First Ship Lease Trust

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I hope there is no further acquisition. Tanker rates are turning south as new built tankers supply is creeping in.

From my own guessestimates, FSL is likely to repeat its cash generation from ops of 70 mil this FY (no increase due to disposal of 2 containerships). For me, I hope FSL will use the money to accelerate the repayments as the interest for the debt seems to be in the region of 4-5% per annum. So its either FSL pays down debts or buy back shares, this is better imo.

Ops cashflow= about 70 mil
Repayments of debts = 44 mil
Interest = 11.5mil

FCF (excluding vessel acquistion) =2.2 US cents (3 s cents)
FCF/yield = 22% (at 0.132 price)

The only downside is shpping is volatile and a short term charter profile may result in FSL not generating the expected 70 mil
(24-02-2016, 12:34 PM)CY09 Wrote: From my own guessestimates, FSL is likely to repeat its cash generation from ops of 70 mil this FY (no increase due to disposal of 2 containerships).

The two containers originally leased to Evergreen were on a very lucrative contract generating US$10-11 mil in revenues annually - nearly all of which flow to FSLT's cash bottomline as they have almost no cash opex tied those leases.

Looking back at 2015 FSLT only made US$62.8 mil cash from operations which included a full year's worth of contribution from these two containers.

I am keen to learn how you think they will be able to make up a gap of US$17.2 mil this year (US$62.8 - loss of US$10 mil of income from Evergreen) vs target of US$70 mil that you have in mind? The only major fleet addition is FSL Osaka which is supposed to earn only a TCE of 16k per day, not bad but that's only US$5.8 mil p.a. before netting out vessel operating expenses.

Thanks in advance.
FY15 ops cashflow before WC changes was already 77 mil, so I have adjusted it downwards by 7 mil by my own estimates

While its true its likely to lose 11 mil revenue, gain about 6 mil from FSL osaka; it is worth noting in July 15, FSL trust achieved upward revisions for contract rates of three ships - FSL Hamburg, FSL Shanghai, FSL Singapore. The new rates only kicked in about Q4 2015 for FSL Hamburg and FSL Singapore. So there will be upward revenue recognition for them. So likely ops cashflow achieved may be more than my 70 mil forecast but slightly less than 77 mil which was achieved in FY 2015.

Hope it clarifies

For Your Reading Only.

Decent results. Going by the downturn in the oil tanker market and its 1H results, FSL is likely to produce 70 mil cash before WC changes. With its 242 mil bank loan due in Dec 2017, FSL is definitely unable to repay in full its debt+principal. However, if the banks are willing to roll over FSL's debt to 2020 and that the oil tanker market remains buoyant due to low oil prices, FSL will definitely be able to repay in full and become debt free. FSL has no medium term notes/bonds unlike Rickermers.

However with oil tanker market becoming increasingly crowded due to newbuilds (record delivery in 2017), it may be difficult for FSL to sustain 70mil per year cash generation, unless oil continues to remain in the below USD 42 bbl category. FSL will indeed be a good investment if oil can remain within such a low price for the next 3 years. This scenario though unlikely is still plausible, given how much oil is stored on sea and on land currently. However, even i think oil will hit $60 in 2020.

<vested but with a smaller holding>
Holy crap, now they have a relaxing 1:1 debt to equity ratio , steady earnings yet not a dime of distribution for years starved unitholders  Angry
Profit Warning

FSL Trust Management Pte. Ltd., as Trustee-Manager of First Ship Lease Trust , deems it appropriate to issue a profit warning with respect to the financial results of First Ship Lease Trust for the year ended 31 December 2016.

Based on a preliminary review of its draft financial results, FSL Trust expects to report a significant Net Loss for FY2016. The loss is mainly attributable to impairment provisions on vessels and a loss on the disposal of two vessels. 

Despite the accounting loss, FSL Trust continues to generate positive Cash Flow and Income Available for Distribution.

Further details of FSL Trust’s FY2016 performance will be made available on or before 23 February 2017, when final results are released.
Specuvestor: Asset - Business - Structure.
(08-08-2016, 11:49 AM)Gaudente Wrote: Holy crap, now they have this tried and tested pre workout powder and a relaxing 1:1 debt to equity ratio , steady earnings yet not a dime of distribution for years starved unitholders  [Image: angry.gif]

I know, what's up with that?

With a 44 mil impairment, FSL trust has made a loss of 30mil. Stripping of these impairment and loss from disposal of its container ships, FSL Trust net profit has increased by about 15%. Given the falling tanker rates since 2016, we should not expect a repeat of last year's strong performance.

On a whole, FSL trust has generated about 70 mil ops cash flow before WC changes; however, it is likely this year cash flow generated will be lower at the 58-60mil range. This is still enough to cover its loan repayments (44mil) and interest expense (8mil).

Based on this trajectory, the trust will be able to repay all its debts (222 mil) in 5 years. This is barring a collapse of tanker charter rates to 50% of where it is now. To reiterate, the trust is very dependent on where the price of tanker rates MR etc are.

Balance sheet is fairly strong with a debt to equity ratio still at 1, VTL ratio of 140-180%

<exited and re-enter recently>

Auditors flag going concern issues with First Ship Lease Trust
Tuesday, March 21, 2017 

MOORE Stephens, the auditors of the financial statements of First Ship Lease Trust, on Tuesday drew attention to the business trust's full-year net loss of US$31 million for the period ended Dec 31, 2016, as well as the group's current liabilities, which exceeded its current assets by US$179.4 million.

"These conditions indicate the existence of a material uncertainty which may cast significant doubt on the ability of the group and the trust to continue as going concerns and therefore that they may be unable to realise their assets and discharge their liabilities in the normal course of business," the auditors said.

However, the management of the trustee-manager believes that the company has the resources needed to continue to operate, given that the management has prepared a cash-flow projection and is of the view that the group will have sufficient cash resources to satisfy its working capital requirements, and to meet its obligations as and when they fall due.

The group will also continue to receive financial support from its lenders and the refinancing of the current bank loan will be successful, it added.
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.

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