First Ship Lease Trust Investor Presentation. FSL Trust Management Pte. Ltd. as Trustee-Manager for FSL Trust

Transcription

1 First Ship Lease Trust Investor Presentation FSL Trust Management Pte. Ltd. as Trustee-Manager for FSL Trust 15 March 2012

2 Disclaimer Certain statements in this presentation may constitute forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words believe, anticipate, intend, estimate, forecast, project, plan, potential, may, should, expect, pending, and similar expressions identify forward-looking statements. Forward-looking statements also include statements about our future growth prospects. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding our earnings, our ability to manage concentration and lessee credit risks, our ability to lease out or dispose vessels, our ability to implement our investment strategy, our dependence on credit facilities and new equity from capital markets to execute our investment strategy, the possibility of insufficient insurance to cover losses from inherent operational risks in the industry, lower lease rates from older vessels, our dependence on key personnel, FSL Holdings Pte. Ltd. s controlling stake in the First Ship Lease Trust ( FSL Trust ), our short operating history, limited historical financial history for the Trust, the risk of government requisitions during periods of emergency or war, the possibility of pirate or terrorist attacks, competition in the industry, political instability where the vessels are flagged or operate, and the cyclicality of the industry and fluctuations in vessel values. For further information, please see the documents and reports that we file with the Singapore Stock Exchange. FSL Trust may, from time to time, make additional written and oral forward-looking statements, including our reports to unitholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on behalf of FSL Trust. 2

3 Overview of First Ship Lease Trust ( FSL Trust ) Company snapshot Business Sponsor Key shareholders of Sponsor Trustee-manager Listing Set up as a Singapore business trust in Mar 07 Provides ship leasing services on a long-term bareboat charter basis to the international shipping industry FSL Holdings Pte. Ltd. ( FSLH ) Schoeller Holdings Ltd FSL Trust Management Pte. Ltd. ( FSLTM ) (majority owned by the Sponsor) Ordinary units listed on SGX-ST since 27 Mar 07 ADR quoted on International OTCQX since 29 Oct 08 (US$ 000) FY09 FY10 FY11 Revenue 98, , ,714 NBV of Vessels 840, , ,879 Total Assets 903, , ,415 Total Debt 488, , ,780 Total Equity 380, , ,979 Equity / Assets 42.2% 41.0% 39.5% As at Feb 12 No of counterparties 7 Average remaining life of the contract 1 6 years No of vessels 2 25 Average age of vessels 3 Market capitalization years US$107.4mm 1 As at 31 Dec 11, based on dollar-weighted average by net book value, excluding 2 product tankers and 3 chemical tankers vessels are on a long-term bareboat charters. 2 product tankers are trading in the spot market and 3 chemical tankers are in the process of redelivery. 3 As at 31 Dec 11, based on dollar-weighted average by net book value. 4 As at 28 Feb unit price of S$0.205 and exchange rate of US$1:S$1.25 3

4 Corporate Structure Public 76% 24% Sponsor FSL Holdings Pte. Ltd. 87% Management 13% FSL Asset Management Pte. Ltd Trust Deed Trustee & Incentive Fees Act for unitholders 100% Management Services Management Fees Trustee Manager FSL Trust Management Pte. Ltd Vessel owning SPCs Management Fees Lease Rentals Vessels Lease Lessees * Business trusts are not required to limit its distributions to its accounting profits as required of Singapore limited companies in respect of dividend payments 4

5 Industry in Turmoil Difficult Trading Market Overcapacity, feeble demand, protracted weak freight rates, high bunker prices Increased Counterparty Risk Defaults and insolvencies Tight Ship Financing Market Banks stressed due to financial & world economic crisis Expect Short Term Pain Cashflow disruption from counterparty defaults 5

6 Industry in Turmoil Increasing Counterparty Risk Oversupply & Weak Demand Low Freight Rates Deteriorating Asset Prices Banks Tightening 6

