FSL Trust Improves Operational Profile

Press Release
Monday, October 29, 2012

Deploys all redelivered vessels on longer term employment.

• Revenue stability enhanced; two product tankers time chartered to Petrobras and three chemical tankers deployed in the ‘Nordic Siva’ pool

• Cash reserves rose to US$33.2 million; improving resilience against uncertainties in shipping market

• Revenue continues to be at risk


FSL Trust Management Pte. Ltd. (“FSLTM”), as trustee-manager of First Ship Lease Trust (“FSL Trust” or the “Trust”), has announced  the financial results of FSL Trust for the third quarter ended 30 September 2012 (“3QFY12”). In 3QFY12, FSL Trust successfully delivered its three chemical tankers into the ‘Nordic Siva’ pool as well as a second product tanker, FSL Hamburg, to Petròleo Brasileiro S.A. (“Petrobras”) for the commencement of her three-year time charter. Prior to their redeployment, these vessels were trading in the spot market where earnings were more volatile.

Revenue declined 6.5% to US$26.7 million against the same period last year. However, after deducting voyage and vessel operating expenses, revenue on a bareboat charter equivalent (“BBCE”) basis fell 5.6% year-on-year to US$22.4 million. The breakdown of revenue by charter types is as follows:-

                                                                                   3QFY12                3QFY11         Decrease
                                                                                   US$’000              US$’000              %

Rentals from vessels on bareboat charter       18,250                  23,592                 (22.6)
BBCE revenue of vessels in:-
- Time charter                                                          976                       -                             N.M.
- Pool                                                                        1,437                    -                             N.M.
- Spot                                                                        1,769                   172                        N.M.
Total bareboat charter/BBCE revenue               22,432                 23,764                 (5.6)

i) Bareboat Charter
Rentals from vessels on bareboat charter fell 22.6% year-on-year to US$18.3 million. This was mainly due to the payment default by the subsidiaries of PT Berlian Laju Tanker Tbk for three chemical tankers since February 2012 and the lower rentals from vessels leased to TORM A/S (“TORM”) as the leases were being restructured. Despite the lower rentals received in 3QFY12, the long-term bareboat charters continue to underpin the overall earnings of FSL Trust.

ii) Time Charter
From 16 May 2012, FSL Singapore entered the time charter with Petrobras and hence she enjoyed the full three months of time charter income. FSL Hamburg, however, entered a similar time charter with Petrobras on 23 August 2012. The gross daily time charter rate for each vessel is US$14,000. On a combined basis, these two vessels contributed BBCE revenue of US$1.0 million from their time charter employment during the quarter.

iii) Pool
The ‘Nordic Siva’ pool commenced deployment of the Trust’s chemical tankers, FSL New York and FSL Tokyo in July 2012 and the third chemical tanker, FSL London in August 2012. Collectively, these vessels generated net pool revenue of US$2.9 million. After deducting vessel operating expenses, these vessels earned BBCE revenue of US$1.4 million in 3QFY12.

iv) Spot
Total freight income of US$3.8 million was derived from the three chemical tankers before they entered the ‘Nordic Siva’ pool and from FSL Hamburg before she started her time charter with Petrobras. After deducting voyage and vessel operating expenses, these vessels generated BBCE revenue of US$1.8 million in 3QFY12. For the same period last year, only FSL Hamburg and FSL Singapore traded in the spot market and these vessels contributed BBCE revenue of US$172,000.
Other operating expenses declined 8.0% year-on-year to US$16.0 million. The lower expenditure was due mainly to lower depreciation from the three chemical tankers (-US$1.0million) and from the two vessels leased to TORM (-US$0.3 million), arising from the changes in the expected useful life and residual value of the vessels.
Consequently, FSL Trust achieved a marginal improvement of 1.0% in net operating income to US$6.5 million. After accounting for finance expenses and other non-operating items, the Trust reported a small loss of US$186,000 compared to a small profit of US$152,000 in the same quarter last year.
Net cash generated from operations declined 11.0% year-on-year to US$13.9 million and the Trust continued to pay its regular loan amortisation of US$11.0 million during the quarter. In line with the temporary loan covenant relaxation obtained in June 2012, no distributions have been declared. Cash and cash equivalents rose to US$33.2 million as at 30 September 2012 (US$30.8 million as at 30 June 2012).


Vessel Portfolio Profile
20 out of 25 vessels in the Trust’s portfolio remain employed on long-term bareboat charters whilst two vessels are employed on time charters. As at 30 September 2012, these 22 vessels have a dollar-weighted average remaining lease period of approximately five years1. Including the remaining three chemical tankers employed in the pool, the combined portfolio of 25 vessels has a dollar-weighted average age of approximately seven years.
As an update to the Trust’s announcement relating to its TORM charters made on 3 October 20122, FSLTM would like to add that subject to technical completion of TORM’s restructuring agreement, FSL Trust will receive an equity stake amounting to approximately 2.5% in the enlarged share capital of TORM in return for permanently amending the terms on its two charter contracts.

