Nordic Tankers Gloomy Results Reflect Weakness in Tanker Sector

Nordic Tankers reported results for the first three quarters of 2010 today. Here are highlights:

In the first three quarters of 2010 Nordic Tankers realised a result before adjustments and tax of USD
-13.7 million and a result after adjustments but before tax of USD -22.2 million. Time charter equivalent (TCE) revenue generated as of 30 September 2010 was USD 50.6 million.

The result, which is negatively influenced by the continued weak freight markets and the effect of a weaker USD in the third quarter, reflects management’s expectations, and expectations for the full year 2010 of a loss before adjustments and tax of between USD 20 and 25 million remain unchanged.

In connection with the preparation of the interim report Nordic Tankers has performed impairment tests and found that the chemical tanker segment is impaired by USD 6.2 million which has consequently been written down on goodwill. The fair value of the deferred contingent payment for the Clipper organisation has also been reviewed and a positive adjustment of USD 5.9 million has been made in the third quarter. The net effect of these two adjustments is USD -0.3 million, as further explained in note 2 of this report.

EBITDA for the first three quarters of 2010 was USD 2.8 million and expectations for EBITDA for the full year 2010 are adjusted from previously USD 4-8 million to USD 3-6 million in light of the continued historically low freight rates, while the expected result before tax and effect of currency exchange rates, of a loss between USD 28 and 33 million is kept unchanged.
As of 30 September 2010 the company’s cash and cash equivalents were USD 20.7 million.

Highlights from the period
Nordic Tankers continues to pursue the Nordic Ambition strategy and management expects the company to be well positioned for the expected improvement in market conditions.

The joint marketing agreement with WOMAR Holdings LLC has had a positive start and the improved opportunities for trading Nordic Tankers’ vessels east of Suez should over time supplement Nordic Tankers’ primary markets.

During the third quarter Nordic Tankers has transferred a further 4 vessels to Danish flag, bringing the total number of ships under Danish flag to 10, equal to 2/3 of the owned fleet.

Despite the difficult market conditions Nordic Tankers has secured new cargo contracts (CoA's) which are complementary to the existing portfolio of contracts and have thereby increased the overall coverage in line with the strategy.

Visit www.nordictankers.dk to read the full results.