Farstad Shipping ASA - Results 2Q 2005

Wednesday, 24. August 2005 13:00

Results for the 2nd quarter 2005
Farstad Shipping achieved an operating income of NOK 425.4 million
for the 2nd quarter (NOK 378.6 million for the 2nd quarter 2004). The
operating costs for the period were NOK 218.1 million (NOK 209.1
million). The operating profit (EBIT) was NOK 103.1 million (NOK 61.2
million) after depreciation of NOK 104.2 million (NOK 108.3 million).
Net finance was negative NOK 29.6 million (negative NOK 28.8
million). Currency gain of NOK 56.1 million is booked (gain of NOK
4.8 million). Further an unrealized currency loss of NOK 56.3 million
(gain of NOK 5.0 million) is booked due to the adjustment of the
company's long-term liabilities in foreign currency. The profit after
taxes was NOK 70.0 million (NOK 28.5 million). The Group's cash
flow*) for the period was NOK 234.0 million compared to NOK 135.7
million for the same period in 2004.

Results as per 30.06.2005
The operating income at 30.06 was NOK 807.5 million (NOK 757.9
million). The operating costs were NOK 429.9 million (NOK 425.0
million) and ordinary depreciations NOK 205.7 million (NOK 217.0.
million). The operating profit (EBIT) was NOK 171.9 million (NOK
115.9 million).

Net finance was negative NOK 117.4 million (negative NOK 124.7
million) after an unrealized currency loss of NOK 176.4 million (NOK
67.6 million). A realized currency gain of NOK 120.1 million is
booked during the half year (NOK 22.4 million). The result after
taxes was NOK 54.7 million (deficit of NOK 11.4 million). The Group's
cash flow*) for the period is NOK 436.6 million, compared to NOK
275.8 million for the same period in 2004.

*) Pre-tax profit + depreciation and deferred maintenance + change on
revaluation of long-term liabilities in foreign currency.

Financing and capital structure
In the balance sheet at 30.06.05, interest-bearing mortgage debt and
leasing liabilities together total NOK 3.656.7 million (NOK 3,889.7
million at 30.06.04). Of the company's debt 23.1% is in USD, 18.8% in
GBP, 48.8% in NOK, 3.5% in AUD and 5.8% in EUR. Instalments on debt
and leasing liabilities of NOK 301.1 million have been paid during
the first six months. Interest-bearing current assets at 30.06.05
were NOK 526.6 million (NOK 536.0 million). Dividends of NOK 195
million were paid in May.

The Group's booked equity at 30.06.05 was NOK 2,247.8 million (NOK
2,046.5 million) corresponding to NOK 57.64 (NOK 52.47) per share.
Equity ratio was 36.0% (32.9%).
Based on the valuation of the vessels (charter-free) from 3
independent brokers at 30.06.05, the value-adjusted equity capital
per share before tax was calculated at NOK 101.10 (NOK 80.28). This
gives a value adjusted equity ratio of 49.6% (42.8%). The average
increase in the fleet value has been approx. 2.5% since the year-end.
The oldest part of the fleet shows a minor decrease in value.

The quarterly report has been prepared in accordance with IFRS
(International Financial Reporting Standards) and the accounting
principles used are in accordance with principles used in the last
annual report. In the quarterly report comparative figures in
question for 2004 are restated in accordance with IFRS.

The Fleet
There have been no changes in the fleet during the period.

The AHTS Far Scout and the Far Sky have traded the North Sea spot
market during the period. May and June were particularly good months
on the spot market. The rate level and utilization of the fleet in
the Far East/Australia improved compared to the 1st quarter.

The Market
The demand for supply vessels in the North Sea during the 2nd quarter
was high; 19% higher than the 2nd quarter in 2004, and 11% higher
than in the 1st quarter. However, the available North Sea fleet has
increased considerably, and was 15% higher at 30.06 than at the same
time last year. The increased activity has given an average
utilization of approx. 93% for the total North Sea fleet, resulting
in high rates during parts of the quarter. The average utilization
ratio for the 1st quarter 2004 for the total North Sea tonnage was
approx. 90%. The average for 2nd quarter 2004 was 87%. The market in
Australia/the Far East has continued to show steady improvement.

The basic conditions promise a high activity levels going forward.
The development in the rate level in 2005 and 2006 will depend on
whether the increased activity is sufficient to absorb, in
particular, the number of platform vessels to be delivered. Sustained
high utilization and high rate levels in the North Sea also rely on
other markets continuing to develop positively. Based on the high oil
price, there are positive expectations. In the longer term the number
of rigs on order will positively impact the industry.

The contract coverage for the Farstad-fleet for the 2nd half year is
approx. 89%. For 2006 the contract coverage is now approx. 55%. The
contract coverage is higher for the PSV-fleet than for the AHTS
fleet.

Shareholder matters
The company's share has during the quarter been traded between NOK
74.00 and NOK 85.00 and was NOK 84.75 at the end of the quarter. The
share price at 30.06.05 values the company to approx. NOK 3.3
billion. The share was quoted excl. dividend NOK 5.00 on May 12. The
number of shareholders is approx. 1,600. Foreign shareholders own
approx. 17% of the shares.


The Board of Directors


Contacts:
CEO Terje J.K. Andersen - tel. 90 03 05 11
CFO Torstein L. Stavseng - tel. 91 10 70 01


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Author:
Hugin
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