UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES
EXCHANGE ACT OF 1934
For
the month of March 2008
Commission
File Number: 0-22704
|
Ship
Finance International Limited
|
|
(Translation
of registrant’s name into English)
|
|
Par-la-Ville
Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
|
|
(Address
of principal executive office)
|
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F [X] Form 40-F
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)7: ___
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes
[_] No [X]
If
“Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82-______________.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
as Exhibit 1 is a copy of the press release of Ship Finance International
Limited dated February 14, 2008.
Exhibit 1
Ship
Finance International Limited (NYSE: SFL) - Earnings Release
|
Reports
fourth quarter 2007 results and quarterly dividend of $0.55 per
share
|
Reports fourth quarter 2007 results and quarterly dividend of $0.55
per share
Ship
Finance International Limited (“Ship Finance” or the “Company”) announces the
financial results for the quarter ended December 31, 2007.
Highlights
|
·
|
Declared
a quarterly cash dividend of $0.55 per
share.
|
|
·
|
Reported
net income for the quarter of $52.4 million or $0.72 per share, including
profit share of $31.4 million or $0.43 per
share.
|
|
·
|
$6.0
million or $0.08 per share non-cash negative adjustment in mark-to-market
of interest rate swaps, due to lower interest rates at the end of the
fourth quarter compared to the previous
quarter.
|
|
·
|
Fixed-rate
charter hire, excluding profit share contribution was $137.1 million, or
$1.88 per share in the quarter.
|
|
·
|
Announced
the sale of the single hull VLCC Front Duchess and the
double-sided Suezmax tankers Front Birch and Front Maple. Net cash
proceeds from the sales after debt prepayment and compensation to
Frontline Ltd. (“Frontline”) is estimated to be approximately $58.0
million.
|
|
·
|
Six
offshore supply vessels in operation by January 2008. All six vessels are
employed on 12-year charters, representing a total charter backlog of $337
million as of December 31, 2007.
|
|
·
|
New
12-year charters for the 2005-built container vessels Sea Alfa and Sea Beta to an
Asia-based regional liner company, increasing our fixed-rate charter
backlog by $117 million.
|
Dividends
and Results for the Quarter ended December 31, 2007
The
Board of Directors has declared a cash dividend for the fourth quarter of $0.55
per share. The dividend will be paid on or about March 10, 2008 to shareholders
of record as of February 26, 2008. The ex-dividend date will be February 22,
2008.
The
Company reported total operating revenues of $122.3 million or $1.68 per share
in the fourth quarter. Net operating income for the quarter was $91.5 million or
$1.26 per share and net income was $52.4 million or $0.72 per
share.
The
profit share recorded in the fourth quarter was $31.4 million, or $0.43 per
share, up from $5.5 million or $0.08 per share in the third quarter. This is a
combination of $16.1 million, or $0.22 per share, accumulated in the quarter,
and $15.2 million, or $0.21 per share, accumulated in the first quarter of 2007,
but previously not recognized in our income statement.
The
fixed-rate charter hire increased to $137.1 million, or $1.88 per share in the
quarter, up from $132.8 million, or $1.83 per share in the third quarter. Net of
operating expenses and general and administrative expenses in the fourth
quarter, the contribution from the fixed-rate charters was $108.1 million, or
$1.49 per share, compared to $105.4 million, or $1.45 per share in the third
quarter. This excludes profit share contribution.
As
the majority of the Company’s assets are accounted for as finance leases, a
significant portion of the charter hire received does not appear in the Income
Statement. These amounts are classified as ‘repayment of investment in finance
leases’, and are only included in the Statement of Cashflows. For the fourth
quarter, this amounted to $46.2 million or $0.64 per share.
Liquidity
and Capital Expenditure
Net
cash provided by operating activities in the fourth quarter was $33.8 million,
net cash provided by investing activities was $36.5 million and net cash used in
financing activities was $37.5 million.
As
of December 31, 2007, the Company had $164.1 million in available funds,
comprised of $79.4 million in free cash and cash equivalents (including $1.1
million in a 100% owned subsidiary accounted for under the equity method) and
$84.7 million in available credit lines. In the first quarter of 2008, Ship
Finance will receive the $52.5 million profit share for the year ended December
31, 2007. The Company also owns several vessels without any associated debt, and
if required, these vessels can be used as security for new borrowings to fund
the equity portion in new projects.
