HAMILTON, Bermuda, Nov. 14, 2013 (GLOBE NEWSWIRE) --
HIGHLIGHTS
* Knightsbridge reports net income of $1.0 million and earnings per share of
$0.04 for the third quarter of 2013. Excluding the results from discontinued
operations, the Company reports net income of $1.1 million and earnings per
share of $0.04 for the third quarter.
* Knightsbridge reports EBITDA from continuing operations of $4.7 million and
EBITDA from continuing operations per share of $0.19 for the third quarter
of 2013.
* Knightsbridge announces a cash distribution of $0.175 per share for the
third quarter of 2013.
* Knightsbridge reports a net loss of $6.9 million and a loss per share of
$0.28 for the nine months ended September 30, 2013. Excluding the results
from discontinued operations, the Company reports net income of $0.05
million and earnings per share of $0.002 for the nine months ended September
30, 2013.
* In October 2013, Knightsbridge sold 6,000,000 common shares at a public
offering price of $9.00 per share generating net proceeds of approximately
$51.0 million.
* In November 2013, Knightsbridge concluded newbuilding contracts for two
180,000 dwt Capesize bulk carriers.
THIRD QUARTER 2013 AND NINE MONTHS RESULTS
The Company reports net income from continuing operations (i.e. the Capesize
vessels) of $1.1 million and earnings per share from continuing operations of
$0.04 for the third quarter compared with a net loss from continuing operations
of $0.6 million and a loss per share from continuing operations of $0.03 for the
preceding quarter. The average daily time charter equivalent ("TCE") earned by
the Capesize vessels in the third quarter was $21,000 compared with $16,900 in
the preceding quarter. In November 2013, the Company has an average cash
breakeven rate for its Capesize vessels of $11,000 per vessel per day for the
remaining period of 2013.
The results of the VLCCs have been recorded as discontinued operations in
accordance with U.S. generally accepted accounting principles. The Company
reports a net loss from discontinued operations of $0.1 million and a loss per
share from discontinued operations of $0.004 for the third quarter compared with
a net loss from discontinued operations of $0.4 million and a loss per share
from discontinued operations of $0.01 for the preceding quarter.
Cash and cash equivalents decreased by $0.7 million in the third quarter. The
Company generated cash from operating activities of $3.6 million and paid $4.3
million to shareholders.
For the nine months ended September 30, 2013, the Company reports net income
from continuing operations of $0.05 million and earnings per share from
continuing operations of $0.002 compared with net income from continuing
operations of $4.6 million and net income per share from continuing operations
of $0.18 in the nine months ended September 30, 2012. The average daily TCE
earned by the Capesize vessels in the nine months ended September 30, 2013 is
$18,600 compared with $22,500 in the nine months ended September 30, 2012.
THE DRY BULK MARKET
At the end of the second quarter of 2013, we witnessed an increased number of
analysts expressing their concerns over the Chinese growth story. But over the
summer several indicators were pointing in a more positive direction and the
majority of forecasters do believe that China will achieve its 7.5 percent GDP
growth target for 2013. The United States is showing firmer growth on a more
solid private sector foundation in spite of tighter fiscal policy. Even some of
the worst hit European economies are believed to be on their way out of
recession.
The bulk market surprised forecasters during the third quarter. Cape spot
earnings peaked at $42,200 per day on September 25 and the average spot earnings
for the quarter was $19,000 per day. Under normal circumstances dry bulk
analysts have a fairly common view of the utilization of the dry bulk fleet, but
the spread between the estimates has been wider than normal. Cape earnings
during the third quarter should indicate a utilization of 82 to 84 percent based
on historical data for that segment.
After iron ore inventory draw downs for several months during the first half of
2013, imports in the third quarter resulted in slightly higher stockpiles in
major Chinese iron ore ports. A massive 217 million metric tones (mt) of iron
ore was imported during the third quarter. This compares with 185 million mt in
the same quarter last year, which represents an increase of 17 percent. Coal
imports to China reached 70 million mt in the third quarter this year compared
to 52.4 million mt in the same quarter last year.
