Ladies and gentlemen, thank you for standing by, and welcome to the Nordic American Tankers Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. For your information, the conference is being recorded. Now I would like to hand the conference over to your speaker today, Mr.
Herr Bjor Hansen, Chairman and CEO. Please go ahead, sir.
Thank you, Mr. Operator, and thank you all our listeners and people joining us. We are very pleased to be together with you. And I would like to just mention that my remarks here, they are forward looking, some of them, about the future performance. These statements are based on our assumptions in light of the information currently available.
And therefore, you should not place undue reliance on them. In these legal comments, I tell you that Nordic American Tankers cautions you that a number of important factors could cause actual results to differ materially from those discussed in the forward looking statements. For additional information as to risks and uncertainties, as well as other factors that could cause actual results to differ, please refer to the press release we have sent you, which can be accessed by visiting the company's website. And I'm addressing you from Norway. We are a company listed on the New York Stock Exchange, 1 of the largest shipping companies in crude oil tankers in the world.
Our ships are traveling all around the world carrying crude oil. And I would like to tell you that we had 1 of the highest liquidity in the stock among all listed shipping companies, stock listed. And I noted that compared with another well known shipping company, we have doubled the amount of shares being bought and sold every day, because everybody who buy stock with us, they should easily be able to buy stock and they shall be able to sell stock. We have a very strong cash position I would mention and we have performed better than the so called consensus. Our results were out 17th August last Monday, I believe.
And today we had the 26. And when it comes to our earnings per share, we were beating the consensus by about 17%. When it comes to net income, we were beating the consensus by 16%. EBITDA, we were beating the consensus by 10% and EBIT by 7.3%. The point I wish to emphasize is all these parameters were beaten by the performance of Nordic American Tankers.
And we are now in a very strong position. I've been in this business for quite a few years since the mid-1970s, both in research, in economics and in the energy business. And I've never seen this company as to be in as such a good position as it is today. I'm sitting here in Sandefjord, Norway together with some of my friends and we have also many friends all around the world that are listening in and that they hope will participate in the discussions we are going to have. With these few words, I would like to go on to the first item on the agenda.
Item number 1, the strong financial and commercial position on that. And in that connection, I will address the strategy going forward. When it comes to the strong financial and commercial position of NAT, I will say without reservation that we are in an excellent shape. That is how I see it from my point of view. Nobody knows, as he indicated in my previous remarks, what the future is holding, but I'm very confident on the way forward.
There is no question on that. And when it comes to our strategy, I just would like to say the following remarks. We have we place emphasis on simplicity, transparency and predictability. Our general position is to under promise and to over perform. And I would like to address a few elements of our strategy.
That is point number 1, expansion of a homogeneous fleet. We stick to Suezmax vessels and which we are trading all over the world, carrying crude oil. Secondly, we distribute cash flow to shareholders to a large extent, and we place heavy emphasis on dividend. We have been paying dividend for 92 quarters and we are going to continue on that path as well as we can. Naturally, the dividend will be it is a risk management question really on the 1 side and it has to do with the capital structure of the company.
We have a very strong balance sheet, which is good going forward. And we have also a very close customer relationship, very close. We do business with Big Oil. I shall come back to that. We maintain a top quality fleet as reflected in the so called vetting activities.
We have interest aligned shareholders, management and all interests are aligned. We are servicing big oil and short term contract and longer contracts. We are dealing with some of the best companies in the world on the oil side. We have a low cash breakeven, including G and A costs, and we leverage our industry network. Some of us were working in and doing business in Japan many, many, many years ago, contracting ships, ordering ships, after which we moved to a large extent to Korea.
And now, as we all know, China has become an aggressive and positive competitor in our business. That is really my comment on item number 1 on the agenda, when it which is our strong financial and commercial position and our strategy going forward. Let me embark on number 2 on the agenda. Nordic American Tankers, we expect to be a debt free company in a few years as in the past. Then we were a debt free company 10 to 15 years ago, simply all the debt was very, very low, because when you have no debt, the shareholders and management and the Board can run the company without any interference by the banks.
We wish to be completely independent of the banks. And that has been and was very important objective for us and it will be an objective and it is still an objective. Whether it will take 3 years or 5 years, I wouldn't comment on that or even more. But the direction is very clear. The direction is to become debt free simply because we are of the firm opinion that this benefit our shareholders, who are our owners.
So then I will embark on the 3rd point on the agenda, which is our customer relationship with Big Oil. Big Oil, by that expression, I'm talking about some of the biggest companies in the world. I'm talking about ExxonMobil. I'm talking about Shell, about British Petroleum. I'm talking about the major Chinese oil companies, China Oil and others.
