Ship Finance International Limited (NYSE: SFL) – Earnings Release
Reports preliminary 3Q 2012 results and quarterly dividend of $0.39 per share
Hamilton, Bermuda, November 29, 2012. Ship Finance International Limited (“Ship Finance” or the “Company”) today announced its preliminary financial results for the quarter ended September 30, 2012.
Highlights:
- Declares a third quarter dividend of $0.39 per share.
- Declares an additional accelerated dividend of $0.39 per share for the fourth quarter 2012, payable in December 2012.
- Acquisition of two car carriers in combination with long-term charters.
- Recently raised $194 million of equity and senior unsecured bonds.
- Selected key financial data:
| Three Months Ended | ||
| Sep 30, 2012 | Jun 30, 2012 | |
| Charter revenues(1) | $179m | $182m |
| EBITDA(2) | $145m | $150m |
| Net income | $35m | $61m |
| Earnings per share | $0.44 | $0.77 |
| Dividend per share | $0.39 | $0.39 |
Dividends and Results for the Quarter Ended September 30, 2012
The Board of Directors has declared a third quarter cash dividend of $0.39 per share. The Board has noted that a significant part of the Company’s U.S. shareholder base may be subject to increased dividend taxation for 2013. In view of this, the Board has decided to accelerate the dividend payment for the fourth quarter 2012 such that the dividend can be paid out together with the third quarter dividend in December 2012.
The combined dividend of $0.78 per share will be paid on or about December 28, 2012 to shareholders of record as of December 20, 2012. The ex-dividend date will be December 18, 2012. In view of the acceleration of the fourth quarter 2012 dividend payment, no additional dividend payment can be expected prior to the declaration of the first quarter dividend in 2013.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $74.3 million, or $0.94 per share, in the third quarter of 2012. This number excludes $14.6 million of revenues classified as ‘repayment of investments in finance lease’, and also excludes $88.9 million of charter revenues earned by assets classified as ‘investment in associate’.
The cash sweep agreement with Frontline had a net positive effect of $10.2 million, or $0.13 per share in the third quarter. This includes a positive contribution of $13.0 million relating to 23 vessels, less a $2.8 million negative adjustment relating to the remaining five vessels. A total of $40.1 million has accumulated in the first three quarters of 2012.
The Company recorded a $1.9 million gain on sale of vessels in the quarter arising from the sale of the 20-year old combination carrier Front Rider. The net cash proceeds to Ship Finance after repayment of associated debt was $2.5 million, including a charter termination compensation payment from Frontline of $0.4 million.
Reported net operating income pursuant to U.S. GAAP for the quarter was $35.1 million, or $0.44 per share, and reported net income was $34.6 million, or $0.44 per share.
Ole B. Hjertaker, Chief Executive Officer of Ship Finance Management AS said in a comment: “We continue to diversify our portfolio and deliver positive results and quarterly cash dividends. Our standing in the financial markets is demonstrated by the successful equity and bond placements in October, in addition to the recent bank financing of the newly acquired car carriers.
November 29, 2012
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
Questions should be directed to:
Investor and Analyst Contact:
Harald Gurvin, Chief Financial Officer, Ship Finance Management AS
+47 23114009
Magnus T. Valeberg, Senior Vice President, Ship Finance Management AS
+47 23114012
Media Contact:
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011
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.