We already know that the crude oil carriers' hire rates weren't higher in the third quarter. In fact, they tanked. Overseas Shipholding Group
Industrywide, average spot tanker rates were nearly cut in half from the prior quarter, to less than $18,000 per day. Once again, Nordic American pulled down above-average rates in this declining market, thanks to both its fleet quality and its practice of securing work a few weeks in advance. That said, Nordic American netted rates more than 150% above its breakeven level, so it's far from "broke down."
Revenue and earnings were also hit by a large amount of offhire days, during which vessels went in for steel improvement and other maintenance work. Because Nordic American completely countenances the capricious swings of the spot market, it's sensible for the company to time its tanker tinkering. It's an interesting contrast to a company like XTO Energy
One of the factors weighing on the outlook for tanker operators like Nordic American, Frontline
This management team is comfortable expanding its fleet at this stage, but it makes no claim to see the future more clearly than anyone else. If you find the unpredictable unappealing, Nordic American might not be for you. Then again, 10 consecutive years of double-digit dividend yields aren't all that unpredictable, are they?