As
of December 31, 2007, the Company’s capital commitments relating to newbuildings
and acquisitions are estimated as follows:
|
Period:
|
2008
|
2009
|
2010
|
Total
|
|
$327
mill.
|
$276
mill.
|
$98
mill.
|
$701
mill.
|
The
above amounts are net of any seller’s credits. In several of the projects, the
equity from the Company has been paid in already, and a large portion of the
remaining capital commitments will be financed by bank loans. Ship Finance has
the capacity to continue investing in new projects without raising additional
equity capital.
Business Update
After
the completion of recently announced acquisitions and sales, the Company will
have an operating fleet of 57 vessels and rigs and the Company has contracted to
acquire 12 additional newbuildings.
The
gross fixed-rate charter backlog was approximately $5.6 billion as of December
31, 2007, with average charter tenure of 10.4 years, or 13.5 years if weighted
by charter revenue. Some of our charters have purchase options which, if
exercised, will reduce the fixed charter backlog and average charter
tenure.
31
of our crude oil tankers and 8 of our oil/bulk/ore (“OBO”) vessels operate on
long term contracts to Frontline. In addition to the fixed base charter rate,
Ship Finance is also entitled to receive 20% of the time charter equivalent
(“TCE”) earnings for these vessels in excess of the base charter rate. For the
fourth quarter 2007, the average base charter rate was approximately $26,300 for
our VLCC’s and $20,700 for our Suezmax tankers and OBOs. The average vessel
earnings have consistently been above the base charter rates since the Company’s
inception in 2003.
The
average daily TCE earned by Frontline in the fourth quarter in the spot and time
charter period market from the Company’s VLCCs, Suezmax tankers and OBOs were
approximately $48,000, $35,400 and $42,400, respectively. The corresponding
average daily TCEs in the third quarter were approximately $33,000, $27,200 and
$41,300, respectively.
The
spot tanker market was weak going into the fourth quarter and continued at a
relatively low level through October and the start of November. However, in mid
November the VLCC rates rose sharply and continued to strengthen to
exceptionally high levels at the end of December. In January the spot market
softened from the peak, but has remained at firm levels. Based on the forward
freight derivatives market, there is an expectation for a continued strong
tanker market in 2008.
In
November 2007, Ship Finance announced the agreement to acquire two additional
offshore supply vessels from Deep Sea Supply Plc. (“Deep Sea”) in combination
with 12-year bareboat charters back to Deep Sea. The vessels were delivered to
Ship Finance in early January. As part of the agreement Deep Sea re-purchased
one of the vessels previously acquired by Ship Finance, and after this
transaction, we have a total of 6 vessels on long-term charters to Deep Sea. The
vessels are accounted for as operating leases, and the average annual net cash
contribution for the first seven years after estimated interest expense and debt
repayment is estimated to approximately $0.11 per share.
In
October 2007, the Company agreed to sell the single-hull VLCC Front Duchess to an unrelated
third party for net sales proceeds of $54.5 million. Delivery to the new owner
is expected to take place in February or March 2008. The net cash effect is
estimated to be approximately $21.5 million, and the book profit approximately
$2.3 million, and will be recognized in the first quarter of 2008.
In
December 2007, we announced the sale of the double-sided Suezmax tankers Front Birch and Front Maple for total net
sales proceeds of $80.0 million. Front Birch was delivered to
the new owner in early December, and the net cash effect was approximately $18.5
million with a book profit of $6.6 mill. Front Maple was delivered to
the new owner in late January 2008, and the net cash effect was approximately
$18.0 million with an estimated book profit of approximately $6.4 million, which
will be recognized in the first quarter of 2008.
In
January 2008, the Company announced new 12-year charters for the two 1,700 TEU
container vessels Sea
Alfa and Sea
Beta. The vessels will be chartered on time charter basis for the first
year, and thereafter the charters will change to bareboat basis, where the
charterer will pay for all vessel operating costs, including crewing,
maintenance and dry-docking. The accumulated net charter revenues from the new
charters will be approximately $117.4 million, and the charterer has been
granted fixed price purchase options after 8, 10 and 12 years,
respectively.
