Nordic American Tankers: Q2 2026 profit of $68.3m came almost entirely from margin, not fleet growth

Nordic American Tankers reported results for the second quarter of 2026. Revenue rose 97.5% year on year to $79.3m, EBITDA by 345.6% to $68.6m, and net profit reached $68.3m against a loss of $0.9m a year earlier. Yet revenue was almost flat versus the previous quarter while profit rose by half again – so the driver was freight rates, not cargo volume. At the current price the share looks rather unattractive: EV/EBITDA of 10.3 against its own three-year average of 7.6, and the portal's model implies 54% downside to fair value.

Key takeaways

— Revenue rose 97.5% year on year but added only 2.3% versus the previous quarter – the growth rests on rates, not volume

— EBITDA margin of 86.6% against 38.4% a year earlier: almost all of the quarter's revenue reached EBITDA

— Net profit of $68.3m almost matched EBITDA of $68.6m – almost nothing was left below EBITDA

— Over the last twelve months net profit was $77.2m, and $68.3m of it came from the second quarter alone

— Net debt of $378.3m against LTM EBITDA of $190.5m is 1.99x – a level, not a direction

— Dividend yield of 8.9% rests on a payout funded by quarterly profit, not annual profit

— EV/EBITDA of 10.3 against its own three-year average of 7.6 – the market has already priced in the durability of current rates

Attractiveness

Key figures, USD bn

Revenue rose 97.5% year on year but added only 2.3% versus the previous quarter – the growth rests on rates, not volume

In the second quarter of 2026 revenue was $79.3m against $40.2m a year earlier – growth of 97.5%. This is the second consecutive quarter of doubling year on year: in the first quarter revenue rose 104.3% to $77.5m. After four quarters of decline – from minus 37.4% in Q1 2025 to minus 1.8% in Q4 – the company has returned to growth, and it has held for two quarters.

But the year-on-year comparison is against a depressed base: in Q2 2025 revenue was $40.2m and EBITDA $15.4m. The sequential picture is more modest: versus Q1 2026 revenue added 2.3%, from $77.5m to $79.3m. The fleet did not grow during the quarter, so the entire revenue increase came from freight rates, not from the number of voyages.

For a shareholder this means revenue is now anchored around $78–79m per quarter, and further growth is possible only through rates. If rates reverse, the year-on-year base will remain low for another two quarters, but the sequential trend will show it sooner.

EBITDA margin of 86.6% against 38.4% a year earlier: almost all of the quarter's revenue reached EBITDA

EBITDA in Q2 2026 was $68.6m – up 345.6% year on year from $15.4m. The margin rose to 86.6% from 38.4% a year earlier. Such a level means variable voyage costs barely grew with revenue: crew, fuel and port dues are largely fixed, so an increase in rates falls straight into EBITDA.

The gap between revenue and EBITDA is $10.7m per quarter. That is the fixed cost base of the fleet. At revenue of $79.3m it is 13.5%, whereas a year earlier, at revenue of $40.2m, the same costs consumed 61.6%. It is this operating leverage, not fleet growth, that explains the jump in profit.

The flip side is fragility. If rates return to the level of Q2 2025, the same fixed base will again take more than half of revenue, and EBITDA will compress towards $15m. An 86.6% margin is not a new quality of the business but a point on the rate curve.

Net profit of $68.3m almost matched EBITDA of $68.6m – almost nothing was left below EBITDA

Net profit in Q2 2026 was $68.3m against a loss of $0.9m a year earlier. The gap to EBITDA is just $0.3m. That means depreciation, interest and taxes together barely touched the quarter's result. A year earlier, with EBITDA of $15.4m, the company posted a loss of $0.9m: then costs below EBITDA exceeded operating profit.

The net margin rose to 86.2% from minus 2.1% a year earlier. Such a net margin is higher than at most shipping companies, and it reflects not only rates but also a low tax charge in the quarter. For comparison: over the last twelve months net profit was $77.2m on revenue of $261.3m – a margin of 29.5%. One quarter produced 88% of the annual profit.

For a holder this is the key detail: the quarter's profit is not a sustainable base for the dividend. It reflects a peak in rates, not the average level of the business.

