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First Ship Lease Trust slashes Q4 losses to US$18.5m on lower impairments

FIRST Ship Lease Trust (FSL Trust) nearly halved its losses in the fourth quarter, helped by lower impairment charges in the three months to Dec 31, 2018.

FSL Trust reported a net loss of US$18.5 million, down from US$33.9 million in the same period the year before, in unaudited financial results released on Wednesday evening.

While turnover shrank by 6.8 per cent year on year to US$18.5 million on a reduced fleet size and lower charter revenue, the trust also recorded significant drops in impairment charges on four product tankers and three container ships, as well as a product tanker recognised as a non-current asset held for sale.

Stathis Topouzoglou, chairman of the trust and chief executive of the sponsor, added in a statement that the trust has provided for further impairments on the back of the maritime sector downturn and the high historical book values of FSL Trust's vessels.

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Loss per unit for the quarter was down to 2.91 US cents, from 5.31 US cents before.

FSL Trust's losses for the full year have now been narrowed to US$19 million, from US$73.9 million previously, while revenue was lower by 17.7 per cent, at US$67 million.

Mr Topouzoglou said that the new board, which was reconstituted after a change of sponsor, will continue working with the management team to turn the trust around.

"To this end, significant strategic initiatives have been taken, including the announcements of the rightsissue, the newbuilding acquisitions, and the sponsor bridging loan, demonstrating the sponsor's continuous commitment and support to the trust's future," he said.

No distribution was recommended by the board, which said that, "given the continued challenging conditions in the shipping industry, that the recommencement of distributions would not as yet be a prudent use of the trust's cash resources".