Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 2Q 2015 results and increased quarterly dividend of $0.44 per share
Hamilton, Bermuda, August 26, 2015. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended June 30, 2015.
Highlights
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Increased second quarter dividend of $0.44 per share
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Acquisition of eight Capesize dry bulk carriers with long-term charters
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Acquisition of three 9,300-9,500 TEU container vessels with long-term charters
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Revised charter terms and 28% ownership in Frontline
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Notes and warrants in Horizon Lines sold for $72 million
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Sale of 1995-built Suezmax crude oil tanker
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Selected key financial data:
| Three Months Ended | ||||
| Jun 30, 2015 | Mar 31, 2015 | |||
| Charter revenues(1) | $148m | $153m | ||
| EBITDA(2) | $125m | $127m | ||
| Net income | $ 68m | $ 33m | ||
| Earnings per share | $0.73 | $0.35 | ||
Dividends and Results for the Quarter Ended June 30, 2015
The Board of Directors has declared an increased quarterly cash dividend of $0.44 per share. The dividend will be paid on or about September 30, 2015 to shareholders on record as of September 14, 2015, and the ex-dividend date at the New York Stock Exchange will be September 10, 2015. This will be the 46th consecutive quarterly dividend declared by the Company.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $92 million, or $0.98 per share, in the second quarter of 2015. This number excludes $9.5 million of revenues classified as ‘repayment of investments in finance lease’, and $46 million of charter revenues earned by 100% owned assets classified as ‘investment in associate’.
The cash sweep agreement with Frontline had a positive effect of $9.9 million, or $0.11 per share in the second quarter. For the first half of 2015, a total cash sweep of $19.9 million was recorded. This amount was paid to the Company in August and going forward, the new 50% profit share will be calculated and payable on a quarterly basis. There was also a $0.9 million profit share in the second quarter relating to some of our dry-bulk carriers.
Reported net operating income pursuant to U.S. GAAP for the quarter was $16.7 million, or $0.18 per share, and reported net income was $67.9 million, or $0.73 per share. This is after approximately $29 million, or $0.31 per share, in non-cash vessel impairments related to two smaller container vessels in the second quarter of 2015 and a gain of approximately $45 million, or $0.48 per share, on the sale of notes and warrants in Horizon Lines.
Ole B. Hjertaker, Chief Executive Officer of Ship Finance Management AS said in a comment: “We continue to grow and diversify our fleet, and have recently acquired eleven modern dry bulk and container vessels, adding approximately $700 million to our charter backlog. We also successfully finalized the Frontline restructuring and the sale of our Horizon Lines notes and warrants in the quarter, and have significant additional investment capacity. Going forward our focus will be on finding new accretive investment opportunities across our business segments with the aim to continue building our long-term distribution capacity.”
Questions can be directed to Ship Finance Management AS:
Investor and Analyst Contact:
Harald Gurvin, Chief Financial Officer: +47 23114009
Andre Reppen, Senior Vice President: +47 23114055
Media Contact:
Ole B. Hjertaker, Chief Executive Officer: +47 23114011
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including acquisitions and sales, the Company will have a fleet of 74 vessels consisting of: 18 crude oil tankers (excluding one vessel sold), two chemical tankers, 22 dry bulk carriers (including two acquisitions), 20 container vessels (including three acquisitions), two car carriers, six offshore supply vessels, two jack-up drilling rigs and two ultra-deepwater semi-submersible drilling rigs. 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
Cautionary Statement Regarding Forward Looking Statements
This press release may contain 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. 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 the Company’s view, could cause actual results to differ materially from those discussed in this presentation include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC’s petroleum production levels and worldwide oil consumption and storage, changes in the Company’s operating expenses including bunker prices, dry-docking and insurance costs, 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 United States Securities and Exchange Commission.This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.