VLCCF - Third Quarter 2011 Results
(Thomson Reuters ONE) -
HIGHLIGHTS
* Knightsbridge reports net income of $9.1 million and earnings per share of
$0.37 for the third quarter of 2011.
* Knightsbridge reports EBITDA of $16.2 million and EBITDA per share of $0.66
for the third quarter of 2011.
* Knightsbridge announces a cash dividend of $0.50 per share for the third
quarter of 2011.
* Knightsbridge reports net income of $24.9 million and earnings per share of
$1.02 for the nine months ended September 30, 2011.
THIRD QUARTER 2011 AND NINE MONTHS RESULTS
Knightsbridge Tankers Limited (the "Company" or "Knightsbridge") reports net
income of $9.1 million and earnings per share of $0.37 for the third quarter
compared to net income of $7.2 million and earnings per share of $0.30 for the
second quarter of 2011. Net income increased primarily due to no dry docking
costs in the third quarter compared with dry docking costs of $1.8 million for
the VLCC Hampstead in the second quarter. The average daily time charter
equivalents ("TCEs") earned by the Company's VLCCs, excluding bareboat charters,
and Capesize vessels were $25,300 and $36,800, respectively, compared with
$29,000 and $36,600 in the preceding quarter.
Cash and cash equivalents decreased by $4.3 million in the quarter. The Company
generated cash from operating activities of $8.8 million, used $0.9 million to
repay loan facilities and paid $12.2 million in dividends. While net income in
the third quarter increased compared with the second quarter, cash generated
from operations in the third quarter decreased primarily attributable to delayed
charterhire payments. In November 2011, the Company has an average cash
breakeven rate for the fourth quarter 2011 for its VLCCs, which are on time
charter and Capesize vessels of $20,100 and $8,500, respectively, per vessel per
day. The VLCC rate includes remaining dry docking payment for Hampstead. The
VLCCs which are on bare-boat charters have a cash break even rate of $4,200 per
vessel per day.
For the nine months ended September 30, 2011 the Company reports net income of
$24.9 million and earnings per share of $1.02. The average daily TCEs for the
Company's VLCCs, excluding bareboat charters, and Capesize vessels for the nine
months ended September 30, 2011 were $29,200 and $36,700 respectively.
THE TANKER MARKET
The market rate for a VLCC trading on a standard 'TD3' voyage between the
Arabian Gulf and Japan in the third quarter of 2011 was WS 47, representing a
decrease of approximately WS 6 points from the second quarter of 2011 and a
decrease of WS 5.5 points from the third quarter of 2010.
Bunkers at Fujairah averaged $664/mt in the third quarter of 2011 compared to
$657/mt in the second quarter of 2011; an increase of $7/mt. Bunker prices
varied between a low of $626.5/mt at the end of September and a high of
$699.5/mt in early August.
The International Energy Agency's ("IEA") October 2011 report stated an average
OPEC oil production, including Iraq, of 30.09 million barrels per day (mb/d)
during the third quarter of the year. This was an increase of 650,000 barrels
per day compared to the second quarter of 2011 and an increase of 820,000
barrels per day compared to the third quarter of 2010.
IEA further estimates that world oil demand averaged 89.78 mb/d in the third
quarter of 2011, representing an increase of approximately 1.8 mb/d compared to
the previous quarter, and an increase of approximately 1.07 mb/d from the third
quarter of 2010. Additionally, the IEA estimates that world oil demand will
average approximately 89.23 mb/d in 2011, representing an increase of 1.1
percent or approximately 0.99 mb/d from 2010.
The VLCC fleet totalled 588 vessels at the end of the third quarter of 2011, up
from 574 vessels at the end of the previous quarter. 14 VLCCs were delivered
during the quarter. The orderbook counted 131 vessels at the end of the third
quarter, down from 143 orders from the previous quarter. Two new orders were
placed during the quarter, and the current order book represents about 22
percent of the VLCC fleet. According to Fearnleys, the single hull fleet stands
at 35 vessels.