And we do a lot of business with them all over the world. BP, Shell, Exxon, Sebsa, Equinor, not least, Equinor is the state owned company in Norway, 1 of the biggest companies in the international shipping site. And they are located in Stavanger and own 67% by the Norwegian government. We do business with Chevron, our good friend. And generally speaking, we also do business with Unitech in China.
Generally speaking, our desire is to do business with big oil, because we have experienced over the years that the oil companies are some of the best companies in the world. They started out many, many, many years ago in America, and I think it was in Pennsylvania in 18/63, so quite a time ago. But we had the best relationship and the best cooperation with Big Oil, and that is our objective to continue on that path. They rely on us and we rely on them. And we for which reason, we are working closely together with them.
And then I will go on to the question of sorry, on our fleet composition, item number 4, fleet composition, quality of fleet, vetting. The question of vetting, vetting is the same as the mark book you get in school. The oil companies are looking at our fleet. They're going through in detail our fleet and give them a rating. And we are among the top rated companies, shipping and oil crude oil companies in the world.
Our vetting performance is 2 and a little bit more, 2, 2.5 observations each vetting. And these vetting procedures, they are to a large extent, generally speaking, from an industry point of view, supported by OKIMS, the oil companies International Marine Forum, consisting of about 112 oil companies located in London. And we have a very close and constructive cooperation with Aukit. When we talk about our business with Big Oil, we are a completely transparent company. We are listed in New York and our annual report or we call it F20, I believe, are about 120 pages, 120 pages.
So everything is completely well known by our friendly competitors and also by our customers and by our friends in the industry. We have nothing to hide. When it comes to number 4, fleet composition, which is associated with the vetting, we have now 23 ships and the quality is reflected by the vetting results, as I mentioned. And we have about an average age of about 12 years or slightly less or in that region. And we had until recently, 2 years ago, 1 year ago, 33 ships and then we scaled the fleet back a little bit.
So now we are down to 23 ships and I wouldn't be surprised if we would increase the fleet again, because this is a dynamic development. And that's from our perspective and also for me as a quite a large shareholder, I have invested quite a lot in this company, hard cash. And we wish, of course, to renew our fleet in due course. And that will be a gradual process. And we don't announce today that we will order a ship tomorrow.
And we don't tell people what our next steps are. But whatever we do, dividend will be in focus. And whatever we do, we will do it in the best interest of shareholders. No question. And the shareholders can rely on that.
And in business, you not always succeed, but more than 50% of your decisions must be right. Because if you do things wrongly, more than 50% of the time, it will be very bad in the longer term. And so far so good. And we wish to keep up the quality of the fleet. It's a very accurate position we are working on.
And I personally supervise these things in great detail, because I believe as the top leader of this organization, it is my responsibility to have a lot of detailed knowledge about the business. I don't take decisions on behalf of others, but I wish to ensure that they understand all questions associated with the business. I would like to go on to item number 5, the question of scrubbers. You know, some time ago, this question was introduced in a few years ago, and we saw immediately that this was nothing for us. And we decided clearly and openly, and I would say convincingly that scrubbers was nothing for us because we are there to reduce risk.
We are not there to increase risk. So I don't need to talk more about that. Let me embark on the next question, which is perhaps the most important question we see today that is COVID-nineteen. And I have with my colleagues been to China many, many times doing a lot of business with the big Chinese oil companies. And we are following very closely developments in China on this business COVID-nineteen and also in Korea and Japan, as I mentioned to you.
And we I would like to make a general comment. Political uncertainty is often creating could create good times for the business. And we see very clearly, there is no doubt about it, that crude oil is required to stimulate growth and to stimulate welfare. Many people in the world, poor people, they like to have welfare as some of us in the West have in America and elsewhere. They will not continue to be poor people.
And those of us who have followed the Far East over, I would say, the last 40 years, we have seen this question of increased welfare at a very close distance. I shall not give you a long speech on that question. I could do it, but this is not the right place to do it. But we are following the COVID-nineteen question very closely. And our main challenge at this time is to ensure that our crews, our crew, the working people on the ship on a typical Suezmax ship, we had about 23 crews, 24.
And we are very concerned for their safety. And we try to change crew according to schedule. We and that is a challenging situation now, because this has to do with the virus and the extent to which the virus is spreading. But we are trying to the best of our ability to protect the crew. I would say, this is the most important thing that we have on the agenda every day.
