ITCL - First Quarter 2011 Results
(Thomson Reuters ONE) -
Highlights
· Independent Tankers reports net income of $8.2 million, equivalent to
earnings per share of $0.11 for the first quarter of 2011.
· In February 2011, BP Shipping Limited extended the charter for the
VLCC British Progress for one additional year.
· Independent Tankers recognizes a gain of $8.8 million in the first
quarter on the termination of a Golden State funding agreement.
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.
First Quarter 2011 Results
The Board of Independent Tankers announces net income of $8.2 million,
equivalent to earnings per share of $0.11 for the first quarter of 2011. This
compares with net income of $5.5 million, equivalent to earnings per share of
$0.07 for the preceding quarter. The increase is primarily due to a gain of $8.8
million in the Golden State group in the first quarter on the termination of a
funding agreement compared with a gain of $3.6 million in the Windsor group in
the fourth quarter on the termination of a funding agreement. This was partially
offset by reduced earnings from Antares Voyager and Pioneer following the
termination of their bareboat charters on December 8, 2010 and January
10, 2011, respectively, at which times the vessels were redelivered to the
Company.
The Ulriken (former Antares Voyager) did not commence trading in the spot market
until January 2011 and the average daily time charter equivalent ("TCE") earned
in the first quarter thereafter was $22,600. The TCE for the Pioneer in the
first quarter was $7,800 reflecting the poor market and the number of waiting
days in the quarter. The average TCE for these vessels in the first quarter was
$15,000. Operating costs of $1.5 million in the first quarter relate to Ulriken
and Pioneer. The average daily bareboat rate earned in the first quarter by the
Company's VLCCs was approximately $23,300 compared with approximately $23,600 in
the preceding quarter.
Interest income for the quarter decreased by $0.5 million to $2.1 million mainly
due to the termination of the Windsor funding arrangement which took effect in
January and the resulting transfer of cash to lower interest bearing deposits.
Interest expense for the quarter was $7.4 million compared with $7.5 million in
the preceding quarter. At March 31, 2011, all of the Company's bond debt of
$295.9 million is at fixed interest rates ranging from 7.84% to 8.52%.
Cash and cash equivalents decreased by $0.9 million in the quarter. The Company
used cash of $6.6 million for operating activities and repaid debt of $7.4
million. Restricted cash and investments increased by $13.2 million in the
quarter mainly due to the $8.8 million gain on the termination of the Golden
State funding agreement and charterhire receipts offset by loan and interest
repayments and funding contributions towards the operating costs of Ulriken and
Pioneer.
In May 2011, the Company has average total cash cost breakeven rates for the
remaining part of 2011 for its two spot traded VLCCs of approximately $32,400
per day and $19,200 for its four bareboat chartered vessels per day.
Chartering Summary
In February 2011, BP extended the charter for the VLCC British Progress for one
additional year. As a result, the vessel will trade on a market rate with a
minimum of $20,000 per day from February 2, 2011 until February 2, 2013.
Other Matters
On April 4, 2011, the Company was notified that the lease for the VLCC British
Pride will be terminated on July 15, 2011. The outstanding lease obligation will
be settled in full using restricted cash. At March 31, 2011 the lease obligation
was $70.4 million. The vessel will then be sold to Holyrood Petro Limited, a
currently dormant subsidiary of the Company, which will simultaneously enter
into a lease with Holyrood Shipping Plc. Holyrood Petro Limited will, therefore,
own the vessel subsequent to the termination. The termination will be cash
neutral for the Company.
74,825,166 ordinary shares were outstanding as of March 31, 2011, and the
weighted average number of shares outstanding for the first 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 first quarter of 2011 was WS 58; equivalent to
$20,200/day; representing an increase of approximately WS 0.3 points from the
fourth quarter of 2010 and a decrease of WS 31 points from the first quarter of
2010.
The market rate for a Suezmax trading on a standard 'TD5' voyage between West
Africa and Philadelphia in the first quarter of 2011 was WS 82; equivalent to
about $19,800/day compared to approximately $21,700/day in the fourth quarter of
2010, representing a decrease of about WS 32 points from the fourth quarter of
2010 and a decrease of WS 11 points from the first quarter of 2010.
Bunkers at Fujairah averaged $600/mt in the first quarter of 2011 compared to
$488/mt in the fourth quarter of 2010; an increase of approximately $112/mt.
