First Ship Lease Trust › newsroom › 20170428_180404_… · 28/04/2017 · 53.2. 36.0. 47.6. FY...
Transcript of First Ship Lease Trust › newsroom › 20170428_180404_… · 28/04/2017 · 53.2. 36.0. 47.6. FY...
First Ship Lease TrustTenth Annual General Meeting
28 April 2017
2016: Year in review
Questions & Answers
Summary
Recent developments
Operational performance
2016: Key milestones
3
Successful renewal of bareboat contracts for Shannon Fisher & Solway Fisher
16.1 15.1 13.2 13.2
32.9
39.4 39.7 42.9
0
5
10
15
20
25
30
35
40
45
50
55
Net cash generated from operations Cash balance
1Q FY2016 2Q FY2016 3Q FY2016 4Q FY2016
Disposal of two panamaxcontainerships (Ever Radiant and Ever Respect)
24% increase in quarterly net profit & continued positive cash generation despite 3 dry dockings (*)
Over US$50 million of debt repaid over the past 12 months
US$
mill
ion
(*) Chemical tankers - FSL New York, FSL London and FSL Tokyo were dry-docked in 3Q FY2016
2016: Financial highlights
(US$ million) 4
Revenue Net cash generated from operations
Profit / (Loss) for the year Results from operating activities
98.1
106.6
93.490.0
106.1
FY 2016 FY 2015 FY 2014 FY 2013 FY 2012
57.662.8
53.2
36.0
47.6
FY 2016 FY 2015 FY 2014 FY 2013 FY 2012
(31.00)
14.15
4.05
(65.21)
(8.39)
FY 2016 FY 2015 FY 2014 FY 2013 FY 2012
(17.66)
23.35 16.80
(40.63)
19.28
FY 2016 FY 2015 FY 2014 FY 2013 FY 2012
2016: Gearing, Bank Debt and Value-to-Loan
5
Bank debt has been reduced from US$425 million in June 2013 to US$192 million as atMarch 2017
Bank debt by December 2017 will be further reduced to US$171 million by twoscheduled quarterly US$10.7 million repayments in June and September
Gearing ratio has improved from 57.6% in FY2012 to 47.3% in FY2016
VTL remains within Lender Covenant of 125% despite vessel valuations decliningconsiderably during 2016 and 2017 to date
Unit price performance(1)
6
Unit Price Performance Over The 3-Year Period
Previous 3 Years (27/04/2014 – 27/04/2017)
Open (SG cts) 10.3
High (SG cts) 19.3
Low (SG cts) 8.1
Close (SG cts) 10.3
Average Daily Traded Volume (Units)
706,652
Source: Bloomberg (27 April 2017)
0
0.05
0.1
0.15
0.2
0.25
Refinancing
Refinancing is a priority of the Trustee-Manager
Fleet now has an average age of 10 years
Raising finance is more straightforward on newer tonnage Repayment schedules often shorter on older vessels But fleet is well employed and producing solid cash flows
Efforts to reduce outstanding loan balance and ensure no covenant breach
Prepayment of US$8 million from sale of two panamax containershipsin January 2016
Prepayment of US$20 million under the Syndicated Loan Facility inMarch 2017
FSL Osaka pledged to lenders in March 2017
Discussions with potential lenders (new and current) are ongoing
7
Enhanced share issue mandate
On 13 March 2017, SGX announced that it would allow companies to seeka general mandate for an issue of pro-rata renounceable rights shares of upto 100% of share capital
This is up from 50% previously
The Enhanced Rights Issue Limit is in the interests of the Trust and itsunitholders
Allows the Trust to raise funds expediently for expansion activities orworking capital
Be more responsive to global developments in a volatile and uncertainindustry landscape
8
2016: Year in review
Questions & Answers
Summary
Recent developments
Operational performance
2016 vs 2015 BBCE revenue
10
1,44
2
2,58
0
103
5,78
7
3,58
1
7,29
7
7,37
4
1,18
3
910
5,84
8
5,84
8
6,68
5
6,68
5
6,68
5
3,11
2
1,85
2
3,15
0
1,25
9
1,32
3
1,30
4
1,54
8
1,64
3
1,64
3
1,64
3
3,62
3
3,69
1
2,77
4
5,26
3
5,62
1
5,91
4
5,92
8
552
894
377
377
6,68
5
6,68
5
6,68
5
2,41
1
2,58
1
3,25
5
1,26
3
1,26
3
877
1,20
2
1,64
3
1,64
3
1,64
3
151.2% 43.1%
2593.2%
-9.1% 57.0%
-19.0% -19.6%
-53.3%-1.8%
-93.6% -93.6%
0.0% 0.0% 0.0%
-22.5%
39.4%
3.3%
0.3%-4.5% -32.7% -22.4%
0.0% 0.0% 0.0%
(200)
800
1,800
2,800
3,800
4,800
5,800
6,800
7,800
FSL H
ambu
rg
FSL S
inga
pore
FSL O
saka
FSL H
ong
Kong
FSL S
hang
hai
TORM
Mar
gret
he
TORM
Mar
ie
FSL B
usan
FSL S
anto
s
Ever
Rad
iant
Ever
Res
pect
YM E
min
ence
YM E
lixir
YM E
nhan
cer
FSL N
ew Y
ork
FSL L
ondo
n
FSL T
okyo
Cum
bria
n Fi
sher
Clyd
e Fi
sher
Shan
non
Fish
er
Solw
ay F
ishe
r
Spec
ialit
y
Seni
ority
Supe