And I personally take a very active role in these processes because of an important managerial principle. I'm no good at blaming others. If something goes wrong, it is my responsibility together with my colleagues. And if somebody is going to shout, they shall shout at me and my Board and my colleagues. We are not blaming others.
Let me also before we go on to Q and A, let me talk a little bit about the USA. And China relationship. You have the big triangle, if you wish, that's China, that is America, that's Russia. You are familiar with many of you with the mountain chain of Urhall, as we say in my language, Urhall. East of Urhall, there are about 30, 000, 000 to 40, 000, 000 to 50, 000, 000 Russians.
But even further east, there are 1 point 3, 000, 000, 000 Chinese. And I'm sure that many of you on this call, you know a lot about China. And I don't know very much about China, although I have been there many times. And we have an excellent relationship with our business associates in China. And interestingly, China, the last if you look upon this in a historic perspective, China has been ruling in quotation the world for the last 2000 years.
It is only the last 200 years that China has not been in the driving seat if you wish. So in a large historical context, this is a short period of time. We some people are saying that you know that China and the United States are at the point where they are adversaries, adversaries working against each other. And I will not take the side of China. I will not take the side of America, but I'm quite sure about 1 thing that the 2 countries respect each other.
And I firmly believe that with all due respect for our contacts in Moscow and in Russia, I think that China and America, they are running this show. There's no doubt about it that we wish America to keep a leading role in the world. We wish to do that. We wish America to take that role. And it is also in the American heart to have the role that they feel that this is a little bit expensive for them now.
But our links, Nordic American, you can see it from the name. Nordic American had very strong links in America. On the agenda here, we mentioned a debt free company and we are now have only 1 big creditor that is in Dallas, Texas. And we don't have any mortgage debt with Scandinavian banks, only America. And we are dealing with the New York Stock Exchange and we are dealing with all new rules, and we have performed correctly in all these years that we have been in your country.
And I think that what we now see, these tensions between USA. And China, they may come down more quickly than we anticipate. In the tanker business, political events are many, many times turning matters upside down, and we may see this again. So the operator, with these few words, I don't wish to talk more, but I would like to respond to any question you may have about an industry in which I've been all my life and which I will be hanging in for a long time, I can assure you. And I have done a few right things and I'm hopeful that I shall be able to together with my Board and my colleagues in management to continue that constructive path that we have been on and that we are on at this time.
I mentioned in my speech here the high liquidity of the stock. I compared our liquidity in the stock, which is about 6, 700, 000 shares being traded every day. And we are more than 6, 700, 000 and we are more than double of other well known shipping companies. So with us, people can buy stock, they can sell stock. If they like what they see, they can buy.
And if they don't like it, they can sell. And if they have other reasons for adjusting their portfolio. So with these few words, I call it I refer back to Andrea, our friend from Italy, who will or Ruth, I forget who is in charge here. And I will manage the Q and A session. Andrea, please?
Thank you. Ladies and gentlemen, we now begin the question and answer session. We are now taking our first question from the line of Randy Giveans. Please ask your question.
Howdy, Herb, Johan. Great to hear from you. How
are you? No, I'm doing excellently. Goes better and better every day. And how are you doing? Are you in Houston or in New York?
Yes, yes. Staying away from Marco and Laura. So yes, we are staying safe down in Houston.
That's good.
Yes, sir. All right, questions. First, you mentioned you paid a dividend for, I think it's 92 consecutive quarters. Yes. Quite the street there.
So looking at the dividend, you paid a $0.10 dividend in the 1st quarter, dollars 0.20 dividend in the 2nd quarter. So I guess around that, what is the calculation for this? Or how did you decide on those dividend amounts? And then also, we expect NIT to have negative, right, net income in the Q3. So what is your minimum dividend payment going forward?
I started my business in Houston, I can tell you. So I could comment with you and make a speech of 1 hour to address the questions you are mentioning.
Come on down. Come on down.
In the first quarter, sir, we paid $0.14 And in the second quarter, we paid $0.20
We are
paying now. Those who buy stock now, they will get 0 point 20 next the 4th September. And you have started calculating our resend for the Q3. And I would courageously ask you how many Suezmaxes do you have. Otherwise you could comment and see that what you are referring to is not what we are seeing.
We think that 2020 will be a good year for the tanker business and for Nordic American Shipping. That is point number 1. Point number 2, 20 21 will be a good year for the handker business. And the reason I'm seeing that is you can also if you study the details, you will see there is a high degree of volatility And a high degree of volatility does indicate a balanced market, a balanced market. And I think this is going very, very well.
