Revenue surge delivers NAT another profit as third-quarter bookings signal more to come

Nordic American Tankers (NAT) reported another profitable quarter and revealed third-quarter bookings that pointed to continuing strong numbers.

The Herbjorn Hanssen-led suezmax tanker specialist reported a quarterly profit of $26.8m, a dip from the first quarter’s $46.9m in net income that still reverses the $3.95m loss logged in the second quarter of last year.

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The profit was driven by net voyage revenue of $67.9m, which nearly doubled the $34.8m earned in the second quarter of 2022.

The results, whose earnings per share of $0.13 was in line with average analyst forecasts, allowed Nordic American to lift its quarterly dividend by three cents to $0.13 per share.

New York-listed NAT’s time-charter equivalent (TCE) earnings surged to $43,200 per day per ship, up from $39,200 per day in the same period of 2022.

“This is a solid rate from an historical perspective but is below peer averages,” said Jefferies analyst Omar Nokta.

Looking to the third quarter, bookings are pointing to a “historically strong” period, Nordic American said.

So far in the ongoing third quarter, NAT has seen $34,800 per day in TCE earnings, with 57% of fleet days booked. In the full third quarter of 2022, NAT reported a TCE rate of $27,850 per day per ship.

“Oil demand continues to be strong, but higher interest rates combined with higher oil prices have not stimulated the building of oil inventories and leave a limited buffer ahead of the winter,” the company said.

“Add to this war, political uncertainty, a fragmented trade picture with logistical inefficiencies and a tight supply of ships, and we see interesting dynamics ahead for the NAT oil tankers. Seasonal variations will occur, but as we have seen so far this year, the trend supports future earnings at higher levels than in the past.”

The other side of the supply-demand equation also fuels optimism for NAT.

The supply of suezmax tankers is expected to remain at historic low levels, the company said.

“The fleet growth for the coming three years is set to be very muted, potentially negative, next year,” the Norway-based company said. “The available shipyard capacity has to a large extent been booked by container, gas and dry-bulk ships, leaving very limited capacity to build additional suezmax tankers with quality yards on this side of 2026.”

NAT’s second-quarter results lifted first-half profits to $73.7m, reversing $30.9m in losses in the same period of 2022.