Mr. Philip Clausius, Chief Executive Officer of FSLTM said: “With the successful redeployment of our two product tankers and three chemical tankers from spot market to time charter and pool employment, we can expect more stable earnings from our vessel portfolio. Together with the

loan covenant relaxation previously obtained from our lenders, this improves our operational profile and should stand us in good stead to ride out the challenges ahead.
However, some of our lessees continue to be under pressure and there is possibility of further downside risks. We will stay vigilant and continue to manage our vessel portfolio responsibly to secure a sustainable future for the Trust.”

Conference Call for 3QFY12 Results
FSLTM will host a conference call for all registered participants on Tuesday, 30 October 2012 at 10.00 am (Singapore time) to discuss the results. An audio recording of the conference call will be available on FSL Trust’s website at www.FSLTrust.com from 12.00pm (Singapore time) on Wednesday, 31 October 2012.

1 Excluding extension periods and early buy-out options.
2 Press release: “FSL Trust provides update on TORM charters”, dated 3 October 2012.

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Chevron Suffers Loss, Plans Job Cuts

Chevron Corp. reported a first-quarter loss as slumping oil prices continued to drag down revenue. The company said that it is "on target" to lay off a total of 8000 workers by the end of 2016,

China COSCO to be First through the Expanded Panama Canal

China COSCO Shipping has won the draw for its container vessel Andronikos to make the ceremonial first transit through the Expanded Panama Canal during the waterway’s inauguration on Sunday, June 26.

Sellick Equipment to Open New Facility

On April, 20, 2016, at the young age of 97 years, Walter Sellick along with sons Howard Sellick - President, David Sellick - Vice President and grandson Colin Sellick - Systems Manager,


Great Lakes Inks M.E., N.C. Coastal Protection Project Deals

Great Lakes Announces $55 Million in Subcontract Work in the Middle East and Award of $38 Million for a Domestic Coastal Protection Project Great Lakes Dredge

Olympic Subsea Vessel Bags Contract

Olympic Shipping has secured a contract for Olympic Delta, an inspection, maintenance and repair (IMR) vessel, with an international client  to work on a renewable energy project.

Asia Tankers-VLCCs Rates Ease as Tanker Jams Fade

Port congestion eases at Basra and Chinese ports; tanker demand set to expand on lower oil prices. Freight rates for very large crude carriers (VLCCs), hurt by slower-than-usual release of cargo,

Tanker Trends

Lerwick Harbor sees Seasonal Boost

The opening of the offshore season in northern waters has seen specialist oil industry vessels return to Lerwick Harbor during April to support subsea development projects.

Floating Products Storage in Focus

For much of 2015, talk of floating storage was dominated by speculation that the contango in crude futures might support crude floating storage, says Gibson Tanker Report.

Russia Diesel Exports from Primorsk to Rise in May

Russia is set to export 1.256 million tonnes of ultra-low sulphur diesel from the Baltic Sea port of Primorsk in May, slightly up from 1.209 million tonnes in April, trading sources said on Friday.


ExxonMobil 1Q Profits Plunge 63%

Highlights   * Earnings of $1.8 billion decreased 63 percent from the first quarter of 2015.   * Earnings per share were $0.43 assuming dilution.   * Cash

Shipping, Key Ingredient of EU’s Africa Agenda

The African economy has become one of the most promising global growth markets. Shipping is taking care of the largest part of international trade and in Africa

Ocean Economy Set to Double in Size by 2030

The world’s oceans must be managed well to ensure the potential of an “ocean economy” that was worth US $ 1.5 trillion in 2010.   "Calculations based on the


Blacklisted Tanker Returns to Libya's Zawiya Port

A tanker that Libya's rival eastern government had been using to try to export oil in defiance of the Western-backed administration in Tripoli returned to the country on Saturday,

Lerwick Harbor sees Seasonal Boost

The opening of the offshore season in northern waters has seen specialist oil industry vessels return to Lerwick Harbor during April to support subsea development projects.

Cory Brothers Opens in Amsterdam Port

Cory Brothers Shipping Agency is delighted to announce the opening of Cory Brothers (The Netherlands) BV, in the port of Amsterdam, servicing the ARA range. The


KICT Welcomes MSC MEL 1 Service First Call

MSC Lana Voy-JA618R made its inaugural call at Karachi International Container Terminal (KICT), marking the launch of a new Middle East Loop 1 (MEL 1) Service.

Symphony Sun’ Launched in Leer

On Friday the 29th of April, Nb. 420 was launched in Leer. She was christened ‘Symphony Sun’ and is the fourth vessel in a series of 6 that will be delivered to Symphony Shipping.

ACR to Debut Pathfinder PRO SART at OTC

An important addition to any commercial vessel’s survival gear kit, the Pathfinder PRO SART is introduced by ACR Electronics, Inc. at this year’s OTC. The new search


Cory Brothers Opens in Amsterdam Port

Cory Brothers Shipping Agency is delighted to announce the opening of Cory Brothers (The Netherlands) BV, in the port of Amsterdam, servicing the ARA range. The

Shipping Industry Flying On The Dragon’s Back

As the many Greek players in the shipping industry know well, the legend of Icarus tells us the dangers of flying too high. Merchant vessel earnings eventually

Panama Canal Dismisses ITF Claims

The Panama Canal has dismisses claims by the International Transport Workers’ Federation (ITF) that questions industry standards and the operation of the Expanded Panama Canal’s new locks.

Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1833 sec (5 req/sec)