SYS-CON MEDIA Authors: Elizabeth White, Tom Leyden, Sean Houghton, Glenn Rossman, Ignacio M. Llorente

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
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
ScriptRock makes GuardRail, a DevOps-ready platform for configuration monitoring. Realizing we were spending way too much time digging up, cataloguing, and tracking machine configurations, we began writing our own scripts and tools to handle what is normally an enormous chore. Then we took the concept a step further, giving it a beautiful interface and making it simple enough for our bosses to understand. We named it GuardRail after its function - to allow businesses to move fast and stay sa...
SYS-CON Media announced today that Sematext launched a popular blog feed on DevOps Journal with over 6,000 story reads over the weekend. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting an...
In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally. DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada...
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...