riorit
y
FY 2015 FY 2016
Total BBCE revenue from vessels :
FY 2016 : 72.849 millionFY 2015 : 80.527 million
Decrease of 9.5%
MR tanker Aframax tanker LR2 tanker Containership Chemical tanker Specialised product tankerFeeder
2016: Fleet deployment by revenue(1)
Note 1: BBCE revenue for the year ended 31 December 2016 11
Fixed-rate BBC42%
Time Charter25%
Pool/ RSA/ Spot17%
Floating BBC16%
2016 vs 2015 Operational performance and market trend
Source: Clarkson
Panamax Containership (YM Eminence, YM Elixir and YM Enhancer)
12
(34.5%)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
31.8
20.8
11.8
10.9
10.1
9.5
8.3
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n Revenue decreased by 34.5% following the sale of two Evergreencontainer vessels in Feb 2016
(34.5%)
Source: Clarkson
LR2(TORM Margrethe and TORM Marie)
13
-
5,000
10,000
15,000
20,000
25,000
30,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
31.8
14.7
20.8
11.8
10.9
10.1
9.5
8.3
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
Revenue down by 19.3% due to softening rates in the LR2 market
(19.3%)
2016 vs 2015 Operational performance and market trend
Source: Clarkson
Aframax(FSL Hongkong and FSL Shanghai)
14
31.8
14.7
9.4
20.8
11.8
10.9
1.5
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
(19.3%)
+16.1%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
Revenue increased by 16.1% as a result of timely securing of strong rates on time charter fixtures
2016 vs 2015 Operational performance and market trend
Feeder containership
15
31.8
14.7
9.4
4.1
20.8
11.8
10.9
10.1
9.5
8.3
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
(19.3%)
+16.1% +144.9%
Source: Clarkson
MR (FSL Hamburg, FSL Singapore and FSL Osaka)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
Addition of FSL Osaka to the fleet and strong rates secured on time charter fixtures contributed to 144.9% increase in revenue
2016 vs 2015 Operational performance and market trend
16
Feeder containership
16
31.8
14.7
9.4
4.1
10.4
20.8
11.8
10.9
10.1
9.5
8.3
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
(19.3%)
+16.1% +144.9% (8.0%)
Source: Clarkson
Specialised Product Tanker (Speciality, Seniority, Superiority, Cumbrian Fisher,
Clyde Fisher, Solway Fisher and Shannon Fisher)
-
5,000
10,000
15,000
20,000
25,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
8% decrease in revenue due to renewal of bareboat contracts for Shannon Fisher and Solway Fisher at a lower daily rate
2016 vs 2015 Operational performance and market trend
Source: Clarkson
17
Chemical Tanker (FSL New York, FSL London and FSL Tokyo)
Feeder containership
31.8
14.7
9.4
4.1
10.4
8.1
20.8
11.8
10.9
10.1
9.5
8.3
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
(19.3%)
+16.1% +144.9% (8.0%)+1.7%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
Revenue increased by 1.7% despite dry-docking of three chemical tankers in Q3FY16
2016 vs 2015 Operational performance and market trend
Source: Clarkson
Feeder Containership (FSL Busan and FSL Santos)
18
Feeder containership
31.8
14.7
9.4
4.1
10.4
8.1
2.1
20.8
11.8
10.9
10.1
9.5
8.3
1.5
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
(19.3%)
+16.1% +144.9% (8.0%)+1.7%
(30.6%)
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2012 2013 2014 2015 2016
1 Year TCE Rate (USD per day) Last 5 Years Average TCE Rate (USD per day)
Revenue declined by 30.6% amid continued slowdown in the container market
2016 vs 2015 Operational performance and market trend
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2012 2013 2014 2015 2016
USD
per
day
Comparison of 1 Year TCE Rates by Vessel Type
Panamax Containership
Aframax
LR2
MR
Specialised Tanker
Chemical Tanker
Feeder Containership
Source: Clarkson
19
Feeder containership
31.8
14.7
9.4
4.1 10
.4
8.1 2.1
20.8
11.8
10.9
10.1
9.5
8.3
1.5
0
5
10
15
20
25
30
35
Panamaxcontainership
LR2 Aframax MR Specialised tanker Chemical tanker Feeder containership
FY2015 FY2016
BBCE
–U
S$ m
illio
n
(34.5%)
(19.3%)
+16.1% +144.9% (8.0%)+1.7% (30.6%)
2016 vs 2015 Operational performance and market trend
Industry Overview:
• Container market remains challenging
Between 2015 and 2016, panamaxrates fell by 58%, while feeder rates dropped by 23%