Vessel values have reacted positively to the improved spot and longer term time
charter markets. A Cape resale has over the year moved from $44 million to $52
million (concluded last month) and a 5 year old Cape has been sold at $40
million compared to $34 million a few months ago. In October, Korean yards are
said to have concluded newbuilding orders for their outline specifications for
delivery 2015/16 at $55 million. Values for smaller vessels have improved as
well, but gains are more modest.
One important part of dry bulk fleet utilization is speed and consumption
optimization. Since March 2011, bunker prices have been on or above
approximately $600/mt. It took some time, however, before owners started to slow
steam on a broader scale. With a bunker price of $600/mt the optimal speed in a
$30,000 per day market is considered to be 12.5 knots for a Cape size (basis
average laden and ballast). During the third quarter, some owners started to
increase speed when the market picked up, but quickly reduced speed when the
market softened a few weeks later. The third quarter of 2013 was maybe the first
and most active quarter when it came to pro active speed and consumption
optimization. It is important to bear in mind that the total fleet has never
sailed faster than 13.7 knots on average since 2007, so the impact should not be
over exaggerated but it might contribute to a floor and ceiling in freight rates
in the medium term.
THE FLEET
The Company's sailing fleet consists of four Capesize bulk carriers. The
Battersea is employed in the spot market. Golden Zhejiang, Golden Future and
Belgravia are employed on time charters with estimated redeliveries in Q1 2014,
Q1 2014 and Q3 2014, respectively.
The Company is pleased to announce that the Letters of Intent with Daehan
Shipyard have been converted into two newbuilding contracts for 180,000 dwt
Capesize bulk carriers. The vessels are expected to be delivered to the Company
during 2015 and represent the next generation Capesize bulk carriers with the
latest technology available in order to secure fuel efficiency. The Board is of
the opinion that the Company has obtained favorable terms and attractive pricing
for its newbuilding program which now consists of four Capesize bulk carriers.
CORPORATE
24,472,061 ordinary shares were outstanding as of September 30, 2013, and the
weighted average number of shares outstanding for the quarter was 24,472,061.
In October 2013, the Company sold 6,000,000 common shares at a public offering
price of $9.00 per share generating net proceeds of approximately $51.0
million. The Company also granted the book-running manager a 30-day option to
purchase 900,000 additional common shares. The common shares are being offered
pursuant to the Company's effective shelf registration statement. The Company
intends to use the net proceeds of this offering to partially fund the
acquisition of newbuilding vessels and for general corporate purposes.
The Board has decided to declare a cash distribution of $0.175 per share. The
record date is November 29, 2013, the ex cash distribution date is November
26, 2013 and the cash distribution will be paid on or around December10, 2013.
OUTLOOK
Knightsbridge remains well positioned in the market place with its modern bulk
fleet and financial flexibility. The Board believes that the Company will
benefit from its current Capesize play. The Capesize vessels are mainly carrying
coal and iron ore and the demand for freight is expected to increase for these
commodities going forward. Despite the recent spikes in freight rates the dry
bulk market is still is over supplied. However the Company expects that balance
will improve at the time of delivery of the newbuildings.
FORWARD LOOKING STATEMENTS
Matters discussed in this report may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements, which 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 Tankers Limited and its subsidiaries, or the Company, 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. This report and any other written
or oral statements made by us or on our behalf may include forward-looking
statements, which reflect our current views with respect to future events and
financial performance. The words "believe," "anticipate," "intend," "estimate,"
"forecast," "project," "plan," "potential," "will," "may," "should," "expect"
and similar expressions identify forward-looking statements.
The forward-looking statements in this report are based upon various
assumptions, including, without limitation, management's examination of
historical operating trends, data contained in our records and 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. We undertake no obligation to update
any forward-looking statements, whether as a result of new information, future
events or otherwise.
In addition to these important factors and matters discussed elsewhere herein
and in the documents incorporated by reference herein, 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 dry bulk market, changes in the Company's operating
expenses, including bunker prices, drydocking and insurance costs, the market
for the Company'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, political events or acts by terrorists, and other important
factors described from time to time in the reports filed by the Company with the
Securities and Exchange Commission, or the Commission.
The full report is available for download in the link enclosed.
The Board of Directors
Knightsbridge Tankers Limited
Hamilton, Bermuda
November 13, 2013
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
3rd Quarter 2013 Results: http://hugin.info/132879/R/1743239/586317.pdf
[HUG#1743239]
