LONG-TERM DEBT
On September 29, 2004, the Company obtained an extension of the
maturity of its $30 million loan from October 2004 to October 2007. Interest on
the loan, as extended, was at a rate equal to LIBOR plus a margin of 0.70%.
In October 2004 the Company entered into the Credit Facility, which
consists of a $50 million revolving credit facility and a $250 million revolving
credit facility. The $50 million facility will mature in October 2007 and the
$250 million facility will mature in October 2005, unless the Company exercises
the one-year extension option or the option to convert any drawn amounts to a
five-year term loan. Amounts borrowed under the Credit Facility will bear
interest at a rate equal to LIBOR plus a margin between 0.80% to 1.20% per year.
On November 8, 2004, the Company repaid its $30 million loan with
proceeds from the Credit Facility.
4. SHAREHOLDERS EQUITY
Par value of the Company's common shares is $0.01. At September 30,
2004 and December 31, 2003 the number of shares issued and outstanding was
9,706,606.
Nine Months Ended
September 30, 2004
------------------
Shareholders' equity at beginning of period 105,707,976
Net profit 32,025,218
Dividend declared and paid (36,205,927)
Cash flow hedge 919,000
-----------------------------------------------------------------------
Shareholders' equity at end of period 102,446,267
-----------------------------------------------------------------------
5. COMPREHENSIVE INCOME
Nine Months Ended
September 30,
2004 2003
---------- ----------
Net Profit 32,025,218 18,535,824
Cash flow hedge:
-Unrealized gain (loss) on cash flow
hedge instrument 2,806 (354,151)
-Reclassification adjustment 916,194 918,151
---------------------------------------------------------------
Comprehensive income 32,944,218 19,099,824
---------------------------------------------------------------
6. SUBSEQUENT EVENTS
In October 2004 the Company entered into an agreement to acquire an
additional Suezmax vessel for a purchase price of $66 million. The Company
expects to take delivery of the new vessel in late November 2004. After a short
bareboat charter to the present owner, the Company plans to deploy the vessel in
the spotmarket over the near term, commencing in February 2005.
The Company's management agreement formerly provided that SAS would
receive 1.25% of any gross charterhire paid to the Company. In order to further
align the Manager's interests with those of the Company, the Manager agreed to
amend the management agreement to eliminate this payment, and on October 28,
2004 the Company issued to the Manager 194,132 restricted common shares equal to
2% of its outstanding common shares at aggregate par value of $1,941. At any
time additional common shares are issued, the Manager will be able to purchase
additional restricted common shares at par value, $0.01, to maintain the number
of common shares issued to the Manager at 2% of the Company's total outstanding
common shares. These restricted shares are non-transferable for three years from
issuance.
Contacts:
Scandic American Shipping Ltd.
Manager for
Nordic American Tanker Shipping Ltd.
P.O Box 56
3201 Sandefjord, Norway
E-mail: info@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: November 15, 2004 By:/s/ Herbjorn Hansson
----------------------------
Herbjorn Hansson
President and
Chief Executive Officer
01318.0008 #525663