But of course, we are not talking about the market next week. I mean, we don't go by week by week. We are talking about the direction of the company and the company can essentially go 3 ways. That's up, that is sideways and that's down. And this company is going up.
And those who believe that they are going down, they can take the phone and a question and give their rationale. What we know about, we know about the energy business and we know about our business. That is what we know about. And within the limit of time, I cannot spend too long time on each question. But we are very confident.
And then anybody could argue, are we wrong? And that is essentially what I said earlier during this conversation. If we take more wrong decisions than right decisions, Then we go into the big black hole, but we have over many, many, many years taken the right decisions. And we saw it on scrubbers. It was a catastrophe for many people who went for that thing.
We saw it immediately. This was nothing for us. And this is the question of being a businessman, which is very difficult to be a businessman. And you must think about this and this and this and this. And it is a very mortally, they call it in America, I believe, M0TLEY picture.
And you have so many dimensions to have in your analysis that it is impossible to predict the future, because if the future was very easy to predict, everybody would have been doing that. And that is really our job is to undertake a professional judgment of the situation as we say it with simplicity, with transparency and with predictability. I'm sorry, I shouldn't go so far. But essentially, you were wrong on the dividend numbers and what the future dividend will be. This is a risk management question.
A risk management question that has to take balance sheet considerations. We include views on the market. We include all these elements of international politics. I'm sorry, this was a long answer to your specific questions. And please comment further if you have any other views.
Yes, please.
All right. So that was very robust of an answer. I appreciate the color there. And I can understand, okay, the minimum dividend payment, that's in flux, maybe there's some nuances around it. But I guess, can you just explain the calculation
office, I shall give you a speech in economics and we can spend 1 hour together about that, because this is a very complicated business. And it is a risk as I said, it is a risk management question. You cannot easily say this or that and this number and this percentage. That's not how business works. But I will more than willingly talk about it, because it is intellectually an interesting question, but it goes far beyond the scope of this conversation.
Once COVID ends, I'll be knocking on your door. Next question. Looking at your debt, you finished the 2nd quarter with $300, 000, 000 in total debt.
No, no, you're wrong. You are wrong. We have the net debt of our fleet is $11, 000, 000 per share per share, dollars 11, 000, 000 We are Gross. What's that?
The gross amount of your total debt. Yes.
What you mentioned, it's a question of the Ocean Yield also, whether you include that. We have 1 creditor. We have 1 creditor in America. 1 of the biggest banks in America owned by 1 person. And the average debt of our fleet is $11, 000, 000 Could you, Bjorn, could you, Bjorn, make a comment on the debt side?
I think, Brendon
The CFO will make a future comment. But I can assure you, we will be debt free. And we shall not ask you, Andy, to borrow money from you.
Got it. Okay. Mr. CFO, please.
Hi, Randy. I think you're right about your total debt number. Yes, what was the question?
Okay, go ahead. $11, 000, 000 is that correct, Bjorn?
Yes, that's the net debt.
Yes. Net debt, not yet.
Yes, that's the net debt of $11, 000, 000
dollars If you try to elude that we have a lot of debt, you are drawn.
Got it. I agree with you. I'm trying to if you let me finish here. You do not have a lot of debt. Absolutely not, right?
You're under levered compared to your book value, compared to even the market value of the vessels. So with that, with the low leverage, are you thinking about or able to refinance your expensive debt with Beobank and Ocean Yield with new bank loans, right, at LIBOR plus, I don't know, dollars 300, 000, 000, right?
I said earlier, we are finished with Scandinavian banks. The answer is no. I expect to be debt free in is it 3 years, 4 years, 5 years, you could always argue about the timing. But when we are debt free, we are debt free. And we have been there before and we should come there again.
That's how I see it.
Awesome. And I'll ask 1 more quick question. With hoping it doesn't go 10 minutes. But your during the Q2, you raised $15, 000, 000 through the ATM. You issued 2, 460, 000 shares at $6.22 a share, obviously, a great deal with your share price now at 4.50 dollars So what are your plans for this cash and why not sell more shares with your share price trading well above NAV?
Let me put it like this. We always are trading above NAV. NAV is not of a big interest to our customers. ExxonMobil, they don't say, well, we like that ship because that ship has a low NAV and that ship has a high NAV. That is not how business is working.
And we are not scrap dealers. We are not scrap dealers. We have now close to 1 dollars a year in dividend or slightly less. And the price is stock price is about $4.5 or something. And those who believe, as I believe, that we are on a very good path forward, they should buy stock and those who don't like it, they should sell stock.
