ITCL - Third Quarter 2010 Results
(Thomson Reuters ONE) -
Highlights
· Independent Tankers reports net income of $2.8 million, equivalent
to earnings per share of $0.04 for the third quarter of 2010.
· Independent Tankers reports net income of $10.0 million, equivalent
to earnings per share of $0.13 for the nine months ended September 30, 2010.
· Chevron Transport Corporation did not give irrevocable notice of
termination of the bareboat charter for the Phoenix Voyager in September 2010.
Consequently, the vessel will continue on a bareboat rate of $28,500 per day
until March 2013.
· The UK tax leasing arrangement for the VLCC British Purpose was
terminated in July 2010.
· Consent solicitations launched in October 2010 to amend bond
indentures and to approve the proposed current or future sale of two VLCCs. The
solicitations ended in November 2010 when the bondholders voted against all
proposals.
Introduction
Independent Tankers Corporation Limited (the "Company" or "Independent Tankers")
was incorporated in Bermuda on January 18, 2008 and the shares have traded on
the Norwegian over-the-counter market, since March 7, 2008. Independent Tankers'
business is mainly concentrated on the ownership and operation of crude oil
tankers on long term bareboat contracts which include certain cancellation
options to major oil companies. Independent Tankers owns or leases six VLCC's
and three Suezmax tankers. All vessels are financed through bonds in the US
market and one vessel is also subject to financial lease arrangements. The main
shareholder is Frontline Ltd. ("Frontline") with an ownership of approximately
83 percent.
Third Quarter and Nine Month Results 2010
The Board of Independent Tankers announces net income of $2.8 million,
equivalent to earnings per share of $0.04 for the third quarter of 2010. This
compares with net income of $1.0 million, equivalent to earnings per share of
$0.01 for the preceding quarter. The increase is primarily due to a decrease in
costs in the third quarter. The Company incurred costs of approximately $2.7
million in the preceding quarter (Q3 2010; nil) regarding the early redemption
of the Front Voyager bond. This decrease in costs was partially offset by a $1.1
million reduction in interest income generated on cash balances held by the
Company.
The average daily bareboat rate earned in the third quarter by the Company's
VLCCs was approximately $24,200 compared with approximately $24,500 in the
preceding quarter.
Net interest expense for the quarter was $5.1 million (preceding quarter: $4.9
million). At September 30, 2010, all of the Company's bond debt of $303.3
million is at fixed interest rates ranging from 7.84% to 8.52%.
For the nine months ended September 30, 2010 the Company announces net income of
$10.0 million, equivalent to earnings per share of $0.13 (2009 comparable nine
months $11.4 million, equivalent to earnings per share of $0.15). Net interest
expense was $15.1 million (2009 comparable nine months: $16.0 million).
In November 2010, the Company has an average cash breakeven rate for its VLCCs
of approximately $18,500 per vessel per day.
Chartering Summary
Chevron Transport Corporation did not give irrevocable notice of termination of
the bareboat charter for the Phoenix Voyager in September 2010. Consequently,
the vessel will continue on a bareboat rate of $28,500 per day until March
2013. The bareboat charter for the other vessel in the Golden State structure,
the VLCC Antares Voyager, will be terminated early December 2010.
Other Matters
On July 15, 2010, the UK tax lease arrangement between Sandringham Shipping Plc
and Dresdner Kleinwort Leasing relating to the VLCC British Purpose was
terminated and the outstanding lease obligation was settled in full using
restricted cash. At June 30, 2010 the lease obligation was $66.2 million and the
termination was cash neutral for the Company. The vessel was sold to Sandringham
Petro Limited, a previously dormant subsidiary of Independent Tankers, which
simultaneously entered into a lease with Sandringham Shipping Plc.
On October 15, 2010, Golden State Petroleum Transport Corporation. acting on
behalf of Golden State Petro (IOM I-A) PLC the owner of the VLCC Antares
Voyager, launched a consent solicitation to amend the indenture relating to its
8.04% First Preferred Mortgage Notes due 2019. In addition, Windsor Petroleum
Transport Corporation, acting on behalf Buckingham Petro Limited, the owner of
the VLCC British Pioneer, launched a consent solicitation to amend the indenture
relating to its 7.84% First Preferred Mortgage Notes due 2021. The purpose of
the consent solicitations was to amend and clarify certain indenture and
collateral agreements and to provide for the potential sale of the VLCCs Antares
Voyager and British Pioneer. On November 10, 2010 the consent solicitations
period ended when the majority of bondholders in both the Golden State and
Windsor structures voted against all the proposals. The present indentures
require that we call for a new bondholders meeting in order for the bondholders
to approve or reject a sale. The timing and outcome of this process is uncertain
and may influence number of bidders, price of the vessel and indirectly the pay
out ratio to the bondholders.
74,825,166 ordinary shares were outstanding as of September 30, 2010, and the
weighted average number of shares outstanding for the quarter was also
74,825,166.
The Market
The market rate for a VLCC trading on a standard 'TD3' voyage between The
Arabian Gulf and Japan in the third quarter of 2010 was WS 52; equivalent to
$17,000/day; representing a decrease of approximately WS 36 points or
$37,500/day between the second quarter of 2010 and an increase of WS 16.5 points
from the third quarter of 2009. Present market indications are approximately
$23,000/day in the fourth quarter.
