Welcome!

News Feed Item

VLCCF - Third Quarter 2012 and Nine Months Results

HAMILTON, BERMUDA -- (Marketwire) -- 11/07/12 --


HIGHLIGHTS

* Knightsbridge reports EBITDA of $4.4 million and EBITDA per share of $0.18 for the third quarter of 2012.

* Knightsbridge reports total cash at September 30, 2012 of $82.5 million.

* Knightsbridge reports a net loss of $57.0 million and a loss per share of $2.33 for the third quarter of 2012.

* The net loss of $57.0 million includes a net loss on the sale of a vessel of $12.7 million and an impairment loss on vessels of $41.6 million.

* Knightsbridge announces a cash dividend of $0.175 per share for the third quarter of 2012.

* Knightsbridge reports a net loss of $53.2 million and a loss per share of $2.19 for the nine months ended September 30, 2012.

* The VLCC Hampstead was sold and delivered on September 20.

* The VLCC Titan Venus was sold and delivered on October 9.


THIRD QUARTER 2012 AND NINE MONTHS RESULTS

Knightsbridge Tankers Limited (the "Company" or "Knightsbridge") reports a net loss of $57.0 million and a loss per share of $2.33 for the third quarter compared to a net loss of $3.3 million and a loss per share of $0.13 for the second quarter of 2012. The increase in the net loss is primarily due to a net loss on the sale of a vessel of $12.7 million in the third quarter, an impairment loss on vessels of $41.6 million in the third quarter and reduced vessel earnings, which were partially offset by the absence of$5.1 million loss that was recorded in the second quarter following the unexpected termination of the Golden Zhejiang time charter. The net loss for the quarter also includes a loss provision for unpaid charter hire of $3.2 million, which was recognized as a reduction of operating revenues, compared with a loss provision of $5.6 million in the second quarter.

The net loss on the sale of a vessel relates to the VLCC Hampstead. The impairment loss on vessels of $41.6 million relates to the VLCC Titan Venus ($14.7 million), the VLCC Kensington ($13.5 million) and the VLCC Mayfair ($13.4 million). An impairment loss is taken when events or changes in circumstances occur that cause the Company to believe that future cash flows for an individual vessel will be less than its carrying value and not fully recoverable. In such instances an impairment charge is recognized if the estimate of the undiscounted cash flows expected to result from the use of the vessel and its eventual disposition is less than the vessel's carrying amount.

The average daily time charter equivalents ("TCEs") earned by the Company's VLCCs, excluding bareboat charters, and Capesize vessels in the third quarter were $1,100 and $22,800, respectively, compared with $20,100 and $9,100 in the preceding quarter. The fall in the TCE rate for the VLCCs is mainly due to weaker rates in the third quarter and a reduction in trading days as a result of the sale of the Hampstead. The improvement on the TCE rate for the Capesize vessels is mainly due improved earnings from the Golden Zhejiang for which there were large write offs in the second quarter following the unexpected termination of its time charter contract. In November 2012, the Company has an average cash breakeven rate for its VLCCs and Capesize vessels of $14,200 and $8,600, respectively, per vessel per day.

Cash and cash equivalents increased by $18.7 million in the quarter. The Company generated cash from operating activities of $10.4 million, received $26.7 million from the sale of vessels, used $14.1 million to repay loan facilities and paid $4.3 million in dividends.

The Company reports a net loss of $53.2 million and a loss per share of $2.19 for the nine months ended September 30, 2012. The net loss includes a net loss on the sale of a vessel of $12.7 million, an impairment loss on vessels of $41.6 million and a loss provision for unpaid charter hire of $10.5 million. The average daily TCEs for the Company's VLCCs, excluding bareboat charters, and Capesize vessels for the nine months ended September 30, 2012 were $15,000 and $22,500 respectively.

THE TANKER MARKET

The market rate for a VLCC trading on a standard 'TD3' voyage between the Arabian Gulf and Japan in the third quarter of 2012 was WS 36, representing a decrease of approximately WS 19 point from the second quarter of 2012 and a decrease of approximately WS 22 points from the third quarter of 2011. Present market indications are approximately $5,500 per day in the fourth quarter of 2012.

Bunkers at Fujairah averaged $650/mt in the third quarter of 2012 compared to $662/mt in the second quarter of 2012. Bunker prices varied between a low of $590/mt on July 2 ( )and a high of $697/mt on September 4.

The International Energy Agency's ("IEA") October 2012 report stated an OPEC oil production, including Iraq, of 31.4 million barrels per day (mb/d) in the third quarter. This was unchanged compared to the second quarter of 2012.

The IEA estimates that world oil demand averaged 90.1 mb/d in the third quarter of 2012, which is an increase of 1.3mb/d compared to previous quarter and the IEA estimates that world oil demand will average approximately 89.7 mb/d in 2012, representing an increase of 0.9 percent or 0.8 mb/d from 2011. 2013 demand is expected to be 90.5 mb/d.

The VLCC fleet totalled 617 vessels at the end of the third quarter of 2012, up from 610 vessels at the end of the previous quarter. 10 VLCCs were delivered during the quarter, three were removed. The order book counted 91 vessels at the end of the third quarter, down from 95 orders from the previous quarter. The current order book represents approximately 15 percent of the VLCC fleet. According to Fearnleys, the single hull fleet is 22 vessels, one less than last quarter.

THE DRY BULK MARKET

The global economy is still under pressure lead by continuous weak data from the Euro Area. IMF has since their last quarterly report lowered its growth forecast for 2012 and 2013 with 0.2 and 0.3 percent and is expecting a growth of 3.3 and 3.6 percent respectively.

