Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 3Q 2011 results and quarterly dividend of $0.39 per share
Hamilton, Bermuda, November 23, 2011. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended September 30, 2011.
Highlights
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The Board of Directors declared a quarterly dividend of $0.39 per share.
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Adjusted net income for the quarter was $31.4 million, or $0.40 per share, excluding a negative $2.4 million non-cash mark-to-market of derivatives, and $1.6 million reversal of previously accrued profit share.
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In September 2011, the Company agreed to sell its three remaining non-double hull tankers with delivery to the new owner in 2012 and 2013.
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In October 2011 the Company sold a 1992-built combination carrier.
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The Company took delivery of two newbuilding dry bulk carriers in the third quarter. Both vessels are chartered out on long-term time charters.
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Long-term financing has been arranged for all vessels under construction, with significant positive liquidity effect for the Company in the fourth quarter.
Dividends and Results for the Quarter Ended September 30, 2011
The Board of Directors has declared a quarterly cash dividend of $0.39 per share. Ship Finance has now paid dividends for 31 consecutive quarters. The dividend will be paid on or about December 29, 2011 to shareholders of record as of December 13, 2011. The ex-dividend date will be December 9, 2011.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $73.3 million, or $0.93 per share, in the third quarter of 2011. This number excludes $24.4 million of charter hire classified as ‘repayment of investments in finance lease’, and also excludes $102.1 million of charter revenues earned by assets classified as ‘investment in associate’.
As a result of a continued weak tanker spot market, there was a negative adjustment of approximately $1.6 million of previously accrued profit share related to the vessels on charter to Frontline. The accumulated profit share as of the second quarter was approximately $2.4 million, which has now been reduced to approximately $0.8 million as of the third quarter. The profit share for the year cannot be negative, but there is a risk that some or all of the remaining accrued profit share may have to be reversed in the fourth quarter, depending on the actual charter rates in the quarter.
Reported net operating income pursuant to U.S. GAAP for the quarter was $38.0 million, or $0.48 per share, and reported net income was $27.5 million, or $0.35 per share.
Ole B. Hjertaker, Chief Executive Officer of Ship Finance Management AS said in a comment: “This has been a steady quarter of operations for Ship Finance, where we have taken delivery of two newbuilding dry-bulk vessels on time and on budget. Both vessels entered their long-term charter contracts immediately after delivery, with full cash flow effect from the fourth quarter.
In addition to 59 vessels on the water, we have 10 vessels under construction, including six dry-bulk carriers and four container vessels. All newbuildings have already been fixed on long-term charters from delivery.”
Mr. Hjertaker continued: “We are very pleased to have arranged long-term financing for all our newbuildings, with nearly $90 million positive cash effect for the Company in the fourth quarter alone. While the spot tanker market was very soft in the third quarter, SFL’s fleet of assets is now diversified across multiple segments, with a substantial portion of our cash flow generated from the offshore sector.”
The full report can be found in the link below
November 23, 2011
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
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
Media Contact:
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.