Ship Finance International Limited (NYSE: SFL)
Reports Results for Third Quarter 2006 and Declares Quarterly Dividend
Ship Finance International Limited (“Ship Finance” or the “Company”) announced today the financial results for the third quarter ended September 30, 2006.
Dividends and Results for the Quarter Ended September 30, 2006
The Board of Directors has reviewed the long term prospects for the Company including its significant fixed charter backlog and growth prospects, and decided to increase the ordinary cash dividend basis from $0.45 per share to $0.50 per share. In addition, the Board of Directors has decided to pay a supplementary extraordinary dividend of $0.03 per share, bringing the total dividend payment for the quarter to $0.53 per share. The dividend will be paid on December 21, 2006 to shareholders of record as of December 7, 2006. The ex dividend date is December 5, 2006.
The Company reported total operating revenue of $121.8 million, operating income of $86.3 million and net income of $45.7 million for the third quarter of 2006. Earnings per share for the quarter were $0.63.
As of September 30, 2006, the Company had interest rate swaps with a total notional principal of $740.4 million and an average interest rate of 4.42 percent per annum. In the third quarter other financial items include a loss of $16.4 million that is attributable to the mark-to-market valuations of interest rate swaps. The interest rate swaps are used to fix a portion of the interest rate on the Company’s floating rate debt. The decrease in the mark-to-market valuations is attributable to lower interest rates compared to the end of the second quarter of 2006. A part of the Company’s debt is on floating rate terms, and lower interest rates in the future will, if sustained, improve long term earnings.
As of September 30, 2006, the Company had total cash and cash equivalents of $31.6 million and restricted cash of $10.9 million. In addition, the Company had available undrawn credit lines in the amount of $196.7 million. Cash provided by operating activities in the quarter was $29.0 million, net cash provided by investing activities was $15.9 million and net cash used in financing activities was $46.6 million.
For the third quarter, operating revenues include $37.5 million of profit share due from Frontline under long term charter agreements. For the second quarter of 2006, $5.5 million of profit share was included in the operating revenues. For the first nine months of 2006, $43.0 million of profit share has been included in the operating revenues. The Company estimates that a total of $63.9 million in profit share has accumulated during the first nine months of 2006, of which $20.3 million in the third quarter. However this cannot be fully accounted for in accordance with US GAAP. The unrecognised income of $20.9 million will be recognised in the fourth quarter provided the vessels continue to earn in excess of the fixed charter rates received from Frontline.
The full report is available in the link below.
November 28, 2006
The Board of Directors
Ship Finance International Limited
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 2311 4006
Ole B. Hjertaker: Chief Financial Officer, Ship Finance Management AS
+47 2311 4011 / +47 9014 1243