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FSL Trust returns to profit in 2014

FSL Trust returns to profit in 2014
First Ship Lease Trust (FSL Trust) has returned to profit for the financial year 2014 as charter rates for oil tankers improved significantly in the fourth quarter.

Net profit for the year ended 31 December 2014 was recorded at $4.05m, a reversal from a hefty loss of $65.21m in the previous financial year, Singapore-listed FSL Trust announced.

Revenue in 2014 improved 3.8% year-on-year to $93.41m due mainly to higher vessel charter rates generated in the fourth quarter.

The company’s tankers and containerships registered a combined profit of $7.26m in the fourth quarter of last year as against a loss of $41.98m in the previous corresponding period.

“Commercially, the vessels have been deployed to enable the Trust to benefit from improved tanker spot rates while managing risk and volatility,” said Alan Hatton ceo of FSL Trust Management, the trustee-manager of FSL Trust.

Hatton added that the company’s current stronger financial position “allows the Trust to focus on the future challenges of fleet renewal and new business from a position of compliance.”

In January this year, FSL Trust announced compliance with its original loan agreement dated December 2011 following a covenant relaxation period of two and a half years.

Hatton had said earlier that the Trust is hoping to pay distribution per unit (DPU) again within this year as it regains financial stability and moves towards compliance with loan-to-value covenants.

Last year, FSL Trust incurred an impairment loss of $1.9m for investments in Torm due to a decline in the quoted price of the shares over the period. FSL Trust, however, has liquidated its position in Torm in January, and it is now expected to make a gain of $1.7m which will be recognised in its first quarter 2015 results.

FSL Trust has a portfolio of 23 vessels consisting of seven containerships, 11 product tankers, three chemical tankers and two crude oil tankers. There are also one crude oil tanker and two product tankers redelivering from charters in 2015, and two product tankers and two containerships redelivering in 2016.