Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 3Q 2010 results and increased quarterly dividend of $0.36 per share
Hamilton, Bermuda, November 23, 2010. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended September 30, 2010.
· The Board of Directors declared a quarterly dividend of $0.36 per share. This is the third consecutive dividend increase in 2010.
· Adjusted net income for the quarter was $36.7 million, or $0.46 per share, net of a $0.4 million gain on sale of assets and negative non-cash mark-to-market of interest rate swaps of $2.5 million.
· Accrued profit share in the third quarter was $5.8 million, or $0.07 per share. Total accrued profit share for the first nine months of 2010 is $28.6 million and will be payable in March 2011.
· In August and November 2010, the Company agreed to acquire five 57,000 dwt Supramax dry bulk carriers in combination with long-term time charters to an Asia-based logistics company.
· In October 2010, the Company completed a $84.6 million offering of senior notes due 2014 in the Norwegian credit market.
· In November 2010, the Company announced long-term time charters on four 34,000 dwt Handysize dry bulk carriers under construction in China. All newbuildings have now been chartered out.
Dividends and Results for the Quarter ended September 30, 2010
The Board of Directors has declared a quarterly cash dividend of $0.36 per share. The dividend will be paid on or about December 30, 2010 to shareholders of record as of December 8, 2010. The ex-dividend date will be December 6, 2010.
The profit share accrued in the third quarter was $5.8 million, or $0.07 per share, compared to $11.4 million, or $0.14 per share in the second quarter of 2010. The reduced profit share was caused by a softer tanker spot market in the third quarter.
Under US GAAP, the ultra-deepwater drilling units West Polaris, West Hercules and West Taurus and the Panamax dry bulk carrier Golden Shadow are accounted for as ‘investment in associate’ using the ‘equity method’. 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 $73.5 million, or $0.93 per share, in the third 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 $44.2 million, or $0.56 per share, and reported net income was $34.6 million, or $0.44 per share. Adjusted net income for the quarter was $36.7 million, or $0.46 per share, net of a $0.4 million gain on sale of assets and negative non-cash mark-to-market of derivatives of $2.5 million.
November 23, 2010
The Board of Directors
Ship Finance International Limited
Questions should be directed to:
Ole B. Hjertaker: Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243
Magnus T. Valeberg: Vice President, Ship Finance Management AS
+47 23114012 / +47 93440960