FSL Trust Management Pte. Ltd. (“FSLTM”), the trustee-manager of First Ship Lease Trust (“FSL Trust” or the “Trust”), announced the unaudited financial results of FSL Trust for the 1st quarter ended 31 March 2022.
Adjusted EBITDA1of US$ 1.7 million, up from US$ 1.4 million in the preceding quarter
Net income of US$ 0.2 million, up from US$ 0.1m in the preceding quarter
Contracted revenue of up to US$ 33.8 million2with 8 out of 11 vessels employed under fixed-rate period charters
Low net leverage and healthy balance sheet with 4 vessels debt free
For the 1st quarter 2022, FSL Trust reported a net profit of US$ 0.2 million, compared to a net profit of US$ 0.1 million in the preceding 4th quarter 2021. Adjusted EBITDA1 increased 15%, from US$ 1.4 million in the 4th quarter 2021 to US$ 1.7 million in the 1st quarter 2022. The net profit reflects the slightly improved tanker markets in the 1st quarter 2022, whilst the situation with the chemical tanker FSL London was weighing on the results.
As at 31 March 2022, with 8 vessels operating under fixed-rate period charters, the Trust has contracted revenue of up to US$ 33.8 million, including US$ 26.7 million of firm contracted revenue and US$ 7.1 million of optional contracted revenue, which is almost 3x net interest-bearing debt. With a net leverage3 of 2x and an equity ratio4 of 80%, the Trust maintains its conservative approach towards capital allocation and capital structure, which provides resilience amid the uncertainties due to the elevated geopolitical and global economic risks.
Commenting on the results, Roger Woods, Chief Executive Officer, said:
“The freight market for product tankers and Aframax crude oil tankers has slightly improved in the 1st quarter 2022 and, coupled with the solid result of the specialised tankers in the fleet, the Trust started the year with a small profit. This is despite the financial impact of the ongoing situation of the vessel FSL London being held by customs in India in relation to investigations concerning the specifications of a cargo the vessel carried for a customer, for which the Trust is claiming damages from the charterer of the vessel.”
Stathis Topouzoglou, Chairman of the Board of Directors, commented:
“As we have ended the 1st quarter 2022 with a small profit, the Russian invasion in Ukraine and the consequential international sanctions against Russia, have resulted in increased geopolitical risks and global economic uncertainty. Whilst it is premature to say what the likely medium and long-term effects for the shipping industry in general and the tanker markets in particular will be, FSL Trust’s charter coverage and its healthy capital structure provide downside protection. At the same time, the vessels trading spot or operating in revenue sharing agreements provide market upside participation and flexibility.”