That's how it is really. And that is how we wish to be. And in the 5 years' time, and I expect to be here in 5 years' time, I can tell you, if my health is as good as it is now. And then when we are debt free, if we are at 5 year in 5 year, then you and I can meet Randy and then they can buy you a beer. Okay.
And then And then, okay, I would suggest that we go on to another question, if there is somebody else.
I'm going to pass it on to someone else and give them a shot. But hopefully
That's good. That's very kind of you.
All right. Have a good 1, sir.
Thank you.
Thank you. We are now taking our next question from the line of Omer Mokhta. Please ask your question.
Hi, thank you. Hi, Herb Jorn. Thanks for the update and overview on things. And Randy, I hope you're wearing a mouth guard. Anyway, Herb, you were quite, I think, quite clear in your plans on becoming a debt free company here just like you were in the past.
And that seems really achievable over the next 3 to 4 years if you just simply use an average somewhere in the mid-20s on the Suezmaxes. Once you're debt free, you can run an 18 now without interference from the banks. How do you view being debt free in the context of the first item in your strategy, which is the expansion of a homogeneous fleet? How do you see those 2 interplaying?
Well, Valensard. Yes, yes. We are making good money in the marketplace. And what we forget in this discussion very often is that we are making good money in the marketplace as we had done this first half year. We did excellently based upon a clear strategy.
We fixed as many ships as we could, as high as we could. And we and that was very, very successful. And we will be and work towards becoming debt free. We have an operating costs of about $8, 000 a day and that is a number that we decide ourselves because we decide the quality. And of course, if we can pick up 30, 000 in the marketplace, as we have done recently.
There has been a little now, but if you can manage 30, 000, a lot of cash is coming into the company. And we do have a lot of cash at this time. And we wish to responding to the earlier question, we wish to use that cash to give to our shareholders, including myself, if he can manage that it is a very sensitive objective to do this and we must think about how we do it and in which way When it comes to growth renewal, I expect that we will, of course, renew our fleet. We have now, as we speak today, more than $100, 000, 000 in the bank. And of course, there's a lot of money and can be used for a lot of things.
But we are very, very careful not to overextend ourselves because we are conservative people and that is at the bottom of our thinking and at the center of our thinking. We are very, very conservative. Ship owners all over the world in my whole career, in my experience, they have been far too speculative, far too speculative. But other people may wish to have that approach. I don't blame them, because other people, they should run their business as they wish.
But there is 1 thing that you should count on here when also renewing the fleet. That is we will be conservative. We will be conservative. I can tell you almost every day, but several times a week, people are knocking at our door, asking us to buy ships from them. They are doing that.
But we sit back and that is an advantage of sitting in a small town outside Oslo and nobody sees what we are doing. They know it after we have done it. And I'm sorry, Umer, I went astray here with my comments. Couldn't you come back to your comments, please?
Yes. No, that was helpful. That was helpful and a good overview. I think you did touch on the main question. And I think as you think about the fleet renewal, Herb Yaron, you sit on several industry boards and clearly the key discussion I think going forward is also propulsion.
And a year ago, there
were a lot of questions and uncertainty, though it seemed that maybe LNG was gaining some traction. But here we
are a year later and
now there's more talk and uncertainty, but there's ammonia, there's hydrogen in the equation. Any thoughts on that? And also maybe could you give a perspective on how NAT is preparing for some of the upcoming changes to the industry?
Let me take 1 point, which always has been at the core of our thinking. We are not waving the big technological flag. We don't go first because that's not our inclination and not our thinking. Always, we like others to go first. And that is a very cynical approach.
We simply would like others to do the mistakes. And when they have done the mistakes, we learn from their mistakes. I mean, it's much better to learn from the mistakes of others than your own mistakes, at least if you repeat them all the time. So we I don't see that LNG, you know, is anything for us at this time. But if I mean, our engines on our ships can burn low sulfur diesel oil and low, what you call it, check.
Compliant fuel. Yes, we have compliant fuel. But my short question is, we don't wave the technological flag, but we must be very, very quality orientated. That is important for us. But if people would like us to install all kinds of things and I say, well, it's fine.
If you will pay for it, we will over a certain period of time, we will install it if you pay for it, but we don't install it if you don't pay for So it is that is our basic principle. But we have a good standing with our big customers. And perhaps the 1 thing which is most important, they rely on us. They rely on us. What do we have in this company?
