ITCL - First Quarter 2012 Results
Press release from Independent Tankers Corporation Limited 31.05.2012
Highlights
· Independent Tankers reports a net loss of $2.9 million, equivalent to a loss per share of $0.04 for the first quarter of 2012.
· In February 2012, BP Shipping Limited extended the charter for the VLCC British Progress for one additional year.
Introduction
Independent Tankers Corporation Limited (the "Company" or "Independent Tankers") was incorporated in Bermuda on January 18, 2008 and the shares have traded on the Norwegian over-the-counter market since March 7, 2008. Independent Tankers' business is mainly concentrated on the ownership and operation of crude oil tankers on long term bareboat contracts to major oil companies and two vessels operating in the spot market. Independent Tankers owns six VLCC's and three Suezmax tankers. All vessels are financed through bonds in the US market. The main shareholder is Frontline Ltd. ("Frontline") with an ownership of approximately 83 percent.
First Quarter 2012 Results
The Board of Independent Tankers announces a net loss of $2.9 million, equivalent to a loss per share of $0.04 for the first quarter of 2012 compared to a net loss of $2.3 million, equivalent to a loss per share of $0.03, for the fourth quarter of 2011. The increase in the net loss is primarily attributable to reduced earnings from the two vessels trading in the spot market. The average daily time charter equivalent rate earned in the first quarter by the Company's two VLCCs trading in the spot market was $6,500 compared with $12,900 in the preceding quarter. The average daily bareboat rate earned in the first quarter by the Company's VLCCs was $22,100, which was the same as the preceding quarter.
In May 2012, the average total cash cost breakeven rates for the remaining part of 2012 is approximately $30,000 per day for the two spot trading VLCCs and $21,200 per day for the four vessels on bareboat charters.
Chartering Summary
The VLCC market continued to be weak in the first quarter of 2012 and the age of the vessels makes chartering them at good rates in the current climate difficult. Earnings have been poor on both spot traded vessels, especially the Ulriken resulting from an incident with one of the engines but more significantly due to high fuel consumption. The decision was taken to drydock the vessel post quarter end and there was found to be fouling on the hull of the vessel. The technical managers are confident that the resultant cleaning and painting undertaken in drydock will resolve the speed and fuel consumption problems that the vessel has experienced.
In February 2012, BP extended the charter for the VLCC British Progress for one additional year. As a result, the vessel will trade on a market rate with a minimum bareboat rate of $20,000 per day from February 2, 2012 until February 2, 2014.
Other Matters
74,825,166 ordinary shares were outstanding as of March 31, 2012, and the weighted average number of shares outstanding for the quarter was also 74,825,166.
The full report is available for download in the link enclosed and from the Company's website www.itcl.bm.
The Board of Directors
Independent Tankers Corporation Limited
Hamilton, Bermuda
May 30, 2012
Questions should be directed to:
Magnus Vaaler: Vice President Finance, Frontline Management AS
+47 23 11 40 21
WEBSITE: WWW.ITCL.BM
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 the Company's management's examination of historical operating trends. Although the Company 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, the Company cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire 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 the Company's operating expenses including bunker prices, drydocking and insurance costs, 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 Norwegian over-the-counter market in Oslo.
1st quarter 2012 results