Over the last twelve months net profit was $77.2m, and $68.3m of it came from the second quarter alone

Over the last twelve months ended 30 June 2026 revenue was $261.3m, EBITDA $190.5m, and net profit $77.2m. Operating cash flow over the same period was $19.8m. That is an important gap: with EBITDA of $190.5m, cash flow is four times smaller. The reason is that a large part of the quarter's revenue has not yet turned into cash – it either sits in receivables or went to debt service and working capital.

Breaking the year into quarters: Q3 2024 produced $8.7m of profit, Q4 $1.3m, Q1 2025 $4.2m, Q2 a loss of $0.9m, Q3 a loss of $2.8m, Q4 $11.7m, Q1 2026 $46.3m, Q2 $68.3m. The last two quarters produced $114.6m of profit, while the previous six produced $22.2m. The whole year rests on the second half.

For valuation this means the P/E of 20.4 on trailing twelve-month profit rests on earnings that are unlikely to repeat next year. If rates stay at Q2 levels, annual profit will be higher; if they revert to the average, the P/E will be substantially above 20.

Net debt of $378.3m against LTM EBITDA of $190.5m is 1.99x – a level, not a direction

Net debt at the latest reporting date was $378.3m. Against LTM EBITDA of $190.5m that is 1.99x. On its own this is a moderate level for a shipping company: below three, and debt service at current EBITDA is covered with room to spare. But it cannot be compared with the previous value – it is not in the facts, so the direction of the ratio is undefined.

Absolute debt has grown over the year: from $237.3m at the end of Q3 2024 to $378.3m at the end of Q2 2026. An increase of $141m over seven quarters is about $20m per quarter. The profit of the last two quarters, $114.6m, partly covered this build-up but not fully.

Operating cash flow over twelve months was $19.8m. That is not enough to service $378.3m of debt and pay dividends. So the dividend of recent quarters was funded not so much from operating cash flow as from profit that has not yet converted into cash. For a holder this is the main risk: if rates fall while debt remains, free cash flow for the payout may prove insufficient.

Dividend yield of 8.9% rests on a payout funded by quarterly profit, not annual profit

Dividend yield over the last twelve months is 8.9%. That is above the key rate, and for an income investor such a yield looks attractive. But it is calculated on profit that is 88% composed of one quarter. If the payout is tied to quarterly profit, the next quarter with a lower rate will automatically reduce the dividend.

Our estimate for the current year: if rates hold at Q2 levels, the company could earn around $200m of net profit, and with a payout ratio of 50–60% the dividend could be $100–120m, giving a yield of 6–8% on the current market capitalisation of $1,576.5m. This is our estimate, and it rests on two assumptions: rates do not fall and the payout ratio is maintained.

What would make the payout smaller: a fall in freight rates, rising debt, or the need to direct more money to debt service. Operating cash flow of $19.8m over twelve months is already less than needed to cover the dividend and debt at the same time. If rates return to 2025 levels, the dividend could be cut or cancelled.

EV/EBITDA of 10.3 against its own three-year average of 7.6 – the market has already priced in the durability of current rates

EV/EBITDA over the last twelve months is 10.3. Its own three-year average is 7.6. The share trades 35% above its history. This means the market values current EBITDA as sustainable rather than peak. If EBITDA returns to the average, the multiple will be substantially above 10.3.

P/E on trailing twelve-month profit is 20.4. That too is higher than one might expect for a shipping company at a cycle peak. The reason is that the twelve-month profit includes the weak quarters of 2025, while the market looks at current earnings. If annual profit reaches $200m, the P/E would fall to 7.9 – but only if rates hold.

The portal's model implies 54% downside to fair value: EBITDA is re-priced at current commodity prices at the target EV/EBITDA, and against market capitalisation that produces this result. This is our own model, not a consensus. It shows that if rates normalise, the share is worth substantially less than the current price.

Valuation on the latest reported figures

Bottom line

The quarter is genuinely strong: revenue rose 97.5% year on year, EBITDA by 345.6%, and net profit was $68.3m against a loss a year earlier. But almost all of the growth is rates, not volume: revenue added only 2.3% versus the previous quarter, and the 86.6% EBITDA margin reflects operating leverage at a cycle peak. Trailing twelve-month profit of $77.2m is 88% composed of one quarter, and operating cash flow of $19.8m covers neither the $378.3m of debt nor the dividend. With EV/EBITDA of 10.3 against its own three-year average of 7.6 and the portal's model implying 54% downside, the share looks rather unattractive: the market has already priced in the durability of current rates, and there is no cushion if they reverse.