7 Industry in Turmoil 120 Market has priced in FSL s insolvency. It will NOT HAPPEN 100 STI 0.2% 80 Rickmers 21.5% FSL Trust trading at 67%^ discount to NBV Distribution reduced from US0.95 to US0.10 NOL 31.7% FSL Trust 50.0% 0 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 ^ As at 28 Feb unit price of S$0.205 and exchange rate of US$1:S$1.25 7

8 Our Strengths Asset Owner Diversified Portfolio Healthy Revenue Backlog No Debt Maturity until 2017 Strong Management Team 8

9 Our Strengths - Asset Owner Ship Owner, not Lender Lessor to international ship operators on long term bareboat charters Fleet of 25 high-quality vessels Young (average age of 6.5 years) & re-deployable Long remaining useful economic life with good earnings capability 9

10 Our Strengths - Diversified Portfolio FY2011 Lease Revenue^ ^ Based on operating lease revenue from 23 vessels on bareboat charters and bareboat charter equivalent revenue from 2 product tankers deployed in the spot market. # The 3 chemical tankers will be deployed in a revenue pool within the first half of

11 Our Strengths - Diversified Portfolio 7 Containerships 2 Crude Oil Tankers 2 Dry Bulk Carriers Lessees: Evergreen Marine (2) Schoeller Holdings (2) Yang Ming Marine (3) Lessee: Geden Lines (2) Lessee: Siba Ships (2) 11 Product Tankers 3 Chemical Tankers Lessees: James Fisher (7) TORM (2) Spot Market (2) 11 All chemical tankers will be deployed in a pool within 1H 2012

12 Our Strengths - ~US$500m Lease Revenue Backlog Underpins predictable long-term cash flow Years: US$383 million * total remaining contracted revenue to be generated between 2012 and Remaining Contracted Lease Revenue (US$ million) * Based on 20 vessels on long-term bareboat charters, excluding the 2 product tankers and 3 chemical tankers, and extension and early buyout options. 12

13 Our Strengths - Long Charter Coverage Staggered lease maturities mitigate re-delivery risk, earliest lease maturity in Jun 2014 Remaining Lease Term in Years as at 31 December years * Weighted average remaining lease term Trading in spot market Will be deployed in chemical tanker pool within 1H 2012 * As at 31 December 2011, based on the 20 vessels on long-term bareboat charters and on a dollar-weighted average basis by net book value. Excludes the 2 product tankers and the 3 chemical tankers, and extension and early buyout options. 13

14 Our Strengths - No Debt Maturity until 2017 Refinanced Debt US$479.6m six-year amortising term loan with quarterly amortisation of US$11m 3 out of 8 lenders^ are new to FSL Trust; reflects lender confidence Removes uncertainty and fortifies balance sheet Interest Margin Security-to-Loan ratio >125% 4QFY11 ratio at 130% Loan covenants Debt-service coverage ratio > 1.1:1 Security to loan Ratio Margin over US$ 3 month Libor > 125% to 140% 3.0% >140% to 180% 2.8% >180% 2.6% Maintain minimum cash balance of US$15m Unitholder s equity >30% of total assets ^ The bank lenders are: ABN AMRO Bank N.V., Singapore Branch, ITF International Transport Finance Suisse AG, KfW IPEX-Bank GmbH, Oversea-Chinese Banking Corporation Limited, Sumitomo Mitsui Banking Corporation, Singapore Branch, The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Korea Development Bank, UniCredit Bank AG, Singapore Branch 14

