ITCL - Second Quarter and Six Months 2011 Results
(Thomson Reuters ONE) -
Highlights
* Independent Tankers reports a net loss of $0.05 million, equivalent to a
loss per share of $0.001 for the second quarter of 2011.
* Independent Tankers reports net income of $8.1 million, equivalent to
earnings per share of $0.11, for the six months ended June 30, 2011.
* In July 2011, BP Shipping Limited extended the bareboat charters for British
Pride and British Purpose until July 2013.
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.
Second Quarter and Six Months 2011 Results
The Board of Independent Tankers announces a net loss of $0.05 million,
equivalent to a loss per share of $0.001 for the second quarter of 2011. This
compares with net income of $8.2 million, equivalent to earnings per share of
$0.11 for the preceding quarter. The decrease is primarily due to the gain of
$8.8 million that was recognized in the first quarter on the termination of a
funding agreement in the Golden State group.
The Ulriken (formerly Antares Voyager) and the Pioneer continued to trade in the
spot market and the average daily time charter equivalents ("TCEs") earned in
the second quarter were $23,500 and $16,400, respectively. The average daily
bareboat rate earned in the second quarter by the Company's VLCCs was $23,300,
which was the same as the preceding quarter.
Interest income for the quarter decreased by $0.6 million to $1.5 million mainly
due to the termination of the Golden State funding agreement in March, resulting
in the transfer of cash to lower interest bearing deposit accounts. Interest
expense of $7.4 million for the second quarter was the same as the prior
quarter. At June 30, 2011, all of the Company's bond debt of $295.9 million is
at fixed interest rates ranging from 7.84% to 8.52%.
In August 2011, the Company has average total cash cost breakeven rates for the
remaining part of 2011 for its two spot traded VLCCs of $32,400 per day and
$19,200 per day for the four bareboat vessels.
Chartering Summary
In July 2011, BP extended the bareboat charters for the VLCCs British Purpose
and British Pride for one additional year. As a result, the British Purpose will
trade on a market rate with a minimum bareboat rate of $20,000 per day from July
15, 2011 until July 14, 2013. The British Pride traded on a bareboat rate of
$24,895 per day until the fixed period ended on July 30, 2011 and will trade on
a market rate with a minimum bareboat rate of $20,000 per day until July
30, 2013.
Other Matters
On July 15, 2011, the UK tax lease arrangement between Holyrood Shipping Plc and
Commerzbank Leasing for the VLCC British Pride was terminated and the
outstanding lease obligation was settled in full using restricted cash. At June
30, 2011 the lease obligation was $70.3 million. The termination was cash
neutral for the Company. The vessel was then sold to Holyrood Petro Limited, a
previously dormant subsidiary of the Company, which simultaneously entered into
a lease with Holyrood Shipping Plc.
74,825,166 ordinary shares were outstanding as of June 30, 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 second quarter of 2011 was WS 53; equivalent to
$8,000/day; representing a decrease of approximately WS 5.5 points from the
first quarter of 2011 and a decrease of WS 35 points from the second quarter of
2010. Present market indications are approximately $9,000 to 10,000/day in the
third quarter of 2011.
The market rate for a Suezmax trading on a standard 'TD5' voyage between West
Africa and Philadelphia in the second quarter of 2011 was WS 77; equivalent to
approximately $13,500/day compared to approximately $18,200/day in the first
quarter of 2011, representing a decrease of approximately WS 6 points from the
first quarter of 2011 and a decrease of WS 37 points from the second quarter of
2010. Present market indications are approximately $7,000/day in the third
quarter of 2011.
Bunkers at Fujairah averaged $657/mt in the second quarter of 2011 compared to
$600/mt in the first quarter of 2011. Bunker prices varied between a low of
$611/mt at the beginning of May and a high of $686/mt on the 10th of April. On
August 24, 2011, the quoted bunker price in Fujairah was 661/mt.
Philadelphia bunkers averaged $681/mt in the second quarter, which was an
increase of $77/mt from the first quarter of 2011. Bunker prices varied between
a low of $566/mt mid May and a high of $720/mt at the beginning of April. On
August 24, 2011, the quoted bunker price in Philadelphia was 672/mt.
The VLCC fleet totalled 573 vessels at the end of the second quarter of 2011, up
from 561 vessels at the end of the previous quarter. 15 VLCCs were delivered
during the quarter versus an estimated 18 at the beginning of the year. The
orderbook counted 149 vessels at the end of the second quarter, down from 164
orders from the previous quarter. Three new orders were placed during the
quarter, whilst three contracts were cancelled, and the current orderbook
represents approximately 27 percent of the VLCC fleet. During the quarter three
vessels were removed from the trading fleet and according to Fearnleys the
single hull fleet stands at 35 vessels.
