NAT Keeps Focus on Reducing Fuel Use

NAT said well-maintained vessels put it in a good position to profit from market recovery

Nordic American Tankers Limited [NYSE:NAT] (NAT) says it is continuing to focus on reducing its fuel consumption as it widened its loss in the first quarter of the year.

The company reports that it lost $32.4 million on revenues of $17.3 million in the first quarter of 2013, compared with a loss of $9.4 million and revenues of $30.5 million in the same quarter last year.

NAT said most of the fuel-efficiency measures it has implemented, including the installation of Alpha Lubricators on all vessels and the installation of main engine sliding valves, which allow for safe slow steaming, have a payback time of about a year.

The company says it is also testing mechanical equipment that ensures optimal water stream over the propeller, maximising its efficiency and allowing vessels to run at the same speed at lower revolutions, resulting in fuel savings.

Collectively, the improvements provide efficiency gains between 10 and 15 percent.

The tanker company also acquired a Suezmax tanker during the quarter, which is due for delivery by June 15, bringing it to a total fleet of 21 ships.

Looking ahead, NAT said the tanker market "remains challenging," although there were underlying signs of improvement.

It said the orderbook for Suezmax tankers is shrinking, which should improve rates, and it is prepared to reap benefits when the market does turn around.

"Our fleet is in excellent technical and operational condition, and NAT has the financial resources to maintain it that way," the company said.

"Clients know that we do not compromise on the quality of our operations."

NAT said last year that investments it was making to its fleet would reduce fuel consumption by about five tonnes of fuel per vessel per day.