Nordic American Offshore Ltd. (NYSE

NAO) - 2Q2018 Earnings Report

Link to the complete 2nd Quarter 2018 report:
http://hugin.info/159489/R/2210435/860468.pdf

Hamilton, Bermuda, August 10, 2018.

Nordic American Offshore Ltd ("NAO" or the "Company") owns and operates a fleet of 10 Platform Supply Vessels (PSV) each averaging approximately 4,000 DWT and with an average age of about 4 years. The vessels are primarily engaged in the North Sea offshore market between United Kingdom and Norway. The reactivation of two of our three laid-up vessels proved more costly than anticipated. There are no such costs anticipated for 3Q18.  

We have during the last few weeks entered into term contracts for 4 of our 9 vessels ranging from 2 to 5 months, securing business for these vessels for the remainder of the present quarter and well into 4Q18. One of these term contracts are outside the North Sea and we are carefully considering expanding our geographical presence, on selected term business.

Results (accounting wise) for the second quarter 2018 came in slightly better compared with first quarter 2018. The Net Operating Loss was -$7.9m for 2Q18 as compared with -$8.3m for 1Q2018 (GAAP measure). The Adjusted Net Operating Result^[1] for 2Q18 was -$3.5m as compared to -$4.1m (cash loss) for 1Q2018.

With the 4 term contracts concluded, and earnings achieved up until now, the revenue for 3Q18 is already close to that of the entire 2Q18. We still have 5 vessels available in the spot for the remainder of the quarter, that can add additional revenue.

The basic features of NAO are similar to the business model of the NYSE listed tanker company Nordic American Tankers Limited ("NAT"). NAT holds 16.1% of NAO's common shares.    
The Executive Chairman of NAO and his immediate family hold 13.4% of NAO's common shares.  He is also the Chairman & CEO of NAT.

NAO aims to pursue a conservative financial policy. At the end of 2Q2018, the net debt^[2] per vessel was $11.8 million.

We concentrate on keeping our vessel operating costs low, while always maintaining our strong commitment to safe operations. As we expand our fleet, we do not anticipate that our administrative costs will rise correspondingly.

We plan to have a telephone-conference later in August or September.

For further details on our financial position, please see the financial information reported below and this entire release.

Strategy Going Forward

The main elements of NAO's strategy are based on a homogenous fleet, low debt, low G&A costs and liquidity in the stock. NAO has about 35,000 shareholders, mostly in the USA. Under improved market conditions dividend is a priority.