SFL - Second Quarter 2012 Results
Ship Finance International Limited (NYSE: SFL) - Earnings Release
Reports preliminary 2Q 2012 results and quarterly dividend of $0.39 per share
Hamilton, Bermuda, August 28, 2012. Ship Finance International Limited ("Ship
Finance" or the "Company") today announced its preliminary financial results for
the quarter ended June 30, 2012.
* The Board of Directors has declared a quarterly dividend of $0.39 per share.
* $16.3 million, or $0.21 per share, accumulated in cash sweep from Frontline.
* Fleet renewal continues with seven drybulk newbuildings delivered over the
last year and six older OBOs and VLCCs sold.
* Selected key financial data for the quarter compared to the previous
| | Three Months Ended |
| | |
| | Jun 30, 2012 Mar 31, 2012 |
| Charter revenues((1)) | $185m $186m |
| | |
| EBITDA((2)) | $151m $154m |
| | |
| Net income | $61m $39m |
| | |
| Earnings per share | $0.77 $0.49 |
| | |
| Dividend per share | $0.39 $0.39 |
Dividends and Results for the Quarter Ended June 30, 2012
The Board of Directors has declared a quarterly cash dividend of $0.39 per
share, and Ship Finance has now paid dividends for 34 consecutive quarters. The
dividend will be paid on or about September 28, 2012 to shareholders of record
as of September 14, 2012. The ex-dividend date will be September 12, 2012.
The Company reported total U.S. GAAP operating revenues on a consolidated basis
of $83.6 million, or $1.06 per share, in the second quarter of 2012. This number
excludes $14.8 million of revenues classified as 'repayment of investments in
finance lease', and also excludes $88.0 million of charter revenues earned by
assets classified as 'investment in associate'.
The cash sweep agreement with Frontline had a positive effect of $16.3 million,
or $0.21 per share in the second quarter. The cash sweep for the full year 2012
is payable in March 2013, and a total of $29.9 million has accumulated in the
first two quarters.
There was a $0.6 million, or $0.01 per share, accrual to the 25% profit share
for revenues in excess of the original base rates in the quarter. Following
Frontline's $50 million prepayment of profit share in 2011, another $48 million
of profit share will need to accumulate before profit share revenues are
recognized in the consolidated accounts.
The Company recorded a $21.7 million book gain relating to the termination of
the Horizon Lines charters in the second quarter. The gain includes $16 million
relating to second-lien notes received, $1.7 million relating to warrants
received and $4.0 million in fuel and inventory. At the end of the quarter, the
book value of the warrants was reduced by $0.5 million to $1.2 million through
an asset impairment charge.
Reported net operating income pursuant to U.S. GAAP for the quarter was $66.4
million, or $0.84 per share, and reported net income was $61.2 million, or $0.77
Ole B. Hjertaker, Chief Executive Officer in Ship Finance Management AS said in
a comment: "We continue to deliver positive results and have paid quarterly cash
dividends since our operations began in 2004. Our fleet renewal is progressing
well and we have sold six older OBOs and VLCCs over the last year and at the
same time taken delivery of seven newbuilding drybulk vessels. We still have
another six newbuildings to be delivered in 2012-2013, but very low remaining
net capital expenditures after financing.
Mr Hjertaker continued: "The spot market is challenging in many segments and few
shipping companies have access to capital for new investments right now.
Concurrently, we have seen both secondhand and newbuilding prices fall sharply
over the last 12 months, to levels not seen for a decade. While we have been
cautious and not made new investments for some time, the current market
environment could prove to be an interesting time to invest selectively in
modern assets with the aim to build our long-term distribution capacity."
The full report can be found in the link below.
August 28, 2012
The Board of Directors
Ship Finance International Limited
Questions should be directed to:
Investor and Analyst Contact:
Harald Gurvin, Chief Financial Officer, Ship Finance Management AS
Magnus T. Valeberg, Senior Vice President, Ship Finance Management AS
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
1. Charter revenues includes total charter hire from all vessels and rigs,
including assets in 100% owned subsidiaries classified as 'Investment in
associates' and cash sweep income.
2. EBITDA is a non- GAAP measure and includes assets in 100% owned subsidiaries
classified as 'Investment in associates'. For more details please see Appendix
1: Reconciliation of Net Income to EBITDA.
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 Ship Finance management's examination of historical
operating trends, data contained in the Company's records and other data
available from third parties. Although Ship Finance 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, Ship Finance cannot give
assurance that it will achieve or accomplish these expectations, beliefs or
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, fluctuations in currencies and interest rates,
general market conditions including fluctuations in charter hire rates and
vessel values, changes in demand in the markets in which we operate, changes in
demand resulting from changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, developments regarding the technologies
relating to oil exploration, changes in market demand in countries which import
commodities and finished goods and changes in the amount and location of the
production of those commodities and finished goods, increased inspection
procedures and more restrictive import and export controls, changes in our
operating expenses, including bunker prices, drydocking and insurance costs,
performance of our charterers and other counterparties with whom we deal, timely
delivery of vessels under construction within the contracted price, 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 Securities and