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FSL Trust records surge in full year profit

FSL Trust records surge in full year profit
First Ship Lease Trust (FSL Trust) has achieved a more than threefold increase in its full year 2015 net profit over the previous year, aided by higher revenue from increased vessels charter income.

Profit for its financial year ended 31 December 2015 spiked to $14.15m from the gain of $4.05m in 2014.

Revenue also grew by 14.1% year-on-year to $106.58m thanks to the improved commercial deployment of its fleet.

“FY2015 was a good year for the trust and steps have been taken to ensure that we enter 2016 with significantly more contract coverage, having taken advantage of the stronger tanker market environment over the last 12 months,” said Alan Hatton, ceo of FSL Trust Management, the trustee-manager of FSL Trust.

Looking ahead, the shipping trust said it expects to recognise a loss on disposal of $4.2m in the first quarter of 2016 in relation to two panamax containerships, Ever Radiant and Ever Respect. The recoverable value of these ships dropped considerably since 31 December 2015 as steel price fell.

“The trust acted quickly to sell the Ever Radiant and Ever Respect upon redelivery from charterers, Evergreen Marine. The market value of such vessels has fallen dramatically over the past few months, so it was essential to expedite the disposal of the units,” Hatton explained.

“Securing significant contract cover for our tanker vessels in FY2015 did much to replace the bareboat charter equivalent revenue that the vessels had been providing until late January 2016,” he added.

The Singapore-listed shipping trust has yet to resume its cash distributions since 2013 when it secured loan-to-value covenants.