ITCL - Third Quarter 2009 Results
(Thomson Reuters ONE) - Highlights* Independent Tankers reports net income of $4.3 million, equivalent to earnings per share of $0.06, for the third quarter of 2009.* Independent Tankers reports net income of $11.4 million, equivalent to earnings per share of $0.15, for the nine months ended September 30, 2009.* The UK tax lease for the VLCC British Progress will be terminated in the first quarter of 2010.IntroductionIndependent 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-countermarket since March 7, 2008. Independent Tankers' business is mainlyconcentrated on the ownership and operation of crude oil tankers onlong term bareboat contracts, which include certain cancellationoptions to major oil companies. Independent Tankers owns or leases insix VLCCs and four Suezmax tankers. All vessels are financed throughbonds in the US market and some of the vessels are also subject tofinancial lease arrangements. The main shareholder is Frontline Ltd.("Frontline") with an ownership of approximately 83 percent.Third Quarter and Nine Month Results 2009The Board of Independent Tankers announces net income of $4.3million, equivalent to earnings per share of $0.06, for the thirdquarter of 2009. This compares with net income of $3.2 million,equivalent to earnings per share of $0.04, for the second quarter of2009. The main reasons for this increase are a reduction indepreciation expense of $0.5 million following the upward revision ofthe estimated residual values of the six VLCCs and foreign exchangemovements.The average daily bareboat rates earned in the third quarter by theCompany's VLCCs and the Suezmax tanker Front Voyager wereapproximately $25,100 and $7,800, respectively, compared withapproximately $25,400 and $7,900, respectively, in the precedingquarter. The decrease is explained by fluctuations in days betweenthe quarters.Net interest expense was $5.5 million (second quarter 2009: $5.3million). At September 30, 2009, all of the Company's bond debt of$325.8 million is at fixed interest rates ranging from 6.68% to8.52%.The Company has reclassified some of its restricted cash balances tolong-term. These balances relate to the restricted cash that aresegregated for the settlement of long-term lease obligations. Theamount reclassified as of September 30, 2008 to conform to thecurrent year presentation was $226.9 million.For the nine months ended September 30, 2009 the Company announcesnet income of $11.4 million, equivalent to earnings per share of$0.15 (2008 comparable nine months $10.0 million, equivalent toearnings per share of $0.13). Net interest expense was $16.0 million(2008 comparable nine months: $16.7 million).In November 2009, the Company has an average cash breakeven rate forits VLCCs and Suezmax tanker of approximately $19,100 and $4,200 pervessel per day, respectively.Charter DevelopmentThe VLCC British Pioneer is currently on a market related charter toBP Shipping Limited ("BP") under which the Company's ship owningsubsidiary receives the greater of $20,000 per day or a spot marketrate. The market related rate, while calculated quarterly, iscumulative on a four year basis or shorter if BP terminates thecharter earlier. The Company has not accrued any market related hireas of September 30, 2009.Other MattersIn September 2009, Dresdner Kleinwort Leasing gave notice oftermination for the UK tax lease for the VLCC British Progress. Theleasing agreement will be terminated effective January 15, 2010. AtSeptember 30, 2009 the obligation under the lease was $69.9 millionand the termination will be cash neutral for the Company. The Companywill acquire the vessel concurrent with the lease termination and theexisting bareboat to BP will remain in place.74,825,166 ordinary shares were outstanding as of September 30, 2009,and the weighted average number of shares outstanding for the quarterwas also 74,825,166.The MarketThe average market rate for VLCCs from MEG to Japan in the thirdquarter of 2009 was approximately WS 36 or $15,600/day. The secondquarter returned $20,600/day at the same WS rate, albeit with an$80/mt lower fuel price. The average rate for Suezmaxes from WAF toUSAC in the third quarter of 2009 was approximately WS 52.5 or$13,700 per day compared to approximately WS 59 or $20,000 per day inthe second quarter of 2009.Bunkers at Fujairah averaged approximately $426/mt in the thirdquarter compared to $345/mt in the second quarter of 2009, with ahigh of $459/mt at the end of August and a low of $378/mt in themiddle of July. On November 25, 2009 the quoted bunkers price inFujairah was $460/mt.The International Energy Agency ("IEA") reported in November 2009 anaverage OPEC oil production, including Iraq, of 28.8 million barrelsper day during the third quarter of the year - an increase of 320.000barrels per day compared to the second quarter