FIRST SHIP LEASE TRUST F i r s t S h i p L e a s e Tr u s t
4Q FY2014 Financial Results
25 February 2015
4QFY14 - Key Financial Highlights
Net cash generated from operations increased 142.6% year-on-year to
US$18.5 million
Net profit of US$7.3 million
Third consecutive quarter of profitability
Significant improvement compared to previous corresponding periods
Revenue increased 5.3% year-on-year to US$24.4 million
Impairment loss of US$0.6 million recognized on investments in TORM
Gained US$1.7 million on disposal of TORM shares to be recognized in
1QFY15 financial results
2
Performance Review
US$'000 | 4QFY14 | 4QFY13 | Change % | FY2014 | FY2013 | Change % |
Revenue | 24.4 | 23.2 | 5.3 | 93.4 | 90.0 | 3.8 |
Profit/(Loss) for the quarter | 7.3 | (42.0) | N.M. | 4.1 | (65.2) | N.M. |
Net cash generated from operations | 18.5 | 7.6 | 142.6 | 53.0 | 36.0 | 47.7 |
Operating Profit | 5,536.0 | (36,078.0) | N.M | 16,797.0 | (40,628.0) | N.M |
Notable year-on-year improvement in Net cash generated from operations
Revenue and Profit improved despite adverse impact of FSL London dry
docking in 4QFY14 and smaller fleet in FY14
3
Key Achievements in 2014
Disposal of two 15 year-old loss-making dry bulk vessels, reducing capital expenditure and cost of debt service in 1HFY14
Securing a new time charter agreement with Tesoro for FSL Shanghai on
improved rates
Generating first quarterly profit in nearly three years, in 2QFY14
Appointment of Esben Poulsson as non-executive independent director
Recently announced compliance with the original 2011 loan agreement terms - Onerous terms of relaxation fall away
Cashflow positive - Net cash generated from operations of US$18.5 million
and US$53.2 million for 4QFY14 and FY14 respectively
4
Update on Loan Compliance Confirmation
Announced on 6 January that the Trust is compliant with the terms of its
original loan agreement following a covenant relaxation period of two and a
half years
Key covenant has been value-to-loan ratio > 125%
Security deposit of US$10.0 million, deposited to address VTL shortfall, to be released following confirmation of compliance with debt service cover ratio ("DSCR") covenant
DSCR is forecast to be in excess of 1.2x at the end of 4QFY14
- 1.1x required for loan covenant compliance
- 1.15x hurdle for the release of the Security Deposit
5
Revenue Breakdown
20,000
18,000
16,000
18,912
3,504
15,869
951
Pool/Spot:
Three chemical tankers in the Nordic Tankers
Pool
Improved performance of FSL Hong Kong
under the Teekay RSA (1)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1,952 1,126
13,456 13,792
4QFY14 4QFY13
Bareboat charter Time charter Pool/Spot
FSL Busan and FSL Santos in the HANSE pool
Time charter:
FSL Shanghai deployed on an improved time
charter rate with Tesoro
No longer includes FSL Durban and Stella
Fomalhaut (2)
Bareboat charter:
No longer includes FSL Busan and FSL Santos
Improved performance of TORM Margrethe
and TORM Marie, the only floating rate BBC
agreements
Note 1: Teekay Revenue Sharing Agreement equivalent to pooled income
Note 2: After its redelivery in October 2013, FSL Durban and Stella Fomalhaut were employed on time charter
6
Bareboat Lease Revenue Backlog
Remaining contracted revenue stood at US$147 million (1)
as at 31 December 2014
51
42
29
25
2015 2016 2017 3 Years: 2018 - 2020Note 1: Based on revenue from 12 bareboat charters (excluding secured contracted revenue of US$8.0 million from Tesoro and Petrobras on fixed-rate time charters and TORM on variable market rate bareboat charters)
7
Maturity of Leases
Lease maturity of vessels (2015 to 2022)
with average remaining lease term of four years as at 31 December 2014
2015 2016 2017 2018 2019 2020 2021 2022 2023
Product Tanker Containership Crude Oil Tanker Chemical TankerCumbrian Fisher Clyde Fisher Shannon Fisher Solway Fisher Speciality Seniority Superiority
TORM Margrethe TORM Marie FSL Hamburg FSL Singapore Ever Radiant Ever Respect YM Eminence YM Elixir
YM Enhancer FSL Busan FSL Santos
FSL Hong Kong FSL Shanghai FSL New York FSL London FSL Tokyo
Fixed rate time charters
Containership pool with HANSE Teekay RSA
Fixed-rate time charter
Chemical tanker pool with Nordic Tankers
Market rate bareboat charters
Base
Potential extension
Vessels
on
fixed rate
bareboat
charters
Vessels on
fixed-rate bareboat charters
8
Scheduled Redeliveries up to June 2016
Crude Oil
Tanker
Product
Tanker
Containership
Jan 2015 Jun 2015
FSL Shanghai FSL Singapore FSL Hamburg Solway Fisher Shannon Fisher Ever Respect Ever Radiant
Jan 2016
Jun 2016
Vessel on fixed rate time charter
Vessels on fixed rate bareboat charters
Three ships redelivering in 2015
Four ships redelivering in 2016
9
Summary and Outlook
Summary
Strong quarterly and full year financial performance
Significant progress achieved in the past 12 months - Trust is compliant with its loan covenants
Trust is cash generative, equity accretive and now in a stronger financial
position
Outlook
Three vessels to be redelivered in 2015
- Focus to restart distributions by ensuring revenue generated continue to exceed debt service costs
- Improved performance has resulted in a healthier cash position which
will help facilitate fleet renewal
10
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