Nordic American Tankers (NAT) - 2024 Q4 - Annual Report

Revenue and Income - Voyage Revenues decreased by $42.0 million, or 10.7%, from $391.7 million in 2023 to $349.7 million in 2024 due to decreased tanker rates[346] - Net Operating Income fell by $50.6 million, or 39.5%, from $127.9 million in 2023 to $77.3 million in 2024[343] - Net Income decreased by $52.1 million, or 52.8%, from $98.7 million in 2023 to $46.6 million in 2024[343] - Net Voyage Revenue declined by $37.1 million, or 14.1%, from $262.2 million in 2023 to $225.1 million in 2024[350] Expenses - TCE Rate per day decreased by $8,919, or 22.0%, from $40,522 in 2023 to $31,603 in 2024[349] - General and Administrative Expenses increased by $5.9 million, or 25.9%, from $22.9 million in 2023 to $28.8 million in 2024, primarily due to higher employee compensation costs[353] - Vessel Operating Expenses rose by $2.8 million, or 4.7%, from $60.0 million in 2023 to $62.8 million in 2024, reflecting an increase in vessel calendar days[352] - Interest Income decreased by $0.6 million, or 43.9%, from $1.3 million in 2023 to $0.7 million in 2024[356] - Depreciation Expenses increased by $4.8 million, or 9.2%, from $51.4 million in 2023 to $56.2 million in 2024 due to the addition of one vessel[355] - Voyage Expenses decreased by $4.9 million, or 3.8%, from $129.5 million in 2023 to $124.6 million in 2024, mainly due to lower port charges[351] Cash Flow and Liquidity - The company has maintained a cash balance of $39.2 million as of December 31, 2024, compared to $31.1 million as of December 31, 2023[400] - Net cash provided by operating activities decreased to $128.2 million in 2024 from $139.4 million in 2023, primarily due to decreases in market rates[413] - Cash flows used in investing activities decreased to $2.62 million in 2024, compared to $73.7 million in 2023, due to no additions to the fleet in 2024[414] - Cash flows used in financing activities increased to ($115.1) million in 2024, compared to ($95.7) million in 2023, as there were no new borrowings in 2024[415] - Cash, cash equivalents, and restricted cash at the end of 2024 totaled $44.4 million, including $5.2 million in restricted cash[416] - The company has a minimum liquidity covenant of $20.0 million, which it was in compliance with as of December 31, 2024[401] Debt and Obligations - As of December 31, 2024, the outstanding balance under the 2019 Senior Secured Credit Facility was $72.6 million, down from $84.6 million in 2023[385] - The company has obligations to purchase two 2018-built vessels for $24 million each upon completion of their ten-year bareboat charter agreements[390] - The financing agreements for the 2022-built vessels require a purchase obligation of $16.5 million for each vessel upon completion of their ten-year bareboat charter agreements[391] - Total contractual obligations as of December 31, 2024, amount to $348.6 million, with the majority related to the 2019 Senior Secured Credit Facility[408] Market Conditions and Risks - The oil tanker industry remains cyclical, with volatility in charter hire rates and vessel values impacting financial performance[422] - The company is exposed to market risk from changes in interest rates and foreign exchange fluctuations affecting operating expenses and capital expenditures[548] - Events such as declines in market charter rates and changes in charterer behaviors could impact future cash flow assumptions[437] Asset Valuation - The carrying value of the vessels as of December 31, 2024, is $715 million, while the fair market value is estimated at $1,068 million[435] - The fleet of Suezmax vessels has seen a positive valuation trend, with values in 2023 surpassing those from 2022 and 2021, driven by rising steel prices and strengthening freight rates[432] - A residual value of $8.0 million has been applied for depreciation purposes in the financial year ended December 31, 2024[430] - The estimated daily time charter equivalent rates are based on broker estimates for the first two years and a 15-year historical average for subsequent years[429] Other Financial Metrics - The company has distributed dividends for 110 consecutive quarters, reflecting earnings while considering capital commitments[376] - The company has entered into a new $60 million ATM program as part of its equity distribution strategy, effective March 31, 2025[399] - A 100 basis point increase in term SOFR or the Federal Funds Rate would have resulted in an increase of approximately $2.6 million in interest expense for the year ended December 31, 2024[550] - A $1,000 per day per vessel decrease in the spot market rate is estimated to decrease voyage revenue by approximately $7.1 million during 2024[552] - The majority of the vessels are operated in the spot market, with three vessels on longer-term time charter agreements, which historically generate premium earnings[551] - The quality of the fleet is evidenced by CAP1 notation for Hull and Machinery & Cargo, indicating high standards of maintenance and safety[433] - The estimated cash outflows for dry-docking are based on historical and forecasted expenditure, with vessel utilization based on historical average levels[430]