VLCCF - FIRST QUARTER 2012 RESULTS
(Thomson Reuters ONE) -
HIGHLIGHTS
· Knightsbridge reports net income of $7.1 million and
earnings per share of $0.29 for the first quarter of 2012.
· Knightsbridge reports EBITDA of $14.3 million and EBITDA
per share of $0.58 for the first quarter of 2012.
· Knightsbridge announces a cash dividend of $0.35 per share
for the first quarter of 2012.
FIRST QUARTER 2012 RESULTS
Knightsbridge Tankers Limited (the "Company" or "Knightsbridge") reports net
income of $7.1 million and earnings per share of $0.29 for the first quarter
compared to net income of $7.8 million and earnings per share of $0.34 for the
fourth quarter of 2011. The net income for the first quarter and the preceding
quarter both include an allowance for doubtful accounts of $1.7 million for
unpaid charter hire (total of $3.4 million). The fourth quarter provision was
not included in the preliminary, unaudited fourth quarter and final year 2011
results announced on February 8, 2012. The decrease in net income in the first
quarter compared with the fourth quarter is primarily attributable to rate
reductions on the Hampstead and the Belgravia time charters offset by a decrease
in operating costs.
The average daily time charter equivalents ("TCEs") earned by the Company's
VLCCs, excluding bareboat charters, and Capesize vessels were $23,400 and
$35,600, respectively, compared with $26,900 and $36,500 in the preceding
quarter. In May 2012, the Company has average cash breakeven rates for its
VLCCs, which are trading in the spot market, and Capesize vessels of $14,000 and
$8,400, respectively, per vessel per day. The VLCCs which are on bareboat
contract have a cash break even rate of $4,300 per vessel per day.
Cash and cash equivalents decreased by $0.5 million in the quarter. The Company
generated cash from operating activities of $12.6 million, used $0.9 million to
repay loan facilities and debt fees and paid $12.2 million in dividends.
THE TANKER MARKET
The market rate for a VLCC trading on a standard TD3 voyage between the Arabian
Gulf and Japan in the first quarter of 2012 was WS 56, representing an increase
of about WS 2 points from the forth quarter of 2011 and a decrease of about WS
9 points from the first quarter of 2011. Present market indications are
approximately $25,000/day in the second quarter of 2012.
Bunkers at Fujairah averaged $730/mt in the first quarter of 2012 compared with
$672/mt in the fourth quarter of 2011; an increase of approximately $58/mt.
Bunker prices varied between a low of $695/mt at the beginning of January and a
high of $752/mt on the 27(th) of February.
The International Energy Agency's ("IEA") April 2012 report stated call-on OPEC
oil production, including Iran and Iraq, of 31.42 million barrels per day (mb/d)
during the first quarter of 2012 including a decrease in Iran production of
250,000 barrels per day. This was an increase of 895,000 barrels per day
compared with the fourth quarter of 2011. The increase was led by a sharp
recovery in Libyan production and the highest level since mid 2008.
IEA further estimates that world oil demand averaged 89.90 mb/d in the first
quarter of 2012, which is an increase of 400,000 barrels compared with the
previous quarter. Additionally, the IEA estimates that world oil demand will
average approximately 90 mb/d in 2012, representing an increase of 1.2 percent,
or approximately 1.07 mb/d, from 2011.
The VLCC fleet totalled 598 vessels at the end of the first quarter of 2012, up
from 594 vessels at the end of the previous quarter. 11 VLCCs were delivered
during the quarter whilst seven was deleted. The orderbook counted 111 vessels
at the end of the first quarter, down from 123 orders from the previous quarter.
Current orderbook represents about 18 percent of the VLCC fleet. According to
Fearnleys the single hull fleet has been reduced by five to 25 vessels.
THE DRY BULK MARKET
The overall economic climate remains weak among the developed economies,
however, the IMF has revised its economic forecast slightly upward. There is
still a lot of uncertainty and many observers are concerned with some of the
European countries in particular.
As long as more than fifty percent of the total dry bulk trade, amounting to
approximately four billion tons, is destined for Asia, the growth in demand for
dry bulk transportation is robust. The two most important drivers for dry bulk
transportation are the steel industry, accounting for almost fifty per cent of
dry bulk trade (iron ore, metallurgical coal, scrap and steel itself), and
thermal coal used for energy, representing close to twenty per cent of dry bulk
trade.
During the first quarter of 2012, the dry bulk industry witnessed a decline of
1.8 percent compared to the fourth quarter of 2011. This is a positive growth of
five per cent compared to the first quarter of 2011. The main reason for this
seasonal slowdown is adverse weather in the southern hemisphere. Major exporting
areas in South America, South East Asia and Oceania were also facing logistical
difficulties during the first period of 2012. In addition, China was actively
building iron ore inventories in the second half of 2011 and as a consequence
their imports decreased in the beginning of 2012.
As in 2011, the Capesize segment was worst affected. Apart from the fact that
this vessel size mainly transports iron ore, the high influx of newbuildings
brought utilization of the Capesize fleet down to an anticipated 80 percent
level. This means that owners hardly covered their operating expenses. The
average earnings for a Capesize vessel during first quarter of 2012 were $6,990
per day compared to $7,900 for a Panamax, according to the Baltic Dry Index.
Newbuilding prices and second hand values remained under pressure.
