SFL - Second Quarter 2012 Results

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HAMILTON, BERMUDA--(Marketwire -08/28/12)-



Ship Finance International Limited (SFL) - Earnings Release


Reports preliminary 2Q 2012 results and quarterly dividend of $0.39 pershare

Hamilton, Bermuda, August 28, 2012. Ship Finance International Limited("ShipFinance" or the "Company") today announced its preliminary financialresults forthe quarter ended June 30, 2012.

 
Highlights

* The Board of Directors has declared a quarterly dividend
of $0.39 per share.

* $16.3 million, or $0.21 per share, accumulated in cash sweep
from Frontline.

* Fleet renewal continues with seven drybulk newbuildings delivered
over the last year and six older OBOs and VLCCs sold.

* Selected key financial data for the quarter compared to the
Previous quarter:

+-----------------------+-----------------------------+
| | Three Months Ended |
| | |
| | Jun 30, 2012 Mar 31, 2012 |
+-----------------------+-----------------------------+
| Charter revenues((1)) | $185m $186m |
| | |
| EBITDA((2)) | $151m $154m |
| | |
| Net income | $61m $39m |
| | |
| Earnings per share | $0.77 $0.49 |
| | |
| Dividend per share | $0.39 $0.39 |
+-----------------------+-----------------------------+


Dividends and Results for the Quarter Ended June 30, 2012

The Board of Directors has declared a quarterly cash dividend of $0.39 pershare, and Ship Finance has now paid dividends for 34 consecutive quarters.Thedividend will be paid on or about September 28, 2012 to shareholders ofrecordas of September 14, 2012. The ex-dividend date will be September 12, 2012.

The Company reported total U.S. GAAP operating revenues on a consolidatedbasisof $83.6 million, or $1.06 per share, in the second quarter of 2012. Thisnumberexcludes $14.8 million of revenues classified as 'repayment ofinvestments infinance lease', and also excludes $88.0 million of charter revenuesearned byassets classified as 'investment in associate'.

The cash sweep agreement with Frontline had a positive effect of $16.3million,or $0.21 per share in the second quarter. The cash sweep for the full year2012is payable in March 2013, and a total of $29.9 million has accumulatedin thefirst two quarters.

There was a $0.6 million, or $0.01 per share, accrual to the 25% profitsharefor revenues in excess of the original base rates in the quarter.FollowingFrontline's $50 million prepayment of profit share in 2011, another $48millionof profit share will need to accumulate before profit sharerevenues arerecognized in the consolidated accounts.

The Company recorded a $21.7 million book gain relating to thetermination ofthe Horizon Lines charters in the second quarter. The gain includes $16millionrelating to second-lien notes received, $1.7 million relating towarrantsreceived and $4.0 million in fuel and inventory. At the end of thequarter, thebook value of the warrants was reduced by $0.5 million to $1.2 millionthroughan asset impairment charge.

Reported net operating income pursuant to U.S. GAAP for the quarter was$66.4million, or $0.84 per share, and reported net income was $61.2 million, or$0.77per share.

Ole B. Hjertaker, Chief Executive Officer in Ship Finance Management ASsaid ina comment: "We continue to deliver positive results and have paid quarterlycashdividends since our operations began in 2004. Our fleet renewal isprogressingwell and we have sold six older OBOs and VLCCs over the last year andat thesame time taken delivery of seven newbuilding drybulk vessels. We stillhaveanother six newbuildings to be delivered in 2012-2013, but very lowremainingnet capital expenditures after financing.

Mr Hjertaker continued: "The spot market is challenging in many segmentsand fewshipping companies have access to capital for new investments rightnow.Concurrently, we have seen both secondhand and newbuilding prices fallsharplyover the last 12 months, to levels not seen for a decade. While we havebeencautious and not made new investments for some time, the currentmarketenvironment could prove to be an interesting time to investselectively inmodern assets with the aim to build our long-term distribution capacity."

The full report can be found in the link below.

 
August 28, 2012

The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda


Footnotes:

1. Charter revenues includes total charter hire from all vessels andrigs,including assets in 100% owned subsidiaries classified as'Investment inassociates' and cash sweep income.

2. EBITDA is a non- GAAP measure and includes assets in 100% ownedsubsidiariesclassified as 'Investment in associates'. For more details please seeAppendix1: Reconciliation of Net Income to EBITDA.

Forward Looking Statements

This press release contains forward looking statements. Thesestatements arebased upon various assumptions, many of which are based, in turn, uponfurtherassumptions, including Ship Finance management's examination ofhistoricaloperating trends, data contained in the Company's records and otherdataavailable from third parties. Although Ship Finance believes thattheseassumptions were reasonable when made, because assumptions areinherentlysubject to significant uncertainties and contingencies which aredifficult orimpossible to predict and are beyond its control, Ship Finance cannotgiveassurance that it will achieve or accomplish these expectations,beliefs orintentions.

Important factors that, in our view, could cause actual results todiffermaterially from those discussed in the forward-looking statementsinclude thestrength of world economies, fluctuations in currencies and interestrates,general market conditions including fluctuations in charter hirerates andvessel values, changes in demand in the markets in which we operate,changes indemand resulting from changes in OPEC's petroleum production levelsandworldwide oil consumption and storage, developments regarding thetechnologiesrelating to oil exploration, changes in market demand in countries whichimportcommodities and finished goods and changes in the amount and locationof theproduction of those commodities and finished goods, increasedinspectionprocedures and more restrictive import and export controls, changesin ouroperating expenses, including bunker prices, drydocking and insurancecosts,performance of our charterers and other counterparties with whom we deal,timelydelivery of vessels under construction within the contracted price,changes ingovernmental rules and regulations or actions taken by regulatoryauthorities,potential liability from pending or future litigation, generaldomestic andinternational political conditions, potential disruption of shippingroutes dueto accidents or political events, and other important factors describedfromtime to time in the reports filed by the Company with theSecurities andExchange Commission.

Second Quarter 2012 Results:http://hugin.info/134876/R/1636680/526050.pdf

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ship Finance International Limited via Thomson Reuters ONE

[HUG#1636680]

Contact:
Questions should be directed to:
Investor and Analyst
Harald Gurvin
Chief Financial Officer
Ship Finance Management AS
+47 23114009
Magnus T. Valeberg
Senior Vice President
Ship Finance Management AS
+47 23114012
Media
Ole B. Hjertaker
Chief Executive Officer
Ship Finance Management AS
+47 23114011

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