SFL – First Quarter 2008 Results

 

 

Ship Finance International Limited (“Ship Finance” or the “Company”) announces the financial results for the quarter ended March 31, 2008.

 

 

Declared an increased quarterly cash dividend of $0.56 per share. The Company intends to further increase the quarterly dividend by two cents to $0.58 per share in the third quarter, when the newly announced ultra-deepwater drillship is delivered and has commenced its operation.

Reported net income for the quarter of $59.8 million, or $0.82 per share, including profit share of $33.7 million, or $0.46 per share.

Fixed-rate charter hire, excluding profit share contribution, was $136.3 million, or $1.87 per share, in the quarter.  

Announced the $60 million acquisition of two 17,000 dwt chemical tanker newbuildings from Bryggen Shipping & Trading AS (“Bryggen”) in combination with 10-year bareboat charters.

Announced new 12-year charters for the 2005-built container vessels Sea Alfa and Sea Beta to an Asia-based regional liner company.

Sea Bear and Sea Leopard, two anchor handling tug/supply vessels, were acquired from Deep Sea Supply Plc. (“Deep Sea”) in early January 2008, in combination with 12-year bareboat charters.   

Continued the disposition of non-double hull vessels. The double-sided Suezmax tanker Front Maple was delivered to its new owner in January 2008, and the single hull VLCC Front Sabang was sold on hire/purchase terms in March 2008.

Announced the $850 million acquisition of a newbuilding ultra-deepwater drillship from Seadrill Limited (“Seadrill”) in combination with a 15-year bareboat charter.

 

 

The Board of Directors has declared an increased cash dividend in respect of the first quarter of $0.56 per share. The dividend will be paid on or about June 30, 2008 to shareholders of record as of June 17, 2008. The ex-dividend date will be June 13, 2008.

 

The Company reported total operating revenues of $121.9 million, or $1.68 per share, in the first quarter. Net operating income for the quarter was $94.7 million, or $1.30 per share, and net income was $ 59.8 million, or $0.82 per share.

 

The profit share accumulated in the first quarter was $33.7 million, or $0.46 per share, up from $16.1 million, or $0.22 per share, in the fourth quarter. The substantial profit share accumulated in the quarter was due to a very strong spot charter market for crude oil tankers, and the market has remained firm so far in the second quarter.

 

There was a $2.2 million, or $0.03 per share, non-cash negative adjustment in mark-to-market of swaps in the first quarter, compared to a $5.5 million, or $0.08 per share, loss in the previous quarter.

 

The Company’s fixed-rate charter hire was $136.3 million, or $1.87 per share, in the quarter. Net of operating expenses and general and administrative expenses in the first quarter, the contribution from the fixed-rate charters was $108.3 million, or $1.49 per share. These numbers are excluding the profit share contribution. 

 

As the majority of the Company’s assets are accounted for as finance leases, a significant portion of the charter hire is not included in the total operating revenues in the Company’s Income Statement. These amounts are classified as ‘repayment of investment in finance leases’, and are included in the Statement of Cashflows. For the first quarter, this amounted to $48.1 million or $0.66 per share.

 

 

May 22, 2008

The Board of Directors

Ship Finance International Limited

Hamilton, Bermuda

 

Questions should be directed to:

 

Lars Solbakken: Chief Executive Officer, Ship Finance Management AS

+47 23114006 / +47 91198844

 

Ole B. Hjertaker: Chief Financial Officer, Ship Finance Management AS

+47 23114011 / +47 90141243