15 Our Strength - Strong Management Team Experienced with a wide network and contacts Forward thinking Distribution cut to conserve cash and strengthen balance sheet to meet challenges and seize opportunities Philip Clausius President & CEO Co-founder of FSL Previously with Schoeller Holdings 19 Years of experience in shipping and ship finance Cheong Chee Tham Senior VP & CFO 12 years with Singapore Airlines Group 19 years of experience in accounting, leasing and asset financing Kwa Lay San Senior VP & Chief Risk Officer 11 years with DBS Bank 13 years of experience in corporate banking with focus on credit & transportation Vijay Kamath Senior VP & Chief Commercial Officer Previously with National Bank of Fujairah 18 years of worldwide experience in shipping & ship finance Rebecca Cheng Legal Counsel & Company Secretary Previously the legal counsel at ComfortDelGro Corporation Ltd. Ng Yoke Yee Financial Controller Started her career in KPMG Financial Controller of EnGro Corporation Limited prior to joining FSLT 15

16 Financials Income Statement Financial highlights (US$ 000) FY2011 FY2010 Y-O-Y % change Revenue 110, , Loss after tax * (17,066) (5,699) NM Income available for distribution 18,293 26,042 (29.8) Distribution per unit (US ) (32.2) * Loss after tax was recorded after accounting for impairment loss of US$22.1m in FY2011 and US$7.9m in FY

17 Financials - Balance Sheet Financial highlights (US$ 000) As at 31 Dec 2011 As at 31 Dec 2010 Long-term assets 785, ,499 Outstanding loans Non-current 428, ,409 Current 44,000 25,240 Unitholders funds 324, ,448 Cash and cash equivalents 32,304 55,846 NAV per share (US$)

18 Financials Cash Flow Statement Financial Highlights (US$'000) FY2011 FY2010 Cash flows from operations Revenue 110, ,494 Vessel operating & voyage expenses (18,275) (5,474) Overheads & changes in working capital (5,367) (4,663) Management & Trustee fees (3,821) (3,738) Proceeds from/(deposit for) legal settlement 6,637 (1,637) 89,888 84,982 Cash flows from investing activities Acquisition of vessels (93,183) - Cash flows from financing activities Net proceeds from secured bank loans 518,780 - Repayment of secured bank loans (506,264) (32,000) Net proceeds from equity placement 15,139 - Distribution to unitholders (23,326) (29,334) Interest paid (24,576) (24,572) (20,247) (85,906) Net decrease in cash & cash equivalents (23,542) (924) Cash & cash equivalents at 1 Jan 55,846 56,770 Cash & cash equivalents at 31 Dec 32,304 55,846 18

19 Financials - Credit Metrics EBITDA Margin (%) EBITDA-to-Interest (x) 11.5x 94.5% 92.9% 96.4% 87.5% 83.0% 3.9x 3.8x 3.4x 3.5x Debt/ Capital (%) Equity/Assets (%) 57.4% 56.2% 57.2% 59.3% 73.0% 25.6% 40.5% 42.2% 41.0% 39.5% Note: Annualised data used for

20 Credit Ratings History of FSL Trust Stable rating through the worst downturn in shipping history Standard & Poor s BB / Negative 23 Nov 09 BB / Negative (CreditWatch) 8 Jun 10 BB / Stable 27 Oct 10 BB / Negative 30 Nov 11 Fitch Ratings BB / Stable 23 Nov 09 B+ / Negative 12 May 10 B+ / Stable 3 Jun 11 B / Negative 5 Mar 12 20

21 Market has Overreacted FSL Trust is Undervalued FSL Trust is Here to Stay. Why? Owns young and deployable vessels Well diversified portfolio Healthy balance sheet with no loan maturity until 2017 Experienced management team 21

22 Positioned for the Upturn Levered to Recovery Vessels trading on spot and in a pool are ready to ride upturn Rate increases expected for product tankers and chemical tankers Tight Bank Financing Alternative financing to thrive Asset Prices becoming Attractive Value accretive acquisitions Access to Banks/Capital Markets Located in Asia with reach to Asian and European banks/institutional investors 22

23 Thank you 23

24 Investor Relations Contacts Worldwide: FSL Trust Management Ms Wylyn LIU Telephone: OakTree Advisers Ms Rita Chay Telephone: Website: 24