of 2009. At the lastOPEC conference on September 10 it was agreed to keep the currentproduction levels unchanged. The next OPEC meeting is scheduled totake place on December 22, 2009.IEA further estimates that world oil demand averaged 85.1 millionbarrels per day in the third quarter of 2009, an increase ofapproximately 0.9 million barrels per day compared to the secondquarter of the year. IEA predicts that the average demand for 2009 intotal will be 84.8 million barrels per day, a 1.7 percent declinefrom 2008. Additionally, the IEA estimates that the demand willincrease by 1.7 percent in 2010 to 86.2 million barrels per day.The VLCC fleet totalled 524 vessels at the end of the third quarterwith nine deliveries during the quarter. Throughout 2009 it isestimated that 61 deliveries will take place including 48 made sofar. The orderbook counted 188 vessels at the end of the thirdquarter, down from 197 vessels after the second quarter of 2009. Anew order for 12 VLCCs was reported during the quarter, however thisis not yet confirmed. The current orderbook represents approximately35 percent of the VLCC fleet. During the quarter, there were twodeletions from the trading fleet with five being sold for demolitionand six for conversion purposes. According to Fearnleys, the singlehull fleet now stands at 89 vessels.The Suezmax fleet totalled 381 vessels at the end of the quarter,with 11 deliveries taking place during the quarter. Throughout 2009it is estimated that 57 deliveries will take place including 38 madeso far. The orderbook counted 127 vessels at the end of the quarter,down from 138 vessels at the end of the second quarter and nowrepresents 32 percent of the total fleet. During the quarter, therewere two deletions from the trading fleet. According to Fearnleys,the single hull fleet stands at 33 vessels at the end of the quarter.Strategy and OutlookThe Company's strategy is mainly concentrated around long termcharters to reputable companies and for the time being BP, Chevronand Frontline. The Company's charter coverage for its six double hullVLCCs is 100 percent for the rest of 2009, 99 percent in 2010 and 24percent in 2011, if the charterers are not extended. For the onesingle hull and three double hull Suezmax tankers, the chartercoverage is 100 percent for the rest of 2009 and 81 percent in 2010.We are slowly building up our cash position at a comfortable pacefrom the Company's long term charters. The long term focus is onrestructuring the bond debt and UK leasing arrangements within theCompany.The Company has low cash breakeven rates and the vessels are financedthrough the US bond market with maturity from 2015 to 2021. Thecombination of fixed bareboat charters and floating market rates forthe six VLCCs in the years ahead and the fact that all the vesselsare financed creates a solid platform for the Company going forward.Forward Looking StatementsThis press release contains forward looking statements. Thesestatements are based upon various assumptions, many of which arebased, in turn, upon further assumptions, including the Company'smanagement's examination of historical operating trends. Although theCompany believes that these assumptions were reasonable when made,because assumptions are inherently subject to significantuncertainties and contingencies which are difficult or impossible topredict and are beyond its control, the Company cannot give assurancethat it will achieve or accomplish these expectations, beliefs orintentions.Important factors that, in the Company's view, could cause actualresults to differ materially from those discussed in this pressrelease include the strength of world economies and currencies,general market conditions including fluctuations in charter hirerates and vessel values, changes in demand in the tanker market as aresult of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in the Company's operatingexpenses including bunker prices, drydocking and insurance costs,changes in governmental rules and regulations or actions taken byregulatory authorities, potential liability from pending or futurelitigation, general domestic and international political conditions,potential disruption of shipping routes due to accidents or politicalevents, and other important factors described from time to time inthe reports filed by the Company with the Norwegian over-the-countermarket in Oslo.The full report is available in the link enclosed.The Board of DirectorsIndependent Tankers Corporation LimitedHamilton, BermudaNovember 26, 2009Questions should be directed to:Bengt Neteland: Vice President Finance, Frontline Management AS +47 23 11 40 37 or +47 924 99 386WEBSITE: WWW.ITCL.BMhttp://hugin.info/138953/R/1357531/330270.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 27.11.2009 - 08:10 Uhr
Sprache: Deutsch
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