Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 4Q 2010 results and increased quarterly dividend of $0.38 per share
Hamilton, Bermuda, February 18, 2010. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended December 31, 2010.
The Board of Directors declared an increased quarterly dividend of $0.38 per share. This is the fourth consecutive dividend increase in the last 12 months.
Net income for the quarter was $30.5 million, or $0.39 per share, including an accrued profit share in the fourth quarter of $2.0 million, or $0.03 per share. Total accrued profit share for 2010 was $30.6 million and will be payable in March 2011.
In November 2010, the Company agreed to acquire two 57,000 dwt Supramax dry bulk carriers in combination with long-term time charters to Glovis Co. Ltd.
In January 2011, the Company agreed to acquire the modern Jack-up drilling rig Soehanah in combination with a seven-year bareboat charter.
In February 2011, the Company successfully completed an offering of $125 million senior convertible notes due 2016. The notes have an annual coupon of 3.75% and an initial conversion price of $27.05.
In February 2011, the Company agreed to sell two single hull VLCCs which will free up approximately $14.5 million of capital for the Company, after fees, expenses and debt prepayment.
Dividends and Results for the Quarter ended December 31, 2010
The Board of Directors has declared a quarterly cash dividend of $0.38 per share. The dividend will be paid on or about March 29, 2011 to shareholders of record as of March 11, 2011. The ex-dividend date will be March 9, 2011.
The profit share accrued in the fourth quarter was $2.0 million, or $0.03 per share, compared to $5.8 million, or $0.07 per share in the third quarter of 2010. The reduced profit share was a result of a continued soft tanker spot market in the fourth quarter.
Under US GAAP, subsidiaries owning the drilling units West Polaris, West Hercules, West Taurus have been accounted for as ‘investment in associate’ using the ‘equity method’ in 2010. Our investment is a combination of intercompany loans and equity. In our Income Statement, the net contribution from these unconsolidated subsidiaries is recognized as a combination of ‘interest income from associate’ and ‘results in associate’.
The Company reported total net operating revenues on a consolidated basis of $71.2 million, or $0.90 per share, in the fourth quarter of 2010. This number excludes charter hire classified as ‘repayment of investments in finance lease’, and also excludes substantial charter revenues earned by the assets classified as ‘investment in associate’.
Reported net operating income for the quarter was $38.7 million, or $0.49 per share, and reported net income was $30.5 million, or $0.39 per share. The fourth quarter net income was partly impacted by higher operating expenses due to the delivery of three new vessels in the quarter. In addition, this was the first full quarter where all non-double hull VLCCs are on a reduced rate and classified as operating leases. Due to reduced rates and book depreciation, the net operating income contribution from these vessels was $(0.7) million, or $(0.01) per share in the quarter, compared to $3.0 million, or $0.04 per share positive contribution in 4Q 2009.
The full report can be found in the link below
February 18, 2011
The Board of Directors
Ship Finance International Limited
Questions should be directed to:
Investor and Analyst Contact:
Eirik Eide, Chief Financial Officer, Ship Finance Management AS
+47 23114006 / +47 95008921
Magnus T. Valeberg, Vice President, Ship Finance Management AS
+47 23114012 / +47 93440960
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243
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.