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Bunkers at Fujairah averaged approximately $345/mt in the second quarter of 2009 with a high of approximately $424/mt at the end of June and a low of approximately $252/mt on April 1st. We have seen high bunker prices over the last week and current indications are approximately $430/mt according to Platt's IEA estimates that world oil demand averaged 83.1 million barrels per day in the second quarter of 2009, 1.36 million barrels less than in the first quarter of 2009. IEA predicts that the average demand for 2009 in total will be 83.8 million barrels per day, a 2.9 percent decline from 2008. According to industry sources, the VLCC fleet totalled 511 vessels at the end of the second quarter with 16 deliveries during the quarter, an increase of 1.2 percent from the previous quarter when the fleet totalled 505. Throughout 2009 it is expected that a total of 73 VLCC deliveries will take place. The total order book amounted to 200 vessels at the end of the second quarter, down from 217 vessels after the first quarter of 2009, including one cancellation. The current orderbook represents about 39 percent of the VLCC fleet. During the quarter no new orders were made and there were 10 deletions from the trading fleet, of which one was demolished and the rest conversions to non-tanker regular trade. According to Fearnleys, the total single hull tanker fleet stands at 91 vessels at the end of the quarter. CORPORATE AND OUTLOOK The total contract price for the two newbuildings is $162 million of which the Company has paid $97.2 million at the end of the second quarter. $32.4 million of these installments have been financed through a short term bank facility, which will be repaid upon delivery of the vessels, while the balance of $64.8 million has been financed by equity. As announced in the first quarter, the Company has been working to put in place financing for the remaining instalments of $64.8 million due on the two newbuildings and Knightsbridge has secured long term, bank financing in the amount of $60 million. The Capesize MV Battersea is expected to be delivered from Daehan Shipyard on the 26th of August and concurrently enter her time-charterparty with Sanko Steam Ship of Tokyo. The Company expects the MV Belgravia to be delivered during the fourth quarter of 2009. 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. Although the Company has secured financing, the level of debt is not considered optimal. 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 Company announces that its 2009 Annual General Meeting will be held in Bermuda on September 25, 2009. The Notice of Annual General Meeting and associated material will be distributed to shareholders shortly. The Company currently has an authorized share capital of $200,000 consisting of 20,000,000 common shares of $0.01 par value each and issued share capital of $170,000 consisting of 17,100,000 common shares of $0.01 par value each. At the Annual General Meeting, the Board will ask the Company's shareholders to approve an increase in the authorized share capital to $350,000 consisting of 35,000,000 common shares of $0.01 par value each. This increase will give the Company the ability and flexibility to raise equity at such time as the Board of Directors considers appropriate and necessary. The approval of the resolution to increase the Company's authorized share capital requires a majority of all votes attached to the Company's issued and outstanding common shares The Board believes the approval of this resolution is important to the Company and encourages shareholders to read the material provided and vote accordingly. Knightsbridge Tankers Limited |
VLCCF - Second Quarter 2009 and Six Months Results