SFL – SECOND QUARTER RESULTS 2006

Ship Finance International Limited (“Ship Finance” or the “Company”) reports total operating revenues of $90.9 million, operating income of $65.1 million and net income of $43.4 million for the second quarter of 2006. Earnings per share for the quarter were $0.60. All vessels are operating under long term charters.  

 

In the second quarter, operating revenues include $5.5 million of accrued profit share due from Frontline Ltd. (“Frontline”) under long term charter agreements. The Company estimates that an additional $38.2 million in profit share has accumulated during the first half of 2006, however this cannot yet be accounted for in accordance with U.S. generally accepted accounting principles. The unrecognised income of $38.2 million will be recognised in the third and fourth quarters provided the vessels continue to earn in excess of the fixed charter rates received from Frontline. The estimated profit share for the second quarter was $13.8 million. The average daily time charter equivalents (“TCEs”) earned by Frontline in the second quarter in the spot and time charter period market from the Company’s VLCCs, Suezmax tankers, and Suezmax OBO carriers were $48,990, $30,594 and $30,059 respectively.

 

As per June 30, 2006, the Company had interest rate swaps with a total notional principal of $742 million and an average interest rate of about 4.2 percent per annum. In the second quarter other financial items include a gain of $3.8 million that is attributable to the mark to market valuations of swaps compared with a gain of $8.7 million in the first quarter.

 

Ship Finance announces net income of $77.3 million for the six months ended June 30, 2006 equivalent to earnings per share of $1.06. The average daily time charter equivalents (“TCEs”) earned by Frontline for the first six months in the spot and time charter period market from the Company’s VLCCs, Suezmax tankers, and Suezmax OBO carriers were $59,404, $40,515 and $30,907, respectively.

 

As per June 30, 2006, the Company had total cash and cash equivalents of $44.2 million, of which $10.8 million is restricted. Cash provided by operating activities in the quarter was $1.6 million, net cash used in investing activities was $13.5 million and net cash used in financing activities was $43.2 million.  

The full report is available in the below attachment.

 

 

August 22, 2006

The Board of Directors

Ship Finance International Limited

Hamilton, Bermuda

 

Questions should be directed to:

 

Tor Olav Troim: Director, Ship Finance International Limited

+44 7734 976 575

 

Lars Solbakken: Chief Executive Officer, Ship Finance Management AS

+47 23 11 40 06

 

Inger M. Klemp: Chief Financial Officer, Frontline Management AS

+47 23 11 40 76