We have 3 things that is ships and I explained about the vetting. Secondly, we have the people and the staff on board and among our colleagues. And I happen to believe we have the best people out there. And thirdly, not least, we have the capital. We have the capital because in America and I don't know America better than many of you, but they know 1 thing from America for almost decades, If you have a good standing and if you had a good idea, you always find the money.
We have 60, 000 to 70, 000 shareholders and that is perhaps our main assets. And if I ask shareholders, we do it like this. They often follow my advice and the advice of this board that is really how we approach it. And because I said to a Norwegian banker at 1 time, quite a big Norwegian bank, and I said, we are dealing with the biggest bank in the world. And he said, oh, is there anybody who's bigger than us?
Yes, I said, the American capital market is bigger than any bank. And my experience is that they will always support us provided we act diligently and openly and with integrity. I must admit on this call that I'm a great fan of America with all the weaknesses in America, but I'm a fan. I started our business and personally in Houston, Texas as I mentioned. Sorry, Umer, did I respond?
You did. Very good and helpful. So I appreciate that. And clearly, building a cash position and getting to debt free hopefully in the next few years does allow you to make watch others make mistakes and then before you choose the right system.
We've learned from all those mistakes. Yes, please.
Yes. Thanks, everyone.
Anybody else who would like to have a conversation and a question? Now you must be critical. Now it's up to you guys to take action and not say afterwards, oh, he was a stupid man. You should take it up now, stand up and say, I can discuss anything associated with the tanker business. Andrea?
Yes, we are now taking our next question from the line of John Chappell. Please ask your question.
John Chappell, I've known since April March 2005. Okay.
And if there's anyone need to be critical, it's going to be me. So perfect timing.
Oh, that's good. Yes. No excuse. You have been wrong so long time that maybe you will continue on that part. Thank you, John.
It's so fun. Anyway, so in your Q1 earnings release, you gave us the 2nd quarter to date rates and yet that wasn't in your Q2 earnings release. So can you please just give us the quarter to date rates for the Q3?
I As we stand now, and I don't issue guarantees, but we are probably in the region of $30, 000 or between I would say to be more modest between $25, 000, 000 $30, 000 $25, 000, 000 to $30, 000 Okay. But we are doing fine and our strategy in fixing maximum has been a very good strategy.
So I don't own any ships. So I don't I can't say with certainty, but most of the ship brokers You
can go there and see. I can spend an hour with you as well. Okay.
Well, I don't think I'd learn by being there. But anyway, so have you done a bunch of short term charters? Do you have any ships that were on floating storage contracts that enabled you to get to 30, 000 a day when the market's been in the teens?
Yes. The answer is yes. We have done that. And now there is a little lull in the market now. And they are asking us to we have a few ships sitting at storage, not very many, a few.
And people are telling me that the market is down. And then they say that's why. But I would say, Sai, a good friend of mine, he always said, what is down comes up and what is up comes down. When market is down, many people are afraid that it will not increase. And conversely, when the market is at, they are concerned that will fall.
But I mentioned earlier, when there is high volatility, that is an indication of a balanced market of a balanced market. I can see 1 quote unquote danger, if for whatever reason they should close China and close the Far East, because the Far East is the growth center of the world. There is no question on that. The Far East, these countries are running the world and we wrongly believe we are running the world. But I believe that the cooperation between the East and the West is much better than we see.
But I you know, to predict the future is not easy. And if it had been easy, a lot of other people would have done it. But we have such strong links with America that I'm very, very pleased with our cooperation with America. We even have the American flag in our logo. But if your customers buy stock in NAT, you're not on.
They can sleep well and say hello to them from me.
I will. I just have 1 follow-up question, which ties together something from Randy and something from Omar. If we think about the cash that you've generated and uses of cash, you can either pay down debt, you can either buy ships or you can either pay dividends. But it seems that to do all 3 of them and to make all 3 of them your top priority means that at a certain point, you get kind of low on capital. So how much of the U.
S. Equity markets and your ability to issue stock play into your plans to continue to pay a robust dividend, get to debt free and expand your fleet all within a 3 year period?
To become debt free will not be very difficult if the market is quite strong and balanced going forward. But the other part of your question is, we will pay dividend. Dividend is a priority. And we have had 1 basic assumption our thinking that is the world goes on. We cannot really plan that the world doesn't go on.
That gives no meaning. But we are following the market every day. I speak to our chartering Director, Mr. Tomstad, every morning and every evening and discussing and thinking about maneuvering. I don't get involved in day to day chartering, only if there are important questions involving Libya, for instance, Libya, we were the first people who saved refugees in the Mediterranean coming from Libya.