Bunker prices varied between a low of $517/mt at the beginning of January and a
high of $674/mt at the end of February. On May 23, 2011, the quoted bunker price
in Fujairah was 624.5/mt.
Philadelphia bunkers averaged $604/mt in the first quarter, which was an
increase of $101/mt from the fourth quarter of 2010. Bunker prices varied
between a low of $525/mt at the beginning of January and a high of $680/mt at
the end of March. On May 23( ), 2011, the quoted bunker price in Philadelphia
was 639.5/mt.
The International Energy Agency's ("IEA") May 2011 report stated an average OPEC
oil production, including Iraq, of 29.7 million barrels per day (mb/d) during
the first quarter of the year. This was an increase of 210,000 barrels per day
compared to the fourth quarter of 2010 and an increase of 630,000 barrels per
day compared to the first quarter of 2010.
IEA further estimates that world oil demand averaged 88.4 mb/d in the first
quarter of 2011, representing a decrease of 1.0 mb/d compared to the fourth
quarter of 2010, and an increase of approximately 1.9 mb/d from the first
quarter of 2010. Additionally, the IEA estimates that world oil demand will
average approximately 89.24 mb/d in 2011, representing an increase of 1.5
percent or approximately 1.3 mb/d from 2010.
The VLCC fleet totalled 565 vessels at the end of the first quarter of 2011, up
from 548 vessels at the end of the previous quarter. 17 VLCCs were delivered
during the quarter versus an estimated 25 at the beginning of the year. The
orderbook counted 167 vessels at the end of the first quarter, down from 184
orders from the previous quarter. No new orders were placed during the quarter
and the current orderbook represents about 30 percent of the VLCC fleet. During
the quarter no vessels were removed from the trading fleet and according to
Fearnleys the single hull fleet still stands at 43 vessels.
The Suezmax fleet totalled 420 vessels at the end of the first quarter, up from
410 vessels at the end of the previous quarter. 11 vessels were delivered during
the quarter versus an estimated 23 at the beginning of the year. The orderbook
counted 135 vessels at the end of the quarter, down from 146 vessels at the end
of the previous quarter. No new orders were placed during the quarter and the
current orderbook now represents 32 percent of the total fleet. During the
quarter one vessel was removed from the trading fleet and according to Fearnleys
the single hull fleet now stands at 13 vessels.
Strategy and Outlook
The Company's strategy is mainly concentrated around chartering out the vessels
on long term charters to reputable oil companies and for the time being BP and
Chevron. The Company's charter coverage for its six double hull VLCCs is 67
percent for the remaining part of 2011 and 52 percent in 2012, if the charters
are not extended. The charter coverage for the three double hull Suezmax tankers
is 100 percent until 2015.
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 Pioneer and Ulriken, the
Company is exposed to market fluctuations for these vessels until they are sold.
It is difficult to predict the outcome for Pioneer due to the bondholders'
rejection of the proposals in the consent solicitations. Frontline, as manager,
is obligated to find potential buyers for the vessel subject to a certain price
requirement and 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, which meet
the requirements of the indentures. Even if the broker valuation of Pioneer is
higher than the outstanding debt on the vessel there are no assurances that a
forced sale of Pioneer in the present market can be achieved at levels higher or
equal to the outstanding debt on the vessel. The same uncertainty is applicable
for Ulriken, however the bondholders have pre approved the sale of the vessel,
subject to certain price requirements. Both vessels are presently trading in the
spot market and are being marketed for sale.
The Company will continue to operate with low cash breakeven rates and financing
through the US bond market with maturities from 2015 to 2021. The combination of
fixed bareboat charters and floating market rates for the four VLCCs in the
years ahead and the fact that all the vessels are financed creates a solid
platform for the Company going forward. That said, the uncertainty around a
potential sale or charter to anon investment grade counterparty for Ulriken and
Pioneer, increases the risk of the Company and might have negative influence on
the Company's future profit and credit profile. A recovery in the global tanker
market will strongly improve this situation.
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
May 24, 2011
Questions should be directed to:
Bengt Neteland: Vice President Finance, Frontline Management AS
+47 23 11 40 37 or +47 924 99 386
WEBSITE: WWW.ITCL.BM
1st quarter 2011 results:
http://hugin.info/138953/R/1518551/455056.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
[HUG#1518551]
Unternehmensinformation / Kurzprofil:
Datum: 25.05.2011 - 08:06 Uhr
Sprache: Deutsch
News-ID 54974
Anzahl Zeichen: 14866
contact information:
Town:
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Kategorie:
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