Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 1Q 2012 results and increased quarterly dividend of $0.39 per share
Hamilton, Bermuda, May 24, 2012. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended March 31, 2012.
Highlights
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The Board of Directors has declared a quarterly dividend of $0.39 per share.
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$13.6 million, or $0.17 per share, accumulated in cash sweep from Frontline.
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$1.4 million, or $0.02 per share, accumulated in profit share in excess of the original base rates.
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During the first quarter 2012, the Company took delivery of four drybulk newbuildings.
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In April 2012, the Company terminated five bareboat charters with Horizon Lines and received $40 million in second-lien bonds plus equity warrants as compensation.
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Selected key financial data for the quarter compared to the previous quarter:
| Three Months Ended | ||
| Mar 31, 2012 | Dec 31, 2011 | |
| Charter revenues(1) | $186m | $193m |
| EBITDA(2) | $154m | $162m |
| Net income | $39m | $30m |
| Earnings per share | $0.49 | $0.38 |
| Dividend per share | $0.39 | $0.30 |
Dividends and Results for the Quarter Ended March 31, 2012
The Board of Directors has declared an increased quarterly cash dividend of $0.39 per share. Ship Finance has now paid dividends for 33 consecutive quarters. The dividend will be paid on or about June 28, 2012 to shareholders of record as of June 15, 2012. The ex-dividend date will be June 13, 2012.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $84.1 million, or $1.06 per share, in the first quarter of 2012. This number excludes $15.8 million of revenues classified as ‘repayment of investments in finance lease’, and also excludes $87.7 million of charter revenues earned by assets classified as ‘investment in associate’.
The new cash sweep agreement with Frontline had a positive effect of $13.6 million, or $0.17 per share in the quarter. The cash sweep for the full year 2012 is payable in March 2013.
There was a $1.4 million, or $0.02 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 $48.6 million of profit share will need to accumulate before profit share revenues are recognized in the consolidated accounts.
Reported net operating income pursuant to U.S. GAAP for the quarter was $48.2 million, or $0.61 per share, and reported net income was $39.0 million, or $0.49 per share.
Ole B. Hjertaker, Chief Executive Officer of 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. The tanker market outperformed most analysts’ expectations in the first quarter and this has contributed to additional revenues through our new cash sweep arrangement with Frontline. The VLCC tanker market has continued at a healthy level so far into the second quarter, and based on this we expect a significant cash sweep contribution in the second quarter as well.”
Mr Hjertaker continued: “Following the restructuring of Horizon Line we have seven container vessels in the spot market. Given the changed profile of our container business we evaluate structural alternatives to maximize the value of this business. One of the alternatives we consider is to carve out the container business into a separate entity.”
The full report can be found in the link below.
May 24, 2012
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 / +47 97520363
Magnus T. Valeberg, Senior Vice President, Ship Finance Management AS
+47 23114012 / +47 93440960
Media Contact:
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243
Footnotes:
1. Charter revenues includes total charter hire from all vessels and rigs, including assets in 100% owned subsidiaries classified as ‘Investment in associates’.
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 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.