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FSL Trust sees red in 2016 on impairment loss of $44m

FSL Trust sees red in 2016 on impairment loss of $44m
First Ship Lease Trust (FSL Trust) has sank into the red for 2016 as the shipping trust took a $44.14m impairment loss on eight ships.

Net loss for the year was recorded at $31m, a reversal of fortune from the profit of $14.15m in 2015.

In view of deteriorating vessel values amid challenging market conditions, FSL Trust recognised a non-cash impairment of $44.14m on eight ships – five containerships, two tankers and one product tanker, contributing to the full year loss.

Last year’s revenue fell by 7.9% year-on-year to $98.14m due mainly to a reduced fleet size following the disposal of two panamax containerships as well as downward pressure on rates in some tanker markets and the feeder container sector.

The company has not set aside income for distribution per unit (DPU).

As at 31 December 2016, FSL Trust operated a portfolio of 22 ships consisting of five containerships, 12 product tankers, three chemical tankers and two crude oil tankers.

“To mitigate the impact of the shipping downturn, we will continue to strengthen the trust’s charter book and enhance fleet employment to secure quality contract cover through 2017 and beyond,” said Roger Woods, acting ceo of FSL Trust Management, the trustee-manager of FSL Trust.

“It remains our top priority to secure refinancing for our syndicated loan facility, which matures at the end of 2017, and our short term focus is to optimise the commercial deployment and operational performance of the nine vessels that are expected to be redelivered in FY2017, in order to capitalise on market upsides that may arise in the future,” Woods said.

Woods took over as acting ceo on 2 February following the resignation and abrupt departure of the former ceo Alan Hatton. Hatton resigned over alleged misconduct and breach of duties uncovered by the company’s board of directors.

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