VLCCF - First Quarter 2013 Results
(Thomson Reuters ONE) -
HIGHLIGHTS
* Knightsbridge reports a net loss of $6.9 million and a loss per share of
$0.28 for the first quarter of 2013. Excluding the results from discontinued
operations, the Company reports a net loss of $0.4 million and a loss per
share of $0.02 for the first quarter.
* Knightsbridge reports EBITDA from continuing operations of $3.3 million and
EBITDA from continuing operations per share of $0.13 for the first quarter
of 2013.
* Knightsbridge announces a cash distribution of $0.175 per share for the
first quarter of 2013.
* In March 2013, Knightsbridge concluded newbuilding contracts for two
182,000 dwt Capesize bulk carriers.
* The VLCC Mayfair was sold and delivered in April 2013.
FIRST QUARTER 2013 RESULTS
The Company reports a net loss from continuing operations (i.e. the Capesize
vessels) of $0.4 million and a loss per share from continuing operations of
$0.02 for the first quarter compared with net income from continuing operations
of $1.3 million and earnings per share from continuing operations of $0.05 for
the preceding quarter. The decrease in net income is primarily attributable to a
decrease in vessel earnings. The average daily time charter equivalent ("TCE")
earned by the Company's Capesize vessels in the first quarter was $17,900
compared with $22,700 in the preceding quarter. In May 2013, the Company has an
average cash breakeven rate for its Capesize vessels of $8,900 per vessel per
day.
Following the sale of three VLCCs and the balance sheet classification of the
fourth as 'held for sale', the results of the VLCCs have been recorded as
discontinued operations in accordance with U.S. generally accepted accounting
principles. The Company reports a net loss from discontinued operations of $6.5
million and a loss per share from discontinued operations of $0.26 for the first
quarter compared with a net loss from discontinued operations of $1.6 million
and a loss per share from discontinued operations of $0.06 for the preceding
quarter. The increase in the loss from discontinued operations is primarily
attributable to the impairment loss of $5.3 million that was recorded in the
first quarter in respect of the Mayfair.
Cash and cash equivalents decreased by $15.9 million in the quarter. The Company
generated cash from operating activities of $3.4 million, received $4.4 million
as a deposit on the sale of the Mayfair, paid $15.4 million in installments on
the two newbuilding contracts, used $4.0 million to repay loan facilities and
paid $4.3 million in distributions to shareholders.
THE DRY BULK MARKET
The overall global economic climate remained weak through the first quarter of
2013 with certain regional differences. The European economy remains subdued
while more positive signs are observed from the United States. More US jobs were
created and official unemployment figures were approaching seven percent by the
end of the quarter. On the other hand and more worrying for the dry bulk market
are some of the leading indicators received from China. Declining Chinese
Purchase Market Index and curbs on real estate have lead to lower steel futures.
However, steel production remains at a high level and at the same time there has
been a strong draw down of iron ore inventories.
The dry bulk market showed few signs of recovery during the quarter, while the
smaller vessel sizes performed better than the Capesize segment in absolute
terms for most of the quarter. A Capesize earned on average $6,015 per day
according to the Baltic Dry Index, which did not cover operating expenses for
many owners.
There are some obvious explanations why the Capesize segment has underperformed:
* Iron ore exports out of Brazil have been low. There is a strong correlation
between the Brazilian iron ore export and the Capesize spot market due to
the long sailing distances.
* Fortescue delayed their ramp up of production in Australia from March until
May 2013.
* Colombian coal exports were almost 70 million metric ton lower on an
annualized basis, partly due to strikes during first quarter of 2013.
Our dependence of development of the Chinese economy has been highlighted for
several years. During 2012, iron ore and coal imports combined increased by more
than 12 percent, while preliminary data are showing an increase of about six
percent for the first three months of 2013. Historically the first quarter is
the slowest quarter of the year, which is mainly due to adverse weather in the
Southern Hemisphere.
Development in international coal and iron ore prices will have a great impact
on the dry bulk market going forward. Presently there is a positive arbitrage
both for steel producers and utilities compared to domestic Chinese iron ore and
coal. With new iron capacity from Australia, Brazil and West Africa coming on
stream the next three years and poorer quality of Chinese domestic iron ore, it
is expected that imports of iron ore to China will increase.
According to shipping analysts, the total dry bulk order book at the end of the
first quarter is below 100 million dwt or approximately 14 percent of the
existing fleet. At the same time, the fleet older than 20 years is estimated to
be approximately 88 million dwt and it is fair to say that the supply side is
becoming more balanced. The order book is front heavy and it is expected that
supply growth will be well below five percent in 2014 and 2015. There are still
available newbuilding slots for 2015 delivery, but quality yards have limited
capacity available. An interesting observation is that many yards are reluctant
to repeat prices achieved during the first quarter and analysts are estimating
that newbuilding prices have bottomed out.
