Knightsbridge Tankers Limited (VLCCF) Announces its First Quarter 2004 Results and Cash Distribution
15 5월 2004 - 7:47AM
PR Newswire (US)
Knightsbridge Tankers Limited (VLCCF) Announces its First Quarter
2004 Results and Cash Distribution Knightsbridge Tankers Limited
HAMILTON HM GX, Norway, May 14 /PRNewswire-FirstCall/ -- FIRST
QUARTER RESULTS The Board of Knightsbridge Tankers Limited (the
"Company") is pleased to report the highest quarterly earnings ever
for the Company. The Company reports net income of $23.4 million
and earnings per share of $1.37 for the first quarter of 2004. The
average daily time charter equivalents ("TCEs") earned by the
Company's five VLCCs was $86,185 compared with $59,688 in the
immediately preceding quarter. Net interest expense for the quarter
was $2.3 million (2003 comparable quarter: $2.2 million). At March
31, 2004 approximately 89 per cent of bank debt was fixed,
decreased from 100 per cent at December 31, 2003. In the first
quarter there was a $4.3 million charge to other financial items
that is a non cash charge attributable to the market value
adjustment on the interest rate swap. In the quarter, the interest
rate swap was re-designated from being a 'perfect hedge' as a
result of the refinancing of the existing loan facility.
Consequently mark to market adjustments will be recorded in the
statements of operations rather than as an adjustment to
accumulated other comprehensive income as in prior periods. The net
increase in cash and cash equivalents in the quarter was $36
million. The increase had resulted from cash generated from
operating activities of $35.5 million and net proceeds of $14.2
million from refinancing the Company's loan facility less dividend
payments of $13.7 million. As of May 14, 2004, the Company has an
average cash breakeven rate for its vessels of $18,886, including
interest rate swap payments that will be incurred prior to its
expiry in August 2004. CORPORATE AND OTHER MATTERS In the first
quarter of 2004, the Company's long-term bareboat charters with
Shell International expired and the Company's five VLCCs were
redelivered to the Company during March. In conjunction with the
charter terminations, the existing conditional sale and lease
arrangements were terminated and the vessels were renamed and
reflagged to the Marshall Islands upon redelivery to the Company.
Three of the vessels have been contracted under medium-term time
charters, of which two include market related profit sharing
arrangements, and two vessels are operating in the spot market. In
connection with the redelivery of the vessels, the Company
refinanced the existing $125.4 million debt facility with a $140
million facility. This new facility is repayable in twenty-eight
quarterly instalments of $2.8 million each and a final instalment
of $61.6 million due on the last payment date. The facility
provides for payment of interest on the outstanding principal
balance at the annual rate of LIBOR plus a margin. On May 14, 2004,
the Board declared a dividend of $2.00 per share. The record date
for the dividend is May 24, 2004, ex dividend date is May 20, 2004
and the dividend will be paid on or about June 7, 2004. Following
the expiration of the charters with Shell International and the
employment of the Company's vessels in a combination of spot market
and medium-term time charter business, the Company intends to pay
distributions on a quarterly basis. The timing and amount of
distributions will be dependent upon the Company's earnings,
financial condition, cash requirements and availability and other
factors. THE MARKET The strong VLCC market that we experienced in
the last quarter of 2003 continued in the first quarter of 2004.
Except for brief dips at the beginning and very end of the quarter,
the market from the Middle East to the Far East stayed above WS 100
for the whole quarter. This was the result of continued high world
oil demand due to seasonal cold weather in the U.S and Europe,
continued strong growth in the demand for oil into China, and
improving world economic activity. In addition, logistical problems
with exports from Russia deteriorated further, and this reduction
in the Russian export had to be replaced from the Middle East
resulting in increased ton miles for the world VLCC fleet. Finally,
oil production in Venezuela has still failed to reach pre-strike
levels, the shortfall being covered from the Middle East, again
resulting in increased ton miles. According to IEA, the average
OPEC 10 oil production (which excludes Iraq) in the first quarter
of 2004 was approximately 25.8 million barrels per day (b/d), while
the official OPEC 10 quota in the same period was 24.5 million b/d.
On the 10th of February, OPEC announced that they would cut their
quota by 1.0 million b/d with effect from April 1st in order to
compensate for the expected seasonally weaker demand for oil.
Current estimates from IEA are that OPEC 10 have produced an
average of about 1.9 million b/d more than their official quotas in
April, a trend that is expected to continue through the second
quarter especially in view of the current exceptionally strong
crude oil prices. IEA estimates that world oil demand averaged more
than 81 million b/d in the first quarter, an increase of 2.3
percent from the first quarter of 2003. Industry analysts have
expected a seasonal decrease in the demand in the second quarter,
but at present more and more analysts are announcing that they have
underestimated the demand for oil. Thus, the downward adjustment in
the present quarter will most probably be less than originally
expected. The world tanker fleet totalled 295.3 million dwt at the
end of the first quarter 2004, an increase of 2.1 percent over the
quarter. The world VLCC fleet increased marginally from 433 to 435
vessels. The total orderbook expanded to 83 vessels as a total of
15 VLCC's was ordered during the quarter. This represents 19
percent of the current VLCC fleet. Three VLCC's were scrapped in
the same period. The tanker market looks healthy for the remainder
of the year. At present we are far enough into the second quarter
to say that the crash in earnings that many observers were
predicting did not take place. The freight futures market seems to
be reflecting this view, and at the moment it is possible to sell
freight futures for the rest of the year at a level that equates to
approximately US$55,000 per day on VLCC. FORWARD LOOKING STATEMENTS
Matters discussed in this press release may constitute
forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts. Knightsbridge desires to take
advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The
words "believe," "except," "anticipate," "intends," "estimate,"
"forecast," "project," "plan," "potential," "will," "may,"
"should," "expect" "pending and similar expressions identify
forward-looking statements. The forward-looking statements in this
document are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, our management's examination of historical operating
trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were
reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond our control, we
cannot assure you that we will achieve or accomplish these
expectations, beliefs or projections. In addition to these
important factors, 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
and currencies, general market conditions, including fluctuations
in charterhire rates and vessel values, changes in demand in the
tanker market, as a result of changes in OPEC's petroleum
production levels and world wide oil consumption and storage,
changes in Knightsbridge's operating expenses, including bunker
prices, drydocking and insurance costs, the market for
Knightsbridge's vessels, availability of financing and refinancing,
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 Knightsbridge
with the Securities and Exchange Commission. May 14, 2004 The Board
of Directors Knightsbridge Tankers Limited Hamilton, Bermuda
http://hugin.info/132879/R/945931/133275.pdf Questions should be
directed to: Contact: Ola Lorentzon + 46 703 998886 Inger M. Klemp
+ 47 23 11 40 76 Kate Blankenship + 47 971 53 563 DATASOURCE:
Knightsbridge Tankers Limited CONTACT: Ola Lorentzon,
+46-703-998886, or Inger M. Klemp, +47-23-11-40-76, or Kate
Blankenship, +47-971-53-563, all for Knightsbridge Tankers Limited
Web site: http://hugin.info/132879/R/945931/133275.pdf
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