Singapore – FSL Trust Management Pte. Ltd. (“FSLTM”), as trustee- manager of First Ship Lease Trust (“FSL Trust” or “the Trust”), announces its third quarter results for the period ended 30 September 2019.

The Trust achieved its third consecutive quarter of profitability in 3QFY19, with a net profit of US$1.6 million - a turnaround compared to a US$2.0 million net loss over the same period last year. Revenue in 3QFY19 rose by 3.5% to US$15.5 million compared to the same period in 2018, driven by improved charter rates in pools and spot markets.

In 3QFY19, the Trust continued to generate positive cash flows from operations of US$15.9 million. Following the conversion of the Convertible Bond into units, the net gearing ratio was further reduced to 27.8% (38.6% in 3QFY18).Finance expenses dropped by 36.5% (US$0.9 million) compared to 3QFY18, largely due to lower outstanding indebtedness, bond interest and amortisation of debt transaction costs.

Update on the Use of Proceeds raised from the Preferential Offering

Of the US$31.0 million net proceeds FSL Trust raised from a Preferential Offering on 7th June 2019, US$10.2 million was used to set-off against the Outstanding Amount and accrued interest of the Bridging Loan from the Sponsor, while US$4.9 million was used to pay the second instalment of 10% of the consideration for New Vessel Hull N944. The remaining US$15.9 million balance was placed on fixed deposits with Singapore banks, to be used for the next instalments due to the Shipyard.

Following the completion of the shipbuilding plan, works are proceeding as scheduled. Steel cutting for Hull N944 started in September 2019, while for Hull N945 the steel cutting is scheduled for November 2019.

Third Quarter 2019

  • Net profit of US$1.6 million
  • Revenue growth of 3.5%
  • Gearing ratio reduced to 27.8%

Commenting on the results, Roger Woods, Chief Executive Officer, said “Our focus on strengthening the balance sheet was further supported by steadily improved profitability and cashflow. Despite market volatility, we remain cautiously optimistic about market conditions in the remainder of 2019 amid reduced tonnage supply with vessels being docked for IMO2020 scrubber installations, combined with the incremental demand stemming from the anticipated change in trading patterns due to the new low sulphur fuel requirements.”

Stathis Topouzoglou, Chairman of the Trust said “The close collaboration between the Board and the management team has been reflected on the improved and deleveraged financial position of the Trust which I am pleased to report. We are focusing on further optimizing the balance sheet, allowing the Trust to pursue future market opportunities. Going forward, we will continue to explore strategic alternatives for the benefit of the unitholders.”