Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 4Q 2012 results
Hamilton, Bermuda, February 25, 2013. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended December 31, 2012.
Highlights
- Fourth quarter dividend of $0.39 per share was prepaid in December 2012
- Acquisition of two car carriers in combination with long-term charters
- Raised approximately $89 million in a public equity offering
- Raised the equivalent of approximately $105 million in NOK-denominated senior notes due 2017
- Refinanced $420 million bank debt related to an ultra-deepwater drillship
- Raised $350 million senior convertible notes due 2018 subsequent to quarter-end
- Disposal of four older vessels in 4Q 2012 and two vessels in 1Q 2013
- Selected key financial data:
| Three Months Ended | Twelve Months Ended | |||
| Dec 31, 2012 | Sep 30, 2012 | Dec 31, 2012 | Dec 31, 2011 | |
| Charter revenues(1) | $168m | $179m | $716m | $784m |
| EBITDA(2) | $134m | $145m | $585m | $674m |
| Net income | $51m | $35m | $186m | $131m |
| Earnings per share | $0.60 | $0.44 | $2.31 | $1.66 |
| Dividend per share | $0.39 | $0.39 | $1.56 | $1.47 |
Dividends and Results for the Quarter Ended December 31, 2012
The Board of Directors previously declared a fourth quarter cash dividend of $0.39 per share in November 2012. The Board decided to accelerate the fourth quarter 2012 dividend payment due to uncertainties surrounding taxation on dividends for our U.S. shareholders. The accelerated dividend was paid together with the third quarter 2012 dividend payment in late December 2012.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $77.7 million, or $0.92 per share, in the fourth quarter of 2012. This number excludes $14.6 million of revenues classified as ‘repayment of investments in finance lease’, and also excludes $77.8 million of charter revenues earned by assets classified as ‘investment in associate’.
The cash sweep agreement with Frontline had a net positive effect of $12.1 million, or $0.14 per share in the fourth quarter. For the full year 2012 a total of $52.2 million cash sweep was recorded and is payable to Ship Finance in March 2013.
The Company recorded a $21.5 million gain on sale of vessels in the quarter arising from the sale of four older vessels, including three combination carriers and one single-hull VLCC.
Reported net operating income pursuant to U.S. GAAP for the quarter was $57.9 million, or $0.68 per share, and reported net income was $51.1 million, or $0.60 per share.
Ole B. Hjertaker, Chief Executive Officer of Ship Finance Management AS said in a comment: “Since October 2012, we have successfully raised a combined amount of more than $1 billion in equity, bonds, convertible notes and bank financing. The Company has in a timely manner addressed debt maturities and refinanced both secured and unsecured debt, in addition to raising capital earmarked for growth.”
Mr Hjertaker continued: “We believe that Ship Finance is well positioned with a strong balance sheet to selectively pursue new investments. We acquired two car carriers in the fourth quarter, and are actively reviewing other investment opportunities across our main market segments. At the same time we are also closely monitoring the performance of our chartering counterparties in light of the prevailing soft spot-market in some of the shipping segments.”
February 25, 2013
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
Questions should be directed to:
Investor and Analyst Contact:
Harald Gurvin, Chief Financial Officer, Ship Finance Management AS
+47 23114009
Magnus T. Valeberg, Senior Vice President, Ship Finance Management AS
+47 23114012
Media Contact:
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 65 vessels, including 24 crude oil tankers (VLCC and Suezmax), two chemical tankers, 12 drybulk carriers including one newbuilding, 15 container vessels including four newbuildings, six offshore supply vessels, one jack-up drilling rig, one ultra-deepwater drillship, two ultra-deepwater semi-submersible drilling rigs and two car carriers. The fleet is one of the largest in the world and most of the vessels are employed on long-term charters.
More information can be found on the Company’s website: www.shipfinance.org
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 intentions.
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 Exchange Commission.