The market rate for a Suezmax trading on a standard 'TD5' voyage between West
Africa ("WAF") and Philadelphia in the third quarter of 2010 was WS 75.5;
equivalent to approximately $14,444/day compared to $32,700/day in the second
quarter. There was a decrease of WS 38 points from the second to the third
quarter and an increase of WS 23 points from the third quarter of 2009. Present
market indications are approximately $19,000/day in the fourth quarter.
Bunkers at Fujairah averaged approximately $444.5/mt in the third quarter of
2010 compared to $461/mt in the second quarter of 2010; a decrease of $16.5/mt.
Bunker prices varied from a low of $421.5/mt at the beginning of July and a high
of $468/mt at the beginning of August. On November 22, 2010 the quoted bunker
price in Fujairah was $481.5/mt.
Philadelphia bunkers averaged $465/mt in the third quarter, which was a decrease
of $4/mt from the second quarter of 2010. Bunker prices varied from a low of
$439.5/mt at the beginning of July and a high of $492.5/mt on August 9. On
November 22, 2010 the quoted bunker price in Philadelphia was $486.5/mt.
The International Energy Agency's ("IEA") November 2010 report stated an average
OPEC oil production, including Iraq, of 29.2 million barrels per day (mb/d)
during the third quarter of the year. This was an increase of 220,000 barrels
per day compared to the second quarter of 2010 and an increase of 390,000
barrels per day compared to the third quarter of 2009.
IEA further estimates that world oil demand averaged 88.5 mb/d in the third
quarter of 2010, representing an increase of approximately 1.5 md/d compared to
the second quarter of 2010, and approximately 3.2 mb/d from the third quarter of
2009. Additionally, the IEA estimates that world oil demand will average
approximately 87.3 mb/d in 2010 representing an increase of 2.8 percent or
approximately 2.3 mb/d from 2009.
The VLCC fleet totalled 539 vessels at the end of the third quarter of 2010, up
from 530 vessels at the end of the previous quarter. 14 VLCCs were delivered
during the quarter versus an estimated 12 at the beginning of the year.
Throughout 2010 the current estimate is 63 deliveries. The orderbook counted
183 vessels at the end of the third quarter, up from 170 orders from the
previous quarter. 27 new orders were placed during the quarter and the current
orderbook represents about 34 percent of the VLCC fleet. During the quarter five
vessels were removed from the trading fleet for scrapping or conversion/storage
purposes. According to Fearnleys the single hull fleet now stands at 49 vessels.
The Suezmax fleet totalled 408 vessels at the end of the third quarter, up from
406 vessels at the end of the previous quarter. Four vessels were delivered
during the quarter versus an estimated six at the beginning of the year.
Throughout 2010 the current estimate is 54 deliveries. The orderbook counted
145 vessels at the end of the quarter, up from 136 vessels at the end of the
previous quarter. 18 new orders were placed during the quarter and the current
orderbook now represents 36 percent of the total fleet. Two vessels were removed
from the trading fleet and according to Fearnleys the single hull fleet now
stands at 21 vessels.
Strategy and Outlook
The Company's strategy is mainly concentrated around long term charters to
reputable oil companies and currently BP and Chevron. The Company's charter
coverage for its double hull VLCCs is 99 percent for the remaining part of 2010
and 100 percent in 2011, if Antares Voyager and British Pioneer are sold. The
charter coverage for the three Suezmax tankers is 100 percent for the remaining
part of 2010 until 2015. The Company expects to reduce net debt for the
remaining part of 2010 by approximately $11.0 million.
Independent Tankers has historically not been influenced by market exposure due
to fixed bareboat contracts on all the vessels. As a consequence of the
termination of the bareboat charters for the VLCCs British Pioneer and Antares
Voyager, however, the Company may be exposed to market fluctuations for these
vessels if they are not sold. It is difficult to predict the outcome for these
two vessels due to the bondholders rejection of the proposals in the consent
solicitations. Frontline, as manager, will work in order to find potential
buyers for the vessels subject to a certain price requirement. A bondholders
meeting must be held in order to approve or reject any offers. If there are no
buyers or an offer is rejected by the bondholders, Frontline needs to seek
bareboat or spot charters for the vessels, in line the requirements of the
indentures.
The Company have e low cash breakeven rates. Financing is arranged through the
US bond market with long term bonds with maturities from 2015 to 2021. The
combination of fixed bareboat charters and floating market rates for the four
VLCCs creates a solid platform for the Company going forward. However, the
uncertainty around a potential sale or charter to a non investment grade
counterparty for Antares Voyager and British Pioneer, increase the risk of the
Company and might have negative influence on our future profit.
Forward Looking Statements
This press release contains forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including the Company's management's examination of historical
operating trends. Although the Company believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond its control, the Company cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to
differ materially from those discussed in this press release include the
strength of world economies and currencies, general market conditions including
fluctuations in charter hire 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 the Company's operating
expenses including bunker prices, drydocking and insurance costs, 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 the Company with the Norwegian over-the-
counter market in Oslo.
The Board of Directors
Independent Tankers Corporation Limited
Hamilton, Bermuda
November 23, 2010
Questions should be directed to:
Bengt Neteland: Vice President Finance, Frontline Management AS
+47 23 11 40 37 or +47 924 99 386
[HUG#1465088]
3rd quarter 2010 results:
http://hugin.info/138953/R/1465088/403426.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: Independent Tankers Corporation Limited via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 24.11.2010 - 08:30 Uhr
Sprache: Deutsch
News-ID 49058
Anzahl Zeichen: 15452
contact information:
Town:
0112 Oslo
Kategorie:
Business News
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