The Suezmax fleet totalled 430 vessels at the end of the second quarter, up from
420 vessels at the end of the previous quarter. 10 vessels were delivered during
the quarter versus an estimated 13 at the beginning of the year. The orderbook
counted 126 vessels at the end of the quarter, down from 131 vessels at the end
of the previous quarter. Six new orders were placed whilst one was cancelled
during the quarter and the current orderbook now represents 29 percent of the
total fleet. No vessels were removed from the trading fleet and according to
Fearnleys the single hull fleet now stands at 13 vessels.
The International Energy Agency's ("IEA") August 2011 report stated an average
OPEC oil production, including Iraq, of 29.3 million barrels per day (mb/d)
during the second quarter of the year. This was a decrease of 630,000 barrels
per day compared to the first quarter of 2011 and an increase of 330,000 barrels
per day compared to the second quarter of 2010.
IEA further estimates in their August 2011 report that the global oil demand
decreased by 1.0 mb/d or 1.1 percent in the second quarter of 2011 compared to
the first quarter of 2011. At the same time the tanker market experienced a
growth in fleet supply in the second quarter of 2011 due to a high number of
newbuilding deliveries despite fewer actual deliveries in the second quarter of
2011 than anticipated, with 17 percent slippage in the VLCC segment and 23
percent in the Suezmax segment. Henceforth the weak tanker market experienced in
the second half of 2010 also continued in the first half of 2011 and so far into
the third quarter of 2011.
The decision by the IEA to temporarily release 60 million barrels from global
strategic petroleum reserves proved negative for tanker demand and we noticed a
decrease in long-haul imports to the US. Further, the current international
situation has delayed the economic recovery and future oil demand might suffer.
The newbuilding orderbook at the end of the second quarter 2011 includes a high
number of expected vessel deliveries in 2011 and 2012. However, the actual
number of deliveries is likely to be lower due to the expected delays, slippage
and cancellations of newbuilding orders going forward.
The International Monetary Fund forecasts world growth to rise by approximately
4.3 percent and 4.5 percent in 2011 and 2012, respectively and the IEA projects
an increase in world's oil consumption in 2011 by 1.2 mb/d compared to 2010 and
in 2012 by 1.6 mb/d compared to 2011. This is not enough to absorb the
newbuilding orderbook, but will help mitigate.
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, 67 percent in 2012 and 23 percent in
2013 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 spot 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 will be exposed to market fluctuations for these vessels. Frontline, as
manager, is obligated to find potential buyers for the vessel subject to certain
price requirements 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, time or spot charters for the
vessels which meet the requirements of the indentures. The broker valuations
received for Pioneer at June 30, 2011 indicate that the market value of the
vessel is slightly lower than the net debt on the vessel. The other three VLCCs
in the Windsor Petroleum bond structure and the two VLCCs in the Golden State
Petroleum bond structure had estimated market values that were slightly higher
or higher than the net debt of the vessels at June 30, 2011. Due to the lack of
liquidity in the secondhand sale and purchase market for VLCCs there is
uncertainty to what extent the estimated market values can be achieved through
actual transactions. There is also uncertainty linked to what extent the
negative development in the tanker market since June 30 has influenced values.
During the third quarter of 2011, the Windsor Petroleum bond structure was
downgraded from B3 to Caa1 by Moody's Investors Service and from BB+ to BB- by
Standard and Poor's Rating Services. The reason for the downgrading was the
negative development in the tanker market.
The Company will continue to operate with low cash cost breakeven rates and
financing through the US bond market with maturities from 2015 to 2021. The
fixed minimum bareboat rates of $20,000 per day for three of the VLCCs and the
fixed bareboat contract of Phoenix Voyager in addition to the long term
financing creates a solid foundation for the Company going forward. However, the
uncertainty around a potential sale or, if not achievable, a charter to a non
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.
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 full report is available for download in the link enclosed and from the
Company's website www.itcl.bm.
The Board of Directors
Independent Tankers Corporation Limited
Hamilton, Bermuda
August 25, 2011
Questions should be directed to:
Magnus Vaaler: Vice President Finance, Frontline Management AS
+47 23 11 40 21
2nd quarter 2011 results:
http://hugin.info/138953/R/1541713/471757.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#1541713]
Unternehmensinformation / Kurzprofil:
Datum: 26.08.2011 - 17:08 Uhr
Sprache: Deutsch
News-ID 59739
Anzahl Zeichen: 15791
contact information:
Town:
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Kategorie:
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