Softening rates in these sectors weighed on the Trust’s revenue
• Tanker markets under increased pressure
Rates in the aframax, LR2, MR and specialised tanker segments have decreased over the past year
Slight uptick in chemical tanker rates
Revenue backlog
Remaining contracted revenue stood at US$ 101m (1)
as at 31 December 2016
Note 1: Based on revenue from ten bareboat charters (excluding the TORM charters on variable rates) and from time charter contracts with Tesoro (FSL Hong Kong) and Trafigura (FSL Singapore, FSL Hamburg and FSL Shanghai)
20
26 22 22
13
18
0
5
10
15
20
25
30
35
40
45
50
2017 2018 2019 2020-2021
Bareboat Charter Time charter
US$
mill
ion
2016: Year in review
Questions & Answers
Summary
Recent developments
Operational performance
The start of 2017
Debt reduction through utilisation of available cash
Prepayment of US$20 million under the Syndicated Loan Facility to reduce outstanding loan balance
Pledging of FSL Osaka to lenders
The Trust remains within all Loan Covenants
Focus on securing good contract cover for the remaining five vessels that are expected to be redelivered in FY2017
Completed dry docking of two Aframax tankers in 2Q FY2017
This will impact the Trust’s profitability and cashflow generation in the period
Discussions are in progress with a number of Financial Institutions in respect of the refinancing of the Trust’s Syndicated Loan Facility
22
2017 2018 2019 2020 2021 2022 2023
23
Vessel portfolio
Vessels on fixed-rate bareboat charters
Market-rate bareboat charters
Fixed-rate time charters
Feeder containership pool with HANSE
Fixed-rate time charters / (RSA)
Chemical tanker pool with Nordic Tankers
MR pool with Hafnia
Vessels on fixed-rate bareboat charters
Vessel Year build Size (DWT)
Product TankersCumbrian Fisher 2004 12,921 Clyde Fisher 2005 12,984 Shannon Fisher 2006 5,421 Solway Fisher 2006 5,421 Speciality(1) 2006 4,426 Seniority(1) 2006 4,426 Superiority(1) 2007 4,426 TORM Margrethe 2006 109,672 TORM Marie 2006 109,672 FSL Hamburg 2005 47,496 FSL Singapore 2006 47,470 FSL Osaka 2007 45,998
Containerships (size in TEU)YM Eminence 2008 4,250 YM Elixir 2008 4,250 YM Enhancer 2008 4,250 FSL Busan 2003 1,221 FSL Santos 2003 1,221
Crude oil tankersFSL Hong Kong(2) 2007 115,000 FSL Shanghai 2007 115,000
Chemical tankersFSL New York 2006 19,970 FSL London 2006 19,996 FSL Tokyo 2006 20,938
Note: (1) Signed extension agreements for bareboat charter with James Fisher in April 2017 (2) Entered into Revenue Sharing Agreement (RSA) with Teekay with effect from April 2017
FY2017: Scheduled Redeliveries
In 2Q FY2016, the Trust successfully renegotiated a five year fixed-rate bareboat charter renewalfor Shannon Fisher and Solway Fisher at market adjusted bareboat rates
The Trust agreed to employ FSL Hong Kong in the Teekay Group RSA post dry-docking and havesigned extension agreements for the continuing bareboat charter for Speciality, Superiority andSeniority in April 2017
Five vessels (as above) are expected to be redelivered in FY2017 Charterer has the option of extending the time charters for FSL Shanghai, FSL Hamburg and FSL Singapore
three months prior to the end of the base period Discussions for the renewal of bareboat charters for Cumbrian Fisher and Clyde Fisher have commenced
24
Vessel Date
FSL Shanghai 3Q FY2017
FSL Hamburg 4Q FY2017
FSL Singapore 4Q FY2017
Cumbrian Fisher 4Q FY2017
Clyde Fisher 4Q FY2017
2016: Year in review
Questions & Answers
Summary
Recent developments
Operational performance
Summary
2016 performance was stable despite a smaller fleet and difficult operatingenvironment : Cash and cash equivalents increased by 48.8% Four quarters of positive cash generation in 2016
Steps were taken to consolidate the position of the Trust Successful renewal of five-year bareboat charter agreements (Shannon
Fisher and Solway Fisher) contributing to consistent revenue Entered 2017 with stronger balance sheet and lower gearing
Prospects for 2017 Refinancing remains the key priority Focus on securing good contract cover for the remaining five vessels
expected to be redelivered in FY2017
26
2016: Year in review
Questions & Answers
Summary
Recent developments
Operational performance