Chinese growth, the most important for the dry bulk industry, is unofficially reported to have increased by 7.4 percent which is in line with expectations. Preliminary data for U.S. growth is showing an increase of two percent, slightly above expectations.

In the previous quarter's dry bulk section we referred to the Chinese Authorities' proactive approach and potential new stimulus package on the back of lower inflation. In September 2012 a package of RMB 1 trillion was announced, equivalent to USD 150 billion. The stimulus packages will focus on infrastructure such as highways, railways and waterways and should have a positive effect on steel demand. The steel sector is accounting for almost 50 percent of the dry bulk trade. This had an immediate positive effect on international iron ore prices which had been under pressure until the announcement.

The demand for dry bulk transportation declined by 0.7 percent during third quarter compared to the second quarter of 2012, however it increased by 5.4 percent compared to same quarter in 2011.

China imported 183 million tons of iron ore during the third quarter of 2012 or 730 million tons on an annualized basis against 680 million tons of iron ore imported during 2011.

Increase of coal imports to China is slower compared to the two previous years and the country will most likely end up at around 215 million tons in 2012 which represents a 5 percent growth. The main reason for lower coal imports is higher energy production from hydro power.

The utilization of the dry bulk fleet is till low due to continuous deliveries of new buildings to the market. Approximately 15 million dwt. was delivered during third quarter which represents an increase of two percent compared to deliveries in the previous quarter and 13 percent compared to the same quarter in 2011.

Scrapping so far in 2012 has already passed the record high volume of 2011 and it is expected that total scrapping could reach 32 million dwt. for the full year. 77 Capesize vessels have been reported sold for scrap so far this year which is an encouraging number and average scrap age is on its way down. In spite of the high number of dry bulk vessels being sold for demolition, the scrap prices have been quite stable. New and modern scrap yard capacity will be available in China by the end of this year.

The total order book of 125 million dwt. represents approximately 18 percent of the existing dry bulk fleet. New orders being placed so far this year are almost non existing. The official order book for 2014 stands at 20 million dwt. against an estimated total delivery of more than 115 million dwt. new capacity this year. The input is based on an average from four independent analysts.

THE FLEET

In September 2012, the Company announced that the sale of the VLCC Hampstead was not completed due to the buyer's default. The sale was, therefore, cancelled and the Company retained the deposit received in the amount of $2.4 million. The VLCC Hampstead was then remarketed for sale and was sold with delivery to the new buyer on September 20. This sale resulted in a loss of $15.1 million. These amounts comprise the net loss on sale of a vessel of $12.7 million, which was recorded in the third quarter.

In September 2012, the Company also announced that the VLCC Titan Venus had been sold to an unrelated third party and was delivered to its new owners on October 9. The Company has recorded an impairment loss on this vessel of $14.7 million in the third quarter.

The long term charter contract for the VLCC Mayfair was terminated by the Company in October 2012. The bare boat contract was initially for five years ending July 2015. The charterer failed to adhere to the contract and the vessel has been redelivered to the Company. The Company has a guarantee from the parent company of the charterer. The Company has a claim for unpaid hire and will seek recovery of damages for the remaining period of the charter contract. The Company is in the process of finding alternative employment for the vessel.

CORPORATE AND OUTLOOK

The Company's fleet consists of four Capesize vessels and two VLCCs. The sale of the two VLCCs is part of the Company's intention to renew and grow the fleet and may assist the Company in reacting to interesting acquisition opportunities.

The Company is looking into investment opportunities in the dry bulk segment where the risk/reward ratios look attractive

The Board has decided to declare a dividend of $0.175 per share. The record date for the dividend is November 23, 2012, the ex dividend date is November 28, 2012 and the dividend will be paid on or around December 12, 2012.

24,437,000 ordinary shares were outstanding as of September 30, 2012, and the weighted average number of shares outstanding for the quarter was 24,437,000.

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.

The full report is available in the link enclosed

The Board of Directors
Knightsbridge Tankers Limited
Hamilton, Bermuda
November 6, 2012

3rd Quarter 2012 results: http://hugin.info/132879/R/1655791/535156.pdf

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Knightsbridge Tankers Limited via Thomson Reuters ONE

[HUG#1655791]

Questions should be directed to:

Contact:
Ola Lorentzon
Chairman
Knightsbridge Tankers Limited
+ 46 703 998886

Inger M. Klemp
Chief Financial Officer
Knightsbridge Tankers Limited
+47 23 11 40 76

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Niagara Networks exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
Information technology (IT) advances are transforming the way we innovate in business, thereby disrupting the old guard and their predictable status-quo. It’s creating global market turbulence. Industries are converging, and new opportunities and threats are emerging, like never before. So, how are savvy chief information officers (CIOs) leading this transition? Back in 2015, the IBM Institute for Business Value conducted a market study that included the findings from over 1,800 CIO interviews ...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
"We host and fully manage cloud data services, whether we store, the data, move the data, or run analytics on the data," stated Kamal Shannak, Senior Development Manager, Cloud Data Services, IBM, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
Whether you like it or not, DevOps is on track for a remarkable alliance with security. The SEC didn’t approve the merger. And your boss hasn’t heard anything about it. Yet, this unruly triumvirate will soon dominate and deliver DevSecOps faster, cheaper, better, and on an unprecedented scale. In his session at DevOps Summit, Frank Bunger, VP of Customer Success at ScriptRock, discussed how this cathartic moment will propel the DevOps movement from such stuff as dreams are made on to a practic...
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.