In spite of the weak markets, there has been more interest in second hand
vessels. Many sales candidates have had several inspectors onboard. Some of the
sales concluded have been done at levels equal to or at higher than last done.
This is in particular true for vessels less than ten years old built at Japanese
or Korean yards.
THE FLEET
In March 2013, the Company agreed the sale of its final VLCC (the Mayfair) and
the vessel was delivered to the buyer on April 9, 2013. The Company recorded an
impairment loss of $5.3 million in results from discontinued operations in the
first quarter being the expected loss resulting from the sale of this vessel.
In March 2013, the Company concluded newbuilding contracts for two 182,000 dwt
Capesize bulk carriers with Japan Marine United Corporation ("JMU") in Japan.
The design provided by JMU represents the next generation Capesize bulk carriers
with the latest technology available in order to secure fuel efficiency. The
vessels are expected to be delivered during 2015. The Company has paid $15.4
million in installments and has purchase commitments of $87.0 million with
expected payments of $5.1 million and $81.9 million in 2014 and 2015,
respectively.
The Company's sailing fleet consists of four Capsize vessels. The Battersea is
employed in the spot market. The Golden Zhejiang and Golden Future are employed
on short term time charters with estimated expiries in the fourth quarter of
2013 and the first quarter of 2014, respectively. The Belgravia is on a long
term time charter with estimated expiry in the third quarter of 2014.
CORPORATE
In January 2013, the Company issued 35,061 common shares and paid $181,610 to
members of the Board of Directors, to the General Manager and the Dry Bulk
Manager in settlement of the first and second tranches of the RSUs granted in
December 2012 and December 2011, respectively, that vested on December 29, 2012.
On January 24, 2013, the Board of Directors granted a total of 94,476 RSUs
pursuant to the 2010 Equity Plan to members of the Board and the two management
companies. These RSUs will vest over 3 years at a rate of 1/3 of the number of
RSUs granted on each anniversary of the date of grant.
24,472,061 ordinary shares were outstanding as of March 31, 2013, and the
weighted average number of shares outstanding for the quarter was 24,462,711.
The Board has decided to declare a cash distribution of $0.175 per share. The
record date is May 22, 2013, the ex cash distribution date is May 20, 2013 and
the cash distribution will be paid on or around June 5, 2013.
OUTLOOK
The Board believes the recent Capesize newbuilding contracts concluded with JMU
represents an attractive investment for the Company in terms of risk/reward.
Although we are in a period with over supply in the dry bulk market, the Board
expects the situation to improve at the time of delivery of the newbuildings.
Knightsbridge remains well positioned in the market place with its modern bulk
fleet and financial flexibility. The Company will continue to search for
additional acquisitions in market segments where the risk/reward ratio is
attractive.
FORWARD LOOKING STATEMENTS
Matters discussed in this report may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements, which 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 Tankers Limited and its subsidiaries, or the Company, 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. This report and any other written
or oral statements made by us or on our behalf may include forward-looking
statements, which reflect our current views with respect to future events and
financial performance. The words "believe," "anticipate," "intend," "estimate,"
"forecast," "project," "plan," "potential," "will," "may," "should," "expect"
and similar expressions identify forward-looking statements.
The forward-looking statements in this report are based upon various
assumptions, including, without limitation, management's examination of
historical operating trends, data contained in our records and 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. We undertake no obligation to update
any forward-looking statements, whether as a result of new information, future
events or otherwise.
In addition to these important factors and matters discussed elsewhere herein
and in the documents incorporated by reference herein, 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, fluctuations in currencies and interest rates, general market
conditions, including fluctuations in charter hire rates and vessel values,
changes in demand in the dry bulk market, changes in the Company's operating
expenses, including bunker prices, drydocking and insurance costs, the market
for the Company'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, political events or acts by terrorists, and other important
factors described from time to time in the reports filed by the Company with the
Securities and Exchange Commission, or the Commission.
The Board of Directors
Knightsbridge Tankers Limited
Hamilton, Bermuda
May 7, 2013
Questions should be directed to:
Contact:
Ola Lorentzon: Chairman, Knightsbridge Tankers Limited
+ 46 703 998886
Inger M. Klemp: Chief Financial Officer, Knightsbridge Tankers Limited
+47 23 11 40 76
1st Quarter 2013 Results :
http://hugin.info/132879/R/1700455/561299.pdf
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(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#1700455]
Unternehmensinformation / Kurzprofil:
Datum: 08.05.2013 - 14:32 Uhr
Sprache: Deutsch
News-ID 257712
Anzahl Zeichen: 14542
contact information:
Town:
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Kategorie:
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