VLCCF - Knightsbridge Tankers Limited - Fourth Quarter and Financial Year 2008 Results

Press release, 06.06.2009

HIGHLIGHTS

• Knightsbridge reports net income of $7.8 million and earnings per share of $0.45 for the fourth quarter of 2008.
• Knightsbridge reports annual net income for 2008 of $48.1 million and earnings per share of $2.81.
• Knightsbridge announces a cash dividend of $0.25 per share for the fourth quarter of 2008.

PRELIMINARY FOURTH QUARTER AND FINANCIAL YEAR 2008 RESULTS

Knightsbridge Tankers Limited (the "Company" or "Knightsbridge") reports net income of $7.8 million and earnings per share of $0.45 for the fourth quarter of 2008. The average daily time charter equivalents ("TCEs") earned by the Company's four VLCCs was $43,900 compared with $52,800 in the preceding quarter. The fourth quarter earnings reflect a decrease in the profit share on the vessels Hampstead and Kensington.

The net increase in cash and cash equivalents in the quarter was $3.3 million. The Company generated cash from operating activities of $14.7 million, used $2.2 million to repay loan and credit facilities, invested $0.6 million in its newbuilding project and distributed $8.6 million in dividend payments. In February 2009, the Company has an average cash breakeven rate for its vessels of $19,300 per vessel per day compared to $19,410 in February 2008.

For the year ended December 31, 2008, the Company reports net income of $48.1 million and earnings per share of $2.81, compared with $84.8 million and $4.96, respectively, in 2007. The net income and earnings per share in 2007 include a gain in the amount of $49.1 million and $2.87, respectively, resulting from the sale of a vessel. The average daily TCEs in 2008 were $52,600 compared with $41,700 in 2007. Net interest expense for the year was $0.9 million (2007: $5.3 million) mainly due to the lower debt level.

The net decrease in cash and cash equivalents in 2008 was $4.1 million. The Company generated cash from operating activities of $69.7 million, used $9.0 million to repay loan and credit facilities, invested $17.8 million in its newbuilding project and distributed $47.0 million in dividend payments. Total dividends paid per share in 2008 were $2.75 compared to $2.50 in 2007.

On February 5, 2009, the Board declared a dividend of $0.25 per share. The record date for the dividend is February 18, 2009, ex dividend date is February 13, 2009 and the dividend will be paid on or around March 2, 2009.

THE MARKET

The average market rate for VLCCs from MEG to Japan in the forth quarter was about WS 84 ($61,500 per day) compared to about WS 148 ($96,500 per day) in the third quarter of 2008. The first week of the quarter started with average TCE rates for modern VLCCs, according to Clarkson, of $59,800 per day while the present indications are approximately $40,000 per day.

Bunkers at Fujairah averaged approximately $290/mt in the fourth quarter with a low of approximately $206/mt and a high of approximately $552/mt.

The International Energy Agency (IEA) reported in January 2009 an average OPEC oil production, including Iraq, of 31.4 million barrels per day during the fourth quarter of the year, a decrease of about 1 million barrels per day from the third quarter. The next OPEC meeting is scheduled to take place on March 15, 2009.

According to Fearnleys, the VLCC fleet totalled 501 vessels at the end of the fourth quarter with eleven deliveries during the quarter. There are 6 additional deliveries expected to take place in the first quarter of 2009. The total order book amounted to 227 vessels at the end of the fourth quarter, down from 238 vessels after the third quarter of 2008. The current orderbook represents about 45 percent of the VLCC fleet. Two VLCC's was deleted from the trading fleet whilst no VLCCs were ordered during the quarter. The single hull fleet amounted to 110 vessels at the end of the fourth quarter.

Knightsbridge Tankers Limited