Corporate
and Other Matters
At
the end of the fourth quarter 2007, $449 million of the 8.5% Senior Notes due
2013 were outstanding. Of this, $122 million were subject to Bond Swap
Agreements at quarter end, and this has subsequently increased to $139
million. The financing cost on the Senior Notes held under Bond Swap
Agreements is effectively reduced to approximately LIBOR plus 1% per
annum.
In
October 2007, the Company’s Board of Directors announced a share repurchase
program. To preserve the Company’s capacity for new asset acquisitions, the
Company has initially used Total Return Swaps (“TRS”) to effectively achieve the
economic effect of repurchasing shares. The shares are technically owned by the
banks who provide the TRS agreements, and no shares have been cancelled. As of
December 31, 2007, the Company controlled approximately 349,000 shares through
the TRS agreements, and this has subsequently increased to approximately 692,000
shares. Average cost basis for the shares is $25.66 per share.
The
Board has approved a Dividend Reinvestment Plan and a Direct Stock Purchase Plan
to facilitate individual shareholders who wish to invest in shares in the
Company on a regular basis. All relevant details for how investors may join this
plan will be announced in a separate press release.
Strategy
and Outlook
After
the completion of recently announced acquisitions and sales, the Company will
have an operating fleet of 57 vessels and rigs, and the Company has contracted
to acquire 12 additional newbuildings. The strategy of the Company is to
increase its portfolio of assets and to employ its assets on medium to long-term
contracts to support a predictable long-term dividend capacity.
The
Company will seek to reduce the risks for its shareholders by investing in
different sectors of the shipping and oil service industry and by having a
diversified client base. During 2007, the Company has committed to new
investments of $1.1 billion and these investments have increased the Company’s
fixed charter income and dividend capacity.
The
current uncertainty in the financial markets is in many respects positive for
Ship Finance as the Company sees an increasing number of transaction
opportunities. In these market conditions, the banks focus their attention and
capacity on key clients with strong balance sheets, like Ship Finance.
Therefore, the Company continue to see competitive financing terms for new
projects.
In
a more volatile capital market, we believe an additional strength is that we
have a fully financed fleet without the need for additional equity capital to
finance our existing commitments. Our strategy will then be to continue to grow
the fleet with new accretive transactions, and in the current market environment
we see more deal opportunities with better return characteristics than
before.
Forward
Looking Statements
This
press release contains forward looking statements. These statements are based
upon various assumptions, many of which are based, in turn, upon further
assumptions, including Ship Finance management's examination of historical
operating trends. Although Ship Finance believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond its control, Ship Finance cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Important
factors that, in the Company's view, could cause actual results to differ
materially from those discussed in this press release include the strength of
world economies and currencies, general market conditions including fluctuations
in charter hire rates and vessel values, changes in demand in the tanker market
as a result of changes in OPEC's petroleum production levels and world wide oil
consumption and storage, changes in the Company's operating expenses including
bunker prices, dry-docking and insurance costs, changes in governmental rules
and regulations or actions taken by regulatory authorities, potential liability
from pending or future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to accidents or
political events, and other important factors described from time to time in the
reports filed by the Company with the United States Securities and Exchange
Commission.
