The trustee-manager of First Ship Lease Trust D8DU (FSL Trust) D8DU has announced a net profit of US$3.7 million ($4.97 million) for its FY2023 ended Dec 31, 2023, a 72.3% decrease compared to its net profit of US$13.3 million for the previous financial year.
For 2HFY2023, the trust reported a net profit of US$1.9 million, down 83.3% compared to a net profit of US$11.0 million in 2HFY2022.
Earnings per share decreased to 0.21 US cents in FY2023 from 0.75 cents in FY2022.
Notably, FSL Trust’s sale of three vessels in FY2022 contributed US$9.2 million to its total net profit that financial year.
FSL Trust’s vessel currently comprises eight tankers of different sizes, all of which are employed under fixed-rate period charters. The combined portfolio of vessels had an average age of approximately 18 years and a dollar weighted average remaining lease period of approximately two years, excluding optional extension periods and early termination options.
With the entire current fleet operating under fixed-rate period charters, the trust has a firm contracted future revenue of US$18.8 million up to 2029, as well as an additional US$5.8 million of optional contracted revenue.
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“The trust additionally benefited from the profit share on one vessel, which gives a small exposure to the market upside. We are pleased that the close relationship with our main customer continues to benefit the trust with this secure employment,” says CEO Roger Woods.
Stathis Topouzoglou, chairman of the trust’s board of directors, says that although FSL Trust had been focusing on selectively identifying and thoroughly assessing new project opportunities to create accretive value for its unitholders in FY2023, the current shipping environment has not favourable at all.
“It is highly challenging and increasingly risky, characterised mainly by historically high price levels for both secondhand vessels and newbuildings, combined with uncertain developments still evolving around emission targets and the future vessel fuels,” he says.
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Accordingly, in the absence of any meaningful investment opportunities in the foreseeable future, Topouzoglou says the trust has decided to return the bulk of its unrestricted cash holdings to unitholders by way of a distribution and to accelerate repayment of debt.
As such, FSL Trust has declared a distribution per unit of 1.5 US cents for 2HFY2023, payable on March 28.
FSL Trust ended its FY2023 with a liquidity position of US$32.2 million.
Units in FSL Trust closed 0.1 cents lower or 2.17% down at 4.5 cents on Feb 7.
