ITCL - Third Quarter and Nine Months 2011 Results
(Thomson Reuters ONE) -
Highlights
· Independent Tankers reports a net loss of $2.3 million, equivalent to
a loss per share of $0.03 for the third quarter of 2011.
· Independent Tankers reports net income of $5.8 million, equivalent to
earnings per share of $0.08, for the nine months ended September 30, 2011.
· The UK tax leasing arrangement for the VLCC British Pride was
terminated and the fixed period charter ended in July 2011.
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 to major oil companies and two vessels
operating in the spot market. Independent Tankers owns six VLCC's and three
Suezmax tankers. All vessels are financed through bonds in the US market. The
main shareholder is Frontline Ltd. ("Frontline") with an ownership of
approximately 83 percent.
Third Quarter and Nine Months 2011 Results
The Board of Independent Tankers announces a net loss of $2.3 million,
equivalent to a loss per share of $0.03 for the third quarter of 2011. This
compares with a net loss of $0.05 million, equivalent to a loss per share of
$0.001 for the preceding quarter. The decrease in net income is primarily
attributable to weaker results for the two vessels trading in the spot market.
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 third quarter was $5,200 and $10,300, respectively. The average daily
bareboat rate earned in the third quarter by the Company's VLCCs was $22,600,
which represents a small decrease compared with the preceding quarter due to a
rate decrease on the VLCC British Pride following the end of the fixed period
charter in July.
Interest income for the quarter decreased by $1.3 million compared to the
previous quarter to $0.2 million. This is primarily attributable to the
termination of the UK tax leasing arrangement for the VLCC British Pride on July
15, 2011. Interest expense in the third quarter also decreased for the same
reason. At September 30, 2011, all of the Company's bond debt of $288.1 million
is at fixed interest rates ranging from 7.84% to 8.52%.
In November 2011, the average total cash cost breakeven rates for the remaining
part of 2011 is $32,400 per day for the two spot trading VLCCs 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
Dresdner Kleinwort 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 and the termination was cash
neutral for the Company. The vessel was 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 September 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 third quarter of 2011 was WS 47, representing a
decrease of about WS 6 points from the second quarter of 2011 and a decrease of
WS 5.5 points from the third quarter of 2010. Present market indications are
approximately $12,000/day in the fourth quarter of 2011.
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 on the 1st of August. On November 18th, 2011, the quoted bunker price
in Fujairah was 677/mt.
Philadelphia bunkers averaged $675/mt in the third quarter, which was a decrease
of $6/mt from the second quarter of 2011. Bunker prices varied between a low of
$640.5/mt mid August and a high of $705.5/mt at the end of July. On November
18th, 2011, the quoted bunker price in Philadelphia was 658/mt.
The International Energy Agency's ("IEA") November 2011 report stated an average
OPEC oil production, including Iraq, of 30 million barrels per day (mb/d) during
the third quarter of the year. This was an increase of 540,000 barrels per day
compared to the second quarter of 2011 and an increase of 720,000 barrels per
day compared to the third quarter of 2010.
IEA further estimates that world oil demand averaged 89.6 mb/d in the third
quarter of 2011, representing an increase of approximately 1.7 mb/d compared to
the previous quarter, and an increase of approximately 540,000 barrels per day
from the third quarter of 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 orderbook represents about 22 percent
of the VLCC fleet. According to Fearnleys the single hull fleet stands at 35
vessels.
The newbuilding orderbook at the end of the third quarter 2011 includes a high
number of expected vessel deliveries remaining in 2011 and in 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
4.0 percent in 2012 compared with 2011 and the IEA projects an increase in
world's oil consumption in 2012 by 1.3 mb/d and 1.5 percent 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 vessels on
long term charters to reputable oil companies, 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 seek 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 the vessels at September 30, 2011 indicate
that the market values of the Windsor vessels are lower than the net debt of the
vessels. The two VLCCs in the Golden State Petroleum bond structure had
estimated market values that were higher than the net debt of the vessels.
Whether the estimated market values can be achieved through actual transactions
is highly uncertain due to the lack of liquidity in the secondhand sale and
purchase market for VLCCs. There is also uncertainty to what extent the negative
developments in the tanker market since September 30 have 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, supports the debt of the Company until 2013 if the contracts are not
extended. However, with current market rates being below operating expense
levels for the two spot trading vessels Ulriken and Pioneer, the company will
have to draw further on the restricted cash reserves to operate these vessels.
The uncertainties around a potential sale or a charter to a non-investment grade
counterparty for Ulriken and Pioneer, increase the risk of the Company and might
have a 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
November 21, 2011
Questions should be directed to:
Magnus Vaaler: Vice President Finance, Frontline Management AS
+47 23 11 40 21
WEBSITE:WWW.ITCL.BM
3rd quarter 2011 results:
http://hugin.info/138953/R/1565597/485934.pdf
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(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#1565597]
Unternehmensinformation / Kurzprofil:
Datum: 22.11.2011 - 08:10 Uhr
Sprache: Deutsch
News-ID 90004
Anzahl Zeichen: 13734
contact information:
Town:
0112 Oslo
Kategorie:
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