February
14, 2008
The
Board of Directors
Ship
Finance International Limited
Hamilton,
Bermuda
Questions
should be directed to:
Lars
Solbakken: Chief Executive Officer, Ship Finance Management AS
+47
23114006 / +47 91198844
Ole
B. Hjertaker: Chief Financial Officer, Ship Finance Management AS
+47
23114011 / +47 90141243
SHIP
FINANCE INTERNATIONAL LIMITED
FOURTH
QUARTER 2007 REPORT (UNAUDITED)
|
Three
months ended
|
Twelve
months ended
|
|||
|
(in
thousands of $ except per share data)
|
December
31, 2007
|
December
31, 2006
|
December
31, 2007
|
December
31, 2006
|
|
(audited)
|
||||
|
Charter
revenues - operating lease
|
19,251
|
10,384
|
55,680
|
58,019
|
|
Charter
revenues - finance lease
|
117,872
|
113,901
|
461,943
|
426,131
|
|
-
less revenues classified as Repayment of investment in finance leases
(1)
|
(46,228)
|
(37,279)
|
(173,193)
|
(136,760)
|
|
Profit
share income
|
31,354
|
35,914
|
52,527
|
78,923
|
|
Other
operating income
|
21
|
96
|
1,835
|
(1,655)
|
|
Total operating revenues (1)
|
122,270
|
123,016
|
398,792
|
424,658
|
|
Gain
/ -loss on sale of assets
|
6,573
|
(324)
|
41,669
|
9,806
|
|
Voyage
expenses
|
204
|
179
|
921
|
1,736
|
|
Ship
operating expenses
|
26,201
|
30,469
|
106,240
|
117,957
|
|
Administrative
expenses
|
2,578
|
3,805
|
7,783
|
6,584
|
|
Depreciation
|
8,362
|
2,857
|
20,636
|
14,490
|
|
Total
operating expenses
|
37,345
|
37,310
|
135,580
|
140,767
|
|
Operating
income
|
91,498
|
85,382
|
304,881
|
293,697
|
|
Interest
income
|
1,468
|
819
|
6,781
|
3,978
|
|
Interest
expense
|
(34,681)
|
(29,877)
|
(130,401)
|
(113,588)
|
|
Results
in associate
|
233
|
243
|
923
|
267
|
|
Other
financial items
|
(6,162)
|
1,269
|
(14,460)
|
(3,733)
|
|
Foreign
currency exchange gain / -loss
|
4
|
12
|
(17)
|
219
|
|
Taxes
|
-
|
(42)
|
-
|
(42)
|
|
Net
income
|
52,360
|
57,806
|
167,707
|
180,798
|
|
Basic
earnings per share ($)
|
$0.72
|
$0.79
|
$2.31
|
$2.48
|
|
Weighted
average number of shares
|
72,743,737
|
72,743,737
|
72,743,737
|
72,764,285
|
|
Common
shares outstanding
|
72,743,737
|
72,743,737
|
72,743,737
|
72,743,737
|
|
(1)
|
For
all vessels on finance lease, the fixed charter payments are split in
three elements; ‘Interest income’, ‘Repayment of investment in finance
leases’ and ‘Service income’. The ‘Interest income’ and the ‘Service
income’ are included in the Company’s Income Statement. ‘Repayment of
investment in finance leases’ is not included in the Total operating
revenues in the Income Statement, and appears in the Statement of
Cashflows and in the Balance Sheet as a reduction of the balance
“Investment in finance leases”.
|
SHIP
FINANCE INTERNATIONAL LIMITED
FOURTH
QUARTER 2007 REPORT (UNAUDITED)
|
BALANCE
SHEET
|
December
31, 2007
|
December
31, 2006
|
|
(in
thousands of $)
|
(audited)
|
|
|
ASSETS
|
||
|
Short
term
|
||
|
Cash
and cash equivalents
|
78,255
|
64,569
|
|
Restricted
cash
|
26,983
|
12,937
|
|
Amount
due from related parties
|
42,014
|
63,024
|
|
Other
current assets
|
186,343
|
166,623
|
|
Long
term
|
||
|
Newbuildings
and vessel purchase options
|
46,259
|
7,658
|
|
Vessels
and equipment, net
|
583,244
|
238,891
|
|
Investment
in finance leases
|
1,963,470
|
1,958,691
|
|
Investment
in associate
|
4,530
|
3,698
|
|
Deferred
charges
|
16,922
|
16,848
|
|
Other
long-term assets
|
2,008
|
20,738
|
|
Total
assets
|
2,950,028
|
2,553,677
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||
|
Short
term
|
||
|
Short
term and current portion of long term interest bearing
debt
|
179,428
|
144,451
|
|
Other
current liabilities
|
42,804
|
14,793
|
|
Amount
due to related parties
|
5,693
|
14,411
|
|
Long
term
|
||
|
Long
term interest bearing debt
|
2,090,566
|
1,770,749
|
|
Other
long term liabilities
|
17,060
|
8,743
|
|
Stockholders’
equity (1)
|
614,477
|
600,530
|
|
Total
liabilities and stockholders’ equity
|
2,950,028
|
2,553,677
|
|
(1)
|
As
of December 31, 2007 Stockholders’ equity excludes $226 million of
deferred equity which is being recognised over time. In connection with
the initial and subsequent acquisitions of vessels from Frontline, Ship
Finance has accounted for the difference between the historical cost of
the vessels and the net investment in the lease as a deferred equity
contribution. This deferred equity contribution is shown as a reduction in
the net investment in finance leases in the balance sheet. This results
from the related party nature of both the transfer of the vessel and the
subsequent charter. This deferred equity is amortised to Stockholders’
equity in line with the charter payments received from
Frontline.