We did in September 2013. And when we move from the east to the west, I get involved, we had the problems of what you call them, some shoot of us. Pirates. Pirates, you know. We have barbed wire on our ships.
We and we have armed guards on our ships and we go through many times the Persian Gulf between Iran and the other country. There, we are the Strait of Hormuz. We are used to handling risk. The Strait of Hormuz is 29 feet. Nordigrin miles.
Nautical miles. And we go there very often. So we are used to handling these risks, which also has to do with the capital. But coming back to your question, dividend is a priority To issue stock in the equity market is not at all a priority. And we are always looking around the next corner and looking for a better market and of course the trouble with ship owners is always they are overly optimistic, overly optimistic.
And we try to curtail our optimism. We try to do that. We literally speaking try to be sober. And I have a lot of cash in this company and I cannot afford to go bankrupt. That's why I'm so very careful in this.
Sorry, Yonatan, that I didn't respond more clearly. But if I'm right, the dividend is priority.
Understood. I'll let others ask questions. Thank you.
Thanks. A pleasure that you would join. Andrea, anybody else?
Yes. We are now taking our next question from the line of Jeffrey Scott. Please ask your question.
Good afternoon. Thanks for taking my question. I really want to explore the thinking behind your willingness to spend money on special surveys for the 12 ladies you have that are over 15 years old. A special survey at 17.5 requires about, in my calculation, about $4, 000 a day of incremental revenue to pay for it. So given where day rates are now, what is your thinking about going through special surveys on that older part of the fleet?
I don't know if you saw Exxon just grab the ship which were 38 years of age, 38 years of age, ExxonMobil. And when we focus a lot on customers, you cannot run a business without customers. And when the ships are good enough for ExxonMobil Shell and BP, they are good enough for us. I can assure you. And the only thing that is too old is probably the Chairman, somebody is saying that the Chairman of Nordic American is too old, but we don't need that to have a discussion on that.
But these calculations you mentioned, they're very theoretical. They're very theoretical. And I summarize it. When the best companies in the world, Equinor, Total and others say they are fine, it's fine. And they also comply with our requests.
And to draw these lines in the sand or wherever doesn't give you any wet to go. We are extremely quality orientated. You know, 1 of the biggest companies in Scandinavia is Stearna Line in Sweden. They scrapped 1 of their ferries carrying people And the ferry was 40 years of age. They carried people in a vessel that was 40 years.
And then we must be able to carry oil, crude oil in a ship, which is 15 years of age. And of course, if we had felt uneasy about a ship which is 15 years or 3 years or 15 years or 20 years, we wouldn't have been running this business. I remember we had 1 of the top insurance experts in the world participating in our Board. And we had a competitor resubmitted a proposal for a ship that were about 15 years or slightly less. And the other guy, he had a ship which were 3 years.
And somebody said it's obvious they will take this, which is 3 years this ship. But then I said, you must remember that the owner is sitting in jail. And it is a question what I said earlier, the quality of people and the quality of assets and the access to money. So I'm not concerned about the age of a ship, but of course, the renewal of the fleet is always on the agenda, no question. And it will be properly on the agenda.
And this is market related. When the market is strong, many people have forgotten what I mentioned about age.
Okay. The Nordic Sirius, for example, turns 20 years old on October 19. So we're talking less than 2 months. And she's sitting now off the coast of China. So are you saying that you will pay for a special survey for her and get her going for another 2.5 years?
Absolutely.
No question. And the same thing would be true for the Pollocks?
And the same thing will be true for the Shannon. You should become a ship owner.
I own some of your stock because I am a ship owner.
That's good for you. That's good for you. We have paid $50 in dividend over the last years, $9 the last 10 years. But anyhow, to be very serious, this I cannot argue with people about age, but they argue with people about customers. And when big oil are saying this is good and it is the same in our judgment, You can say a lot about us, but we are not stupid.
But we don't wish to give all the money to ship brokers, I can tell you.
Okay. Forget about the absolute age, let's talk about the ship performance. The fuel consumption on the 20 year old ship is substantially higher than the fuel consumption on a new ship. Is that not correct?
No, that may not be the case, because you must remember, are you in ballast? Are you in laden condition? Are you that is very important. And how fast do you go? How fast do you go?
When you are in ballast, many ships goes down to 10 knots. And this difference between a newer ship and not such a new ship, It's becoming smaller and smaller and smaller. But of course, it is a consideration. It is a consideration. But normally speaking, it's not as big.
