Singapore-listed shipowner First Ship Lease Trust (FSL Trust) has posted a profit of USD5.09 million for the first quarter that ended on 31 March 2015, returning to black after incurring a loss of USD4.95 million in the first quarter of 2014.
Revenue increased 10.5% year on year (y/y) to USD24.78 million in the first quarter of 2015 from USD22.4 million in the first quarter of 2014. The higher earnings were due to a 1326.1% increase in the company’s timecharter business, generating USD1.9 million in the first quarter of 2015, compared with USD134,000 in the first quarter of 2014.
Similarly, FSL Trust’s three chemical tankers under the pool or revenue sharing agreement (RSA) also generated net pool revenue of USD4.15 million, an increase of 57%, in the first quarter of 2015, compared with USD2.64 million in the first quarter of 2014.
“We managed to secure a two-year timecharter agreement with a leading and prominent US oil refiner on the FSL Hong Kong. The rate reflected the improving performance of the Aframax tanker market. We will continue to enter into longer-term contracts with strong counterparties when the right market opportunities arise,” said Alan Hatton, CEO of FSL Trust Management, the trustee-manager of FSL Trust.
FSL Trust has managed to dispose of its entire equity stake in dry bulk company TORM, taking advantage of a short spike in the price of the shares from 21-28 January 2015. This move resulted in a gain of USD1.7 million recognised for the quarter under review.
Moreover, FSL Trust’s other vessels operating expenses declined by 12.3% y/y to USD5.2 million in the first quarter, and the company’s finance expenses decrease of 38.8% y/y to USD3.34 million during the quarter. The lower finance expenses were mainly due to the company’s lower outstanding debts arising from prepayment of USD22 million in the first quarter of 2014. In addition, the expiration of high cost interest rate swaps in 2014 has also resulted in lower finance expenses.
FSL Trust expects an improved outlook for the company business operation, supported by its strong bareboat charter counterparties that continue to perform because of improved tanker markets. FSL Trust is confident that the company is able to maintain profitability and secure timecharters at improved rates in the near term.