FSL Trust Achieves a Turnaround $10.1 Million Net Profit for FY 2019


Published Feb 5, 2020 4:48 PM by The Maritime Executive

FSL Trust Management Pte. Ltd. (“FSLTM”, SGX:D8DU), as Trustee-Manager of First Ship Lease Trust (“FSL Trust” or “the Trust”), announces its results for the fourth quarter and financial year ended 31 December 2019 (“4QFY19” and “FY 2019”). The Trust achieved a net profit of $10.1 million (“FY 2019”), a turnaround from a loss of $19.0 million in the previous year (“FY 2018”).

In light of the strong performance in FY 2019, the Trust has called for a distribution per unit (“DPU”) of 1.50 US cents for the fourth quarter. Unitholders can expect to receive the distribution on 13 March 2020. The closure of Transfer Books and Register of Unitholders is 5.00 pm on 13 February 2020.

During the year under review, the Trust continued to achieve growth in earnings. In FY 2019, revenue rose 9.0 percent from FY 2018 to $73.1 million. The Trust has also recorded net cash generated from operations of $38.6 million in FY 2019.

For 4QFY19, the revenue of the Trust was $22.2 million, 19.8 percent higher compared to 4QFY18. The Trust strategically employed part of the fleet in spot-trading pools and as such managed to benefit from the fourth quarter market upturn, fuelled by tighter tonnage supply and positive market sentiment ahead of IMO2020 regulations.

As a result, FSL Trust reported a net profit in 4Q FY19 of $3.5 million (net loss recorded in 4QFY18 at $18.5m) and a positive net cash generated from operations of $14.0 million.

Improved Operational Performance

Expenses from FY 2019 operations decreased 28.3 percent to $56.2 million, from US$78.4 million in FY 2018. As for 4Q 2019, the Trust’s expenses from operations were lowered by 50.7% as compared to 4Q 2018, from $35.5 million to $17.5 million. This was mainly attributable to lower depreciation expenses and vessel impairments.

Total bareboat charter equivalent (“BBCE”) revenue for 4Q FY19 increased by 31.7 percent year-on-year to $16.3 million, while total BBCE revenue for FY 2019 increased by 14.0 percent to $49.8 million from $43.7 million in FY 2018, due to stronger market rates.

Commenting on the results, Roger Woods, Chief Executive Officer, said: “With the full support and engagement of the Sponsor and Board, the management team was able to improve our performance and has taken advantage of the market improvements, which led to generate positive cash flow for 4QFY19 as well. The Trust remains cautiously optimistic in our 2020 outlook and will continue to focus on operating performance and vessel portfolio management to maximize returns.”

Stathis Topouzoglou, Chairman of the Trust, said: “The significant improvement of the tanker market in the fourth quarter of the year complemented the board’s and management’s ongoing efforts and marked the complete turnaround of the Trust. We are therefore pleased to be in a position to deliver on our promise given during 2018 to our trusted unitholders, by recommencing distributions with a proposed DPU of 1.50 US cents. While the tanker market remains strong, we’ll endeavor to continue capitalizing on the improved asset values and in parallel will actively explore future market opportunities and strategic alternatives for the benefit of our unitholders.”

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