SFL - Fourth Quarter 2011 Results
Ship Finance International Limited (NYSE: SFL) - Earnings Release
Hamilton, Bermuda, February 17, 2012. Ship Finance International Limited ("Ship Finance" or the "Company") today announced its preliminary financial results for the quarter ended December 31, 2011.
- The Board of Directors declared a quarterly dividend of $0.30 per share.
- In October 2011, the Company took delivery of one newbuilding drybulk carrier with a five-year time charter.
- In October 2011, the Company sold a 1992-built combination carrier.
- In December 2011, the Company agreed to amend the charters with Frontline and temporarily reduce the fixed charter rates against a significant upfront cash payment and improved profit share structure.
- In January and February 2012, the Company has taken delivery of three drybulk carriers with ten, five and three year time charters, respectively.
- Selected key financial numbers for the quarter compared to the previous quarter:
|Three Months Ended|
|Dec 31, 2011||Sep 30, 2011|
|Earnings per share||$0.38||$0.35|
|Dividend per share||$0.30||$0.39|
Dividends and Results for the Quarter Ended December 31, 2011
The Board of Directors has declared a quarterly cash dividend of $0.30 per share. Ship Finance has now paid dividends for 32 consecutive quarters. The dividend will be paid on or about March 28, 2012 to shareholders of record as of March 9, 2012. The ex-dividend date will be March 7, 2012.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $76.1 million, or $0.96 per share, in the fourth quarter of 2011. This number excludes $129.9 million of revenues classified as 'repayment of investments in finance lease', and also excludes $93.7 million of charter revenues earned by assets classified as 'investment in associate'.
As a result of a soft tanker spot market in most of the fourth quarter, there was a negative adjustment of approximately $0.3 million of previously accrued profit share related to the vessels on charter to Frontline. The aggregate profit share for the year 2011 remained positive with $0.5 million and will be payable in March 2012.
Reported net operating income pursuant to U.S. GAAP for the quarter was $42.0 million, or $0.53 per share, and reported net income was $30.2 million, or $0.38 per share.
Ole B. Hjertaker, Chief Executive Officer of Ship Finance Management AS said in a comment: "In 2011 we experienced the weakest tanker market for 12 years, but there was still a positive profit share generated by the Frontline vessels for the year. With the recent adjustment in the chartering agreements, Frontline is in a position to withstand a prolonged downturn in the tanker market and Ship Finance will be more than compensated if the market continues at the 2011-level or above."
Mr. Hjertaker continued: "The new cash sweep payments may alone give a positive net effect of approximately $0.20 per share per quarter, or double the previous net contribution from these vessels, if Frontline generates market revenues in line with the previous base rates only. According to Clarkson's, average VLCC earnings year-to-date has been well in excess of this level. Our fleet is diversified across four main market segments, of which offshore is the largest. We currently have 65 vessels in operation which are chartered to 13 customers, and all are current with their charter payments to us."
The full report can be found in the link below
February 17, 2012
The Board of Directors
Ship Finance International Limited
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: Senior Vice President, Ship Finance Management AS
+47 23114012 / +47 93440960
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243
- Charter revenues includes total charter hire from all vessels and rigs, including assets in 100% owned subsidiaries classified as 'Investment in associates'
- EBITDA is a non- GAAP measure and includes assets in 100% owned subsidiaries classified as 'Investment in associates'. For more details please see Appendix 1: Reconciliation of Net Income to EBITDA.
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.
Fourth Quarter 2011 Results