FSL – BT

First Ship Lease Trust’s US$12.1m Q4 distribution beats IPO forecast

FIRST Ship Lease Trust (FSLT) is to distribute US$12.1 million to unit-holders for the fourth quarter ended Dec 31, 2007, 13.6 per cent better than the projection made during its initial public offering (IPO) in March last year.

The Q4 distribution represents 100 per cent of the amount available for distribution. Distribution per unit (DPU) is 2.42 US cents compared with a forecast 2.13, and works out to 9.68 cents on an annualised basis. The Q4 DPU is also 8.5 per cent higher than that for the preceding quarter.

Based on Jan 15’s closing unit price of $1.20 and assuming a Singapore dollar/US dollar exchange rate of $1.431, this translates into a distribution yield of 11.5 per cent.

Revenue for the quarter came up to US$15.2 million, 31.4 per cent higher than the initial projection. The increase in DPU of 0.19 US cent over the preceding Q3 was made possible mainly by incremental cash flow resulting from the purchase and leaseback of two product tankers from Groda Shipping and Transportation in November.

‘We are very pleased with our achievements for the fourth quarter where revenue continued to grow compared to the preceding quarter and was significantly higher than what we projected at IPO,’ said Philip Clausius, chief executive of FSLT’s trust-manager FSL Trust Management.

FSLT had an initial portfolio of 13 vessels at listing. This has expanded to 18 vessels as at Dec 31, 2007, comprising four containerships, nine product tankers, three chemical tankers and two dry bulk carriers.

The trust aims to continue pursuing acquisition opportunities as part of its growth strategy but FSLT’s revenue base is still quite dependent on container ships and product tankers. It is, however, working to better diversify its portfolio, said chief financial officer Cheong Chee Tham.

It is on track to accomplish its IPO target of US$200 million asset acquisitions within 12 months of its listing date and has raised the target to US$300 million for financial year 2008. So far, US$158 million worth of vessels which are subject to long-term leases have been acquired.

FSLT’s books closure date is Jan 24 and payout will be made on Feb 22. The trust closed two cents lower at $1.18 yesterday.