The difference is not that large as many people think. It's not. That is our experience. We have the cost picture for each individual ships. I would say and if somebody would correct me, the difference could be 3 tons, 4 tons at a very low speed.
Yes. Yes, at a very low speed. At 10 or 10. Would you say that, Fritchard? Yes.
At 10 knots, 10 miles, it's Yes. 10 miles, when you go 10 knots, 10 knots. But again, this it is a question also, Scott, whether you have invested $60, 000, 000 or whether you have invested $15, 000, 000 or $20, 000, 000 that's a big, big difference. But the main point is the quality. We never compromise on quality and big oil, they never compromise on quality.
And we will never do that either. So sorry about that.
Okay. I'll leave it to somebody else. Thank you.
Thank you, Scott. Anybody else, Andrea, who would like to be given a crash course in tanker economics?
Yes. We have another question coming from the line of Josh Dunof. Please ask your question.
Yes. Hello. Can you hear me?
Yes.
Okay. So earlier you had mentioned that the American Capital Markets are very important to this business. But given the dividend as a percentage of the stock price, it doesn't seem as though the American Capital Markets are valuing the shares adequately. That being said, would you not think it would be in the best interest of the company to retire shares at this time?
The question is how the stock is rated according to compared with the scrap value, if you wish. I have over the years had a policy, we have had a policy. We don't comment on the stock market, the stock market and the stock price. The stock price is the stock price. And if I say they value it too lowly, we have seen now recently that some of my colleagues have bought stock in the company And my son, who is a member of the Board, he has bought stock in the company.
And when you theoretically, if you should buy back stock, then it means that the stock price is below that so called steel value. But again, it is the quality of the ship and not the steel value. And I don't know if anybody would like to say more about this. It would be wrong to buy back stock at this time on our view. The main, I would say, grievance and criticism unfounded in my view is some people have said, well, your stock is too highly priced.
And I said, oh, that's bad. What shall we do about a too highly priced stock? Stock? Shall we ask shareholders to ask them what they say about that? And if the stock is too highly priced, then our response is fine.
We can live with that. We can live very well with that because but the underlying premise here is how we treat dividend and how we treat the capital structure question. That is how really, but it wouldn't be right that we understand it now to buy back stock at this time. But if somebody could write me a memo of half a page or 1 page and tell me why, then I will read the memo with great interest. Okay.
Thank you. Andrea, any more wishing to ask questions?
Yes. We have another question coming from the line of Harald Rippey. Please ask your question.
Harold? Hello. How are you doing? Can you hear me?
Yes.
Okay. I was wanting to know about when as you go to expand the fleet, are you planning to do that by issuing shares or by doing it through cash flow mostly?
Well, it's a difficult question, but I we will prioritize cash flow. And my experience is and our experience, it can go very, very fast. It can go very, very fast. We have seen it now some time ago. In 1 year ago, the cash was 67, 000, 000 dollars And recently it was $145, 000, 000 So it can go very, very fast.
And the answer is, you cannot give a precise answer at all, but we wish to expand the fleet at the right time with the right money in a way that is beneficial for the company and its shareholders without, I would say, jeopardizing our desire and our focus on paying dividend. That will that is a kind of main thing for us. But as 1 friend of mine said, the biggest room in the world is a room for improvement. And if any of you have good suggestions, send me a note. Anybody?
Thank you very much. That got the answer. I do like to see it being ships be bought with cash flow and not dilute to shareholder value. Thank you very much. Thank you.
Anybody else, Andrea?
There are no other questions on the line at the moment.
Nobody asked that question. You answered that right.
Well, I would then, Andrea and dear listeners, say thank you for joining us. It was a great pleasure to be with us. And if you feel that I said something wrong, send me a note and don't be too hard on me. We are always trying to do the best. And the question is whether the best is good enough.
You never know that. I have a great admiration for America. And that admiration, I will keep irrespective of Trump or anybody else. And again, to be a businessman, it's quite a hard job, I can tell you and you know that yourself. And because I feel a very tough responsibility, I feel a responsibility now for our crew that I mentioned, but I also feel strong responsibility for our owners.
And I can assure you in concluding, this company is in great shape. And I disagree strongly with anybody eluding the opposite view. So and thank you very much, Andrea. Thank you very much, my friends. How many people did we have in here?
Andreas?
Yes, we had 126 people.
Okay. That's fine. Thank you very much for joining us and we keep in touch. Thank you.
Ladies and gentlemen, this concludes the call for today. Thank you for participating. You may all disconnect.