THE DRY BULK MARKET
The third quarter of 2011 was yet another quarter which surpassed most analysts'
expectations. Given the large order book with record high deliveries both this
year and next, it has been difficult to imagine a demand scenario which was able
to cope with supply growth and maintain utilization at levels giving owners of
dry bulk tonnage decent returns.
Since the start of the dry bulk super cycle which lasted for five years from
2003, dependence on Chinese economic growth has increased at a steady pace. The
third quarter of 2011 was no exception with high Chinese import growth for both
iron ore and coal being the main reasons for the relatively strong performance
of dry bulk vessels. Average earnings for Capesize vessels were$17,000 per day
while a Panamax in comparison earned approximately $13,000 per day. Earnings for
the latter segment were stable throughout the quarter while Capesizes
experienced a steady rise from bleak levels.
Iron ore is the main commodity carried by Capesizes and China increased its
import by more than 17 percent compared to same quarter previous year. Coal
imports to China increased by almost 30 percent year-on-year. In addition, other
Asian countries contributed to the strong demand growth. Korea increased its
iron ore imports by more than 20 percent and the rebuilding of Japan after the
March 2011 earthquake and tsunami also contributed positively.
These high growth numbers alone are still not sufficient to explain a
utilization rate, which averaged 85 percent last quarter. Congestion remains as
a positive factor for owners and between six to eight percent of vessel capacity
was tied up in the third quarter.
Chinese coastal trade increased by 17 percent during the third quarter and more
than 300 million tons of dry bulk commodities was carried off the Chinese coast.
On an annual basis, this represents 20 million dwt capacity. We have not seen
the same focus on slow steaming in dry bulk as in other segments. However,
analysis shows that average speed of the sailing fleet has dropped by more than
two knots since 2008. This is not due to an effort to improve market conditions
but rather a function of high bunker prices and optimizing earnings.
Still, the focus has to be on the order book. So far this year approximately
205 vessels in the Capesize segment have been delivered, but at the same time
almost 70 vessels of the same size have been scrapped. Delivery ratio compared
to the official order book remains below 70 percent.
Most analysts agree that the dry bulk market does not have a demand problem.
Iron ore and coal imports to China and India are expected to grow at a steady
pace over the next 5 years. A lot of new iron ore capacity will enter the market
from 2013 onwards, which could put a downward pressure on international iron
prices. This should support the freight market due to expensive, low quality
Chinese iron ore production. However, the order book for the remainder of this
year and 2012 is still a major concern and is the main reason why the forward
freight assessment (FFA) is in backwardation. Despite the positive development
in the freight market, asset values dropped further during third quarter. A five
year old Capesize was priced at $39 million while a newbuilding resale was
priced at approximately $50 million. There is a lot of uncertainty related to
asset values going forward, but we observe that more forecasters state that they
see limited downside.
CORPORATE AND OUTLOOK
The Company's VLCC and Capesize fleet is fixed on time and bareboat charters
expiring between 2012 and 2016, except for the VLCC Kensington which is employed
in the spot market.
In spite of falling vessel values, the Company's position is satisfactory as
regards loan to value ratios. The Company's charter portfolio and its low
gearing reduces risk exposure.
It is the Company's intention to grow the fleet, as stated previously. The
negative developments in asset values, however have made it appropriate to delay
new investments. The Board believes it may now be time to pursue investment
opportunities and to take advantage of the current weakness in the market to
develop new projects with the aim to secure long term dividend capacity. The
Company is well positioned for growth with a conservative balance sheet, cash at
hand and availability of a $75 million revolving credit facility.
On November 7, 2011, the Board declared a dividend of $0.50 per share. The
record date for the dividend is November 18, 2011, the ex dividend date is
November 16, 2011 and the dividend will be paid on or around December 2, 2011.
24,425,699 ordinary shares were outstanding as of September 30, 2011, 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
November 7, 2011
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
3rd Quarter 2011 Results:
http://hugin.info/132879/R/1561899/483500.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#1561899]
Unternehmensinformation / Kurzprofil:
Datum: 08.11.2011 - 13:50 Uhr
Sprache: Deutsch
News-ID 85252
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contact information:
Town:
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Kategorie:
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