First Ship Lease Trust

[Boon]

FY2016 Results:
 
Revenue (USD million):
FY2012 =106.107
FY2013 =  89.993
FY2014 =  93.414
FY2015 =106.583
FY2016 =  98.144
 
NPAT (USD million):
FY2012 = -   8.387
FY2013 = - 65.213
FY2014 =     4.051
FY2015 =   14.147
FY2016 = - 30.955  
 
(FY2016 NPAT was down due to non-cash impairment loss on vessels of 44.137 m).
 
EPS (USD cent) :
FY2012 = - 1.28
FY2013 = - 9.96
FY2014 =   0.62
FY2015 =   2.19
FY2016 = - 4.86
 
(FY2016 EPS was down due to non-cash impairment loss on vessels of 44.137 m).
 
OCF (USD million):  (OCF as % of Revenue)
FY2012 = 78.664      (74%)
FY2013 = 60.701      (67%)
FY2014 = 68.275      (73%)
FY2015 = 78.859      (74%)
FY2016 = 66.971      (68%)
 
(Consistently generated more than 60 m OCF each year over the last 5 years)
 
Cash & Cash Equivalent (USD million) :
FY2012 = 37.488
FY2013 = 20.367
FY2014 = 32.750
FY2015 = 28.834
FY2016 = 42.899
 
Debt (USD million) :
FY2012 = 430.218
FY2013 = 377.492
FY2014 = 317.642
FY2015 = 272.085
FY2016 = 222.313
 
(Debt is at 5-year LOW)
 
Interest Paid (USD million) :
FY2012 =  28.271
FY2013 =  23.411
FY2014 =  15.789
FY2015 =  11.497
FY2016 =    9.577
 
(Interest payment is at 5-year LOW)
 
(Acquisition) / Disposal of vessels  (USD million) :
FY2012 =     0.0
FY2013 =     0.0
FY2014 =  22.261
FY2015 = (22.054)
FY2016 =    9.593
 
DPU (SGD cent) :
FY2012 =    0.0
FY2013 =    0.0
FY2014 =    0.0
FY2015 =    0.0
FY2016 =    0.0
 
NAV (USD cent) :
FY2012 =   48
FY2013 =   41
FY2014 =   41
FY2015 =   44
FY2016 =   39     
 
Number of Shares issued:
FY2012 =  654,665,077
FY2013 =  654,665,077
FY2014 =  654,665,077
FY2015 =  637,456,577
FY2016 =  637,456,577
 
(Note: During FY2015, the Trust repurchased 17,208,500 units and these units were subsequently cancelled in the same year.)
 
Comments:
1)   Revenues over the past 5 years seemed to be range bound between 90 m ~ 106 m
2)   FY2016 NPAT / EPS were down due to non-cash impairment loss on vessels of 44.137 m
3)   However, ability to generate positive OCF remained strong. Over the past 5 years, the business has consistently been able to generate OCF in excess of USD 60 m per year (or on average of USD 64m per year or around USD 10 cent per share). As a result, substantial debt has been repaid, and interest expenses has come down substantially.
4)   By end of FY2017, debt level should be further reduced to around USD 160 m, IMO.
5)   Assuming the USD 160 m debt could be refinanced or rolled over at the end of this year for another 5 years - with yearly principal repayment of USD 32 m, and interest rate of say 5% per annum. This would mean USD 40 m (32 m for principal repayment + 8 m for interest payment) would be needed to service the loan in FY2018.
6)   If OCF generated could be maintained at above USD 60 m over the new tenure of the loan, in theory, it means more than USD 20 m, being the excess OCF generated, after servicing the loan, could be made available for distribution to unit-holders, should the TM agrees to it. This would translate into DPS of SGD 4.0 cents. Against the current share price of SGD 13 cents. It looks CHEAP…
7) Would TM board agree to it ? Ha-ha! That’s another story......
8) Point is: Don't have to fully pare down debt before restoring DPU ...............
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