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FSL Trust aims to pay distributions in 6-12 months

FSL Trust aims to pay distributions in 6-12 months
First Ship Lease Trust (FSL Trust) is hoping to pay distribution per unit (DPU) again within the next six to 12 months as the shipping trust gradually regains financial stability and moves towards compliance with loan-to-value covenants.

Alan Hatton, ceo of FSL Trust Management, the trustee-manager of FSL Trust, affirmed that a return to paying DPU is a clear objective for the company and looks to start distribution “within the next six to 12 months.”

Hatton added that FSL Trust has been working towards a position where the trust is back in compliance with loan-to-value covenants, as under the deal struck with its banks it cannot pay DPU to unitholders.

“We continue to improve the financial position of the trust and remain focused continuing this trend,” he said.

In the third quarter ended 30 September 2014, Singapore-listed FSL Trust registered a net profit of $744,000, significantly improving from the loss of $8.93m incurred in the same period of last year.

The results mark the second consecutive quarter of profit to be generated by the trust, following a gain of $1m in the second quarter this year, the first profitable quarter in three years.

Revenue during the third quarter rose 5.2% year-on-year to $23.62m due minaly to higher income from time charter and pool charter. The revenue was partially offset by an impairment loss of $1.2m on investments in Torm shares, as well as a revenue loss of about $200,000 due to the scheduled dry-docking of FSL Tokyo, a chemical/oil product tanker.

FSL Trust believed that the third quarter results has illustrated that restructuring efforts by the management team “are bearing fruit.”

In the first nine months of this year, FSL Trust remained in the red with a loss of $3.21m, but the loss has narrowed from a wider deficit of $23.23m in the same period of last year.

Looking ahead, FSL Trust’s revenue could continue to be impacted by scheduled dry-docking, with FSL London due in the fourth quarter, FSL Santos in the third quarter of 2015 and FSL Hamburg in the last quarter of 2015.

“We want to be clear to everyone to manage their expectations for our quarterly performance with our dry-docking events coming up,” Hatton said.

As at 30 September 2014, FSL Trust has a portfolio of 23 vessels consisting of seven containerships, 11 product tankers, three chemical tankers and two crude oil tankers. Among them, 14 vessels are employed on long term bareboat charters and nine are on time charter arrangement and in pool.