|
SHIP
FINANCE INTERNATIONAL LIMITED
FOURTH QUARTER 2007 REPORT (UNAUDITED)
FOURTH QUARTER 2007 REPORT (UNAUDITED)
|
STATEMENT
OF CASHFLOWS
|
Three
months ended
|
Twelve
months ended
|
||
|
(in
thousands of $)
|
December
31, 2007
|
December
31, 2006
|
December
31, 2007
|
Dec.
31, 2006
|
|
(audited)
|
||||
|
OPERATING
ACTIVITIES
|
||||
|
Net
income
|
52,360
|
57,806
|
167,707
|
180,798
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||
|
Depreciation
and amortisation
|
8,830
|
3,710
|
23,554
|
17,559
|
|
Adjustment
of financial derivatives to market value
|
5,545
|
(963)
|
12,557
|
6,375
|
|
Gain
on sale of assets
|
(6,573)
|
-
|
(41,669)
|
(26,469)
|
|
Result
in associate
|
(234)
|
(2,292)
|
(923)
|
(4,205)
|
|
Stock
based compensation
|
315
|
49
|
785
|
49
|
|
Other
|
(22,893)
|
(1,070)
|
(51,278)
|
(5,140)
|
|
Change
in operating assets and liabilities
|
(3,572)
|
(17,292)
|
91,684
|
24,530
|
|
Net
cash provided by operating activities
|
33,778
|
39,948
|
202,417
|
193,497
|
|
INVESTING
ACTIVITIES
|
||||
|
Repayment
of investments in finance leases
|
46,228
|
37,279
|
173,193
|
136,760
|
|
Net
placement of restricted cash
|
(4,313)
|
(2,013)
|
(14,046)
|
(11,362)
|
|
Proceeds
from sale of vessel/new buildings
|
23,832
|
37,863
|
152,659
|
75,606
|
|
Acquisition
of subsidiaries, net of cash acquired
|
-
|
-
|
-
|
(34,810)
|
|
Net
investment in newbuildings
|
(2,246)
|
(56,750)
|
(47,383)
|
(7,658)
|
|
Purchase
of vessels
|
(26,987)
|
-
|
(644,287)
|
(266,750)
|
|
Investment
in associate companies
|
(1)
|
2,008
|
92
|
508
|
|
Purchase
of short term investment
|
-
|
-
|
3,000
|
(3,000)
|
|
Other
investments
|
-
|
(3,000)
|
(2,008)
|
-
|
|
Net
cash (used in) provided by investing activities
|
36,513
|
15,387
|
(378,780)
|
(110,706)
|
|
FINANCING
ACTIVITIES
|
||||
|
Repurchase
of shares
|
-
|
-
|
-
|
(7,212)
|
|
Proceeds
from long-term debt
|
57,125
|
91,588
|
620,225
|
312,588
|
|
Expenses
paid in connection with securing finance
|
(329)
|
219
|
(3,432)
|
(1,047)
|
|
Repayment
of long-term debt
|
(54,264)
|
(74,050)
|
(265,430)
|
(190,716)
|
|
Cash
dividends paid
|
(39,997)
|
(38,554)
|
(159,335)
|
(149,123)
|
|
Deemed
dividends paid
|
-
|
(1,644)
|
(1,979)
|
(15,569)
|
|
Net
cash provided by (used in) financing activities
|
(37,465)
|
(22,441)
|
190,049
|
(51,079)
|
|
Net
(decrease) increase in cash and cash equivalents
|
32,826
|
32,894
|
13,686
|
31,712
|
|
Cash
and cash equivalents at start of period
|
45,429
|
31,675
|
64,569
|
32,857
|
|
Cash
and cash equivalents at end of period
|
78,255
|
64,569
|
78,255
|
64,569
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorised.
Ship
Finance International Limited
|
Dated: March
5, 2008
|
By:
|
/s/ Lars
Solbakken
|
|
|
Name:
|
Lars
Solbakken
|
||
|
Title:
|
Chief
Executive Officer
|
||
|
Ship
Finance Management AS
|
|||
SK
23153 0001 861521