Most dry bulk analysts have a fairly positive long term outlook. The size of the
order book will still have a negative effect medium term but the pace of
deliveries, in particular for the larger size vessels, is slowing down.
Scrapping is presently at historical highs and with more fuel efficient vessels
entering the market, owners of older tonnage will hesitate to take vessels
through special surveys if oil and bunker prices remain high.
Forecasters are not expecting a demand problem going forward. This is mainly
based on substantial new capacity of iron ore supply entering the market over
the next five years. At the same time, the quality of Chinese iron ore is
getting poorer and it is believed that steel makers in China will see increased
positive arbitrage opportunities by importing versus using iron ore produced
domestically.
China and India are expected to increase their demand for coal in the coming
years due to growth in energy consumption.
As a consequence of all the above factors, most dry bulk analysts are expecting
that utilization slowly will turn in owners favour within the next twelve to
eighteen months.
THE FLEET
On January 9, 2012, the Company announced an amendment to the time charter
agreement with Frontline Ltd. for the Hampstead. The time charter hire was
reduced from $37,750 per day to $27,050 per day for the remaining period of the
charter commencing January 1, 2012 until April 22, 2012, the date when the
vessel was re-delivered to us. The Company is entitled to be compensated if
actual earnings exceed the new rate up to and including the original rate. There
was no compensation for the first quarter of 2012.
On March 12, 2012, the Company issued a press release announcing that Sanko
Steamship Co., Ltd. ("Sanko") has requested that the Company agrees to a
deferral in payments of charter hire in respect of the Battersea. Sanko has also
issued a press release stating that it intends to meet all financial obligations
and to restructure and strengthen its balance sheet. The Company has been
informed that Sanko is planning to present formal rehabilitation proposals to
stakeholders at meetings in early June 2012.
In March 2012, the Company agreed an amendment to the time charter agreement for
the Belgravia with Jiangsu Shagang Group Co., Ltd ("Shagang") whereby (i) the
sum of $95,000 shall be deducted from future charter hire payments, which are
each payable 15 days in advance, until the amount of $5.7 million has been
deducted, and (ii) the sum of $5.0 million shall be pre-paid in one or more
installments no later than five months following receipt by Shagang of a
guarantee to be provided in accordance with the amendment.
CORPORATE AND OUTLOOK
Two of the Company's VLCCs and the four Capesizes are fixed on bareboat and time
charters expiring between January 2013 and 2016. The VLCCs Kensington and
Hampstead are employed in the spot market.
The Company's intention is to renew and grow the fleet and it has for some time
been considering acquisition opportunities. The combination of declining asset
values and weak spot and time charter earnings, have however made it challenging
to find satisfactory investment opportunities. The Company's financial
flexibility is strong with cash at hand, low gearing and availability of a
revolving credit facility of $75 million and the Company can respond quickly
should interesting acquisition opportunities occur.
The Company has made progress regarding unpaid charter hire since March
31, 2012 and is currently in constructive discussions with the relevant
counterparts in order to resolve this issue. Due to the ongoing uncertainty,
however, with respect to certain charter parties, the Board has reduced the
dividend this quarter and on May 10, 2012, the Board declared a dividend of
$0.35 per share. The record date for the dividend is May 23, 2012, the ex
dividend date is May 21, 2012 and the dividend will be paid on or around June
6, 2012. The Board's intention is to continue to pay out a major part of the
free cash flow after debt service as dividend to its shareholders.
24,425,699 ordinary shares were outstanding as of March 31, 2012, and the
weighted average number of shares outstanding for the quarter was 24,425,699.
FORWARD LOOKING STATEMENTS
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business. Forward-
looking statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts.
Knightsbridge desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The words
"believe," "except," "anticipate," "intends," "estimate," "forecast," "project,"
"plan," "potential," "will," "may," "should," "expect" "pending" and similar
expressions identify forward-looking statements.
The forward-looking statements in this document are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors, important factors that, in our view,
could cause actual results to differ materially from those discussed in the
forward-looking statements include the strength of world economies and
currencies, general market conditions, including fluctuations in charterhire
rates and vessel values, changes in demand in the tanker market, as a result of
changes in OPEC's petroleum production levels and world wide oil consumption and
storage, changes in Knightsbridge's operating expenses, including bunker prices,
drydocking and insurance costs, the market for Knightsbridge's vessels,
availability of financing and refinancing, changes in governmental rules and
regulations or actions taken by regulatory authorities, potential liability from
pending or future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to accidents or
political events, and other important factors described from time to time in the
reports filed by Knightsbridge with the Securities and Exchange Commission.
The full report is available in the link enclosed.
The Board of Directors
Knightsbridge Tankers Limited
Hamilton, Bermuda
May 10, 2012
Questions should be directed to:
Contact:
Ola Lorentzon: Chairman, Knightsbridge Tankers Limited
+ 46 703 998886
Inger M. Klemp: Chief Financial Officer, Knightsbridge Tankers Limite
+47 23 11 40 76
1st Quarter 2012 Results :
http://hugin.info/132879/R/1611413/512531.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Knightsbridge Tankers Limited via Thomson Reuters ONE
[HUG#1611413]
Unternehmensinformation / Kurzprofil:
Datum: 11.05.2012 - 14:02 Uhr
Sprache: Deutsch
News-ID 145576
Anzahl Zeichen: 15786
contact information:
Town:
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Kategorie:
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