First Ship Lease Trust (FSL Trust) reported a first quarter net profit of $2.3m, despite logging a $4.3m loss on the sale of two panamax container ships. Revenues were up 8% in Q1 2016 at $26.7m compared to $24.8m in the same period a year earlier.
A company announcement reads:
FSL Trust Management Pte. Ltd. (“FSLTM”), as trustee-manager of First Ship Lease Trust (“FSL Trust” or “the Trust”) reported solid performance for the Trust’s first quarter ended 31 March 2016 (“1QFY16”).
1QFY16 revenue of US$ 26.7 million was 8% higher year -on- year against US$ 24.8 million in the FY2015 first quarter (“1QFY15”). The revenue increase was achieved despite the disposal of two panamax containerships in February this year. Net cash generated from operations of US$ 16.1 million for 1QFY 16 was 14% higher than the US$ 14.2 million recorded for 1QFY15.
The Trust achieved a net profit of US$ 2.3 million despite a US$ 4.2 million loss on disposal of the two panamax vessels and a US$1.5m per quarter increased depreciation charge applied against other vessels.
These results represent the eighth consecutive quarter of profitability.
Commenting on the Trust’s performance, Alan Hatton, Chief Executive Officer of FSLTM said:
“The financial performance of the Trust continues to improve. 2015 was a great year and 1Q2016 has built on last year’s achievements. That 1Q2016 was profitable, despite incurring a US$4.2 million loss on disposal of the old panamax container vessels sold in February, is testament to the hard work of the team at the Trustee-Manager in improving the commercial revenues of the fleet while keeping a keen eye on costs and expenses .” “In 1QFY16, bareboat charter equivalent (“BBCE”) revenue grew by 5% year-on-year to US$ 20.2 million. This improvement reflects the higher earnings achieved by vessels employed on time charter and in pools, despite lower bareboat charter revenue following some long-term contract renewals at market rates and the sale of the “Ever Radiant” and “Ever Respect” following their re-delivery in January 2016.”
“The Trust continues to perform strongly. The balance sheet has been strengthened and the Trust’s gearing has been reduced. Despite a challenging shipping environment, the Trust’s diversification and strong mix of secure long-term charters and managed market exposure in better performing sectors, leaves us well positioned in this market.”