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FSL Trust achieves nearly fourfold increase in Q3 profit

FSL Trust achieves nearly fourfold increase in Q3 profit
First Ship Lease Trust (FSL Trust) has achieved a nearly fourfold increase in profit for the third quarter compared to the year-ago period as revenue grew.

Profit for the quarter ended 30 September 2015 was recorded at $2.85m compared to the gain of $744,000 in the same period of last year.

The quarterly revenue increased by 20.1% year-on-year to $28.36m due mainly to the improved deployment of the redelivered vessels and the trust’s ability to secure new time charters on higher rates.

“Clearly the corporate strategy outlined earlier this year has proven to be effective and it has enabled the trust to achieve its highest quarterly revenue for two years,” said Alan Hatton, ceo of FSL Trust Management (FSLTM), the trustee-manager of FSL Trust.

The trust recently entered into a memorandum of agreement to acquire a 2007, Japanese-built MR tanker for $21.8m, financed through existing cash reserves. The new acquisition is expected to deliver a cash-on-cash yield of 14.5% per annum based on a conservative time-charter equivalent estimate of $16,500 per day over the next three years.

“The recent MR tanker acquisition was a significant milestone for the trust. It demonstrates the execution of our stated aim of improving revenue and renewing the fleet ahead of the scheduled redelivery of two panamax containership vessels from Evergreen in January 2016,” Hatton said.

As at 30 September 2015, FSL Trust has a fleet of 23 ships consisting of seven containerships, 11 product tankers, three chemical tankers and two crude oil tankers.

The Singapore-listed shipping trust has yet to resume its cash distributions since 2012 when it secured loan-to-value covenants, as under the deal struck with its banks it cannot pay distribution per unit to unitholders.