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Bunkers at Fujairah averaged approximately $250/mt in the first quarter of 2009 with a high of approximately $280/mt in early January and a low of approximately $226/mt mid March. We have seen an increase in the bunker prices over the last month and present indications are approximately $350/mt according to Platt's. The International Energy Agency ("IEA") reported in April 2009 an average OPEC oil production, including Iraq, of 28.33 million barrels per day during the first quarter of the year, a decrease of about 2.2 million barrels per day from the fourth quarter of 2008. The next and 153rd OPEC meeting is scheduled to take place on May 28th, 2009. According to Fearnleys, the VLCC fleet totalled 519 vessels at the end of the first quarter with 19 deliveries during the quarter. Throughout 2009 it is expected that a total of 68 VLCC deliveries will take place. The total order book amounted to 210 vessels at the end of the first quarter, down from 230 vessels after the fourth quarter of 2008. The current orderbook represents about 40 percent of the VLCC fleet. During the quarter there were no orders made and there were no deletions from the trading fleet. There was however one cancellation. The total single hull fleet amounted to 108 vessels at the end of the first quarter. CORPORATE AND OUTLOOK Three of the Company's VLCCs are fixed on time charters expiring between 2010 and 2012. One of our VLCCs is trading in the spot market. As previously announced, the Company has two Capesize bulk carriers under construction at Daehan Shipbuilding Co. Ltd ("Daehan"). The total contract price is $162 million of which the Company has paid $48.6 million at the end of the first quarter, $32.4 million of these installments have been financed through a bank facility, while the balance of $16.2 million has been financed by equity. We have entered into long-term time charters for employment of these vessels upon their delivery during the third and fourth quarter of 2009. We understand that the yard is participating in a restructuring program together with three local banks. This program has strengthened the yard's ability to deliver vessels according to contract. The Company is currently working to put in place financing for a portion of the remaining installments due on the two newbuildings. Due to the state of the financial markets, the level of debt financing available may not be as high as the Company would consider optimal. Pending clarification of the level of financing available for the newbuildings and despite the strong forward charter cover the Board has agreed to take a conservative stance and has decided not to distribute any dividend this quarter. The full report is available in company website. Knightsbridge Tankers Limited |
VLCCF - Knightsbridge Tankers Limited First Quarter 2009 Results