UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May , 2004
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Knightsbridge Tankers Limited
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(Translation of registrant's name into English)
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [_]
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- __________
Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 1 is a copy of the Press Release to Shareholders of
Knightsbridge Tankers Ltd. (the "Company") dated May 14, 2004, announcing its
first quarter 2004 earnings.
EXHIBIT 1
KNIGHTSBRIDGE
[LOGO OMITTED]
TANKERS LIMITED
Knightsbridge Tankers Limited
Interim Report January - March 2004
FIRST QUARTER RESULTS
The Board of Knightsbridge Tankers Limited (the "Company") is pleased to report
the highest quarterly earnings ever for the Company. The Company reports net
income of $23.4 million and earnings per share of $1.37 for the first quarter of
2004. The average daily time charter equivalents ("TCEs") earned by the
Company's five VLCCs was $86,185 compared with $59,688 in the immediately
preceding quarter.
Net interest expense for the quarter was $2.3 million (2003 comparable quarter:
$2.2 million). At March 31, 2004 approximately 89 per cent of bank debt was
fixed, decreased from 100 per cent at December 31, 2003. In the first quarter
there was a $4.3 million charge to other financial items that is a non cash
charge attributable to the market value adjustment on the interest rate swap. In
the quarter, the interest rate swap was re-designated from being a `perfect
hedge' as a result of the refinancing of the existing loan facility.
Consequently mark to market adjustments will be recorded in the statements of
operations rather than as an adjustment to accumulated other comprehensive
income as in prior periods.
The net increase in cash and cash equivalents in the quarter was $36 million.
The increase had resulted from cash generated from operating activities of $35.5
million and net proceeds of $14.2 million from refinancing the Company's loan
facility less dividend payments of $13.7 million.
As of May 14, 2004, the Company has an average cash breakeven rate for its
vessels of $18,886, including interest rate swap payments that will be incurred
prior to its expiry in August 2004.
CORPORATE AND OTHER MATTERS
In the first quarter of 2004, the Company's long-term bareboat charters with
Shell International expired and the Company's five VLCCs were redelivered to the
Company during March. In conjunction with the charter terminations, the existing
conditional sale and lease arrangements were terminated and the vessels were
renamed and reflagged to the Marshall Islands upon redelivery to the Company.
Three of the vessels have been contracted under medium-term time charters, of
which two include market related profit sharing arrangements, and two vessels
are operating in the spot market.
In connection with the redelivery of the vessels, the Company refinanced the
existing $125.4 million debt facility with a $140 million facility. This new
facility is repayable in twenty-eight quarterly instalments of $2.8 million each
and a final instalment of $61.6 million due on the last payment date. The
facility provides for payment of interest on the outstanding principal balance
at the annual rate of LIBOR plus a margin.
On May 14, 2004, the Board declared a dividend of $2.00 per share. The record
date for the dividend is May 24, 2004, ex dividend date is May 20, 2004 and the
dividend will be paid on or about June 7, 2004. Following the expiration of the
charters with Shell International and the employment of the Company's vessels in
a combination of spot market and medium-term time charter business, the Company
intends to pay distributions on a quarterly basis. The timing and amount of
distributions will be dependent upon the Company's earnings, financial
condition, cash requirements and availability and other factors.
THE MARKET
The strong VLCC market that we experienced in the last quarter of 2003 continued
in the first quarter of 2004. Except for brief dips at the beginning and very
end of the quarter, the market from the Middle East to the Far East stayed above
WS 100 for the whole quarter. This was the result of continued high world oil
demand due to seasonal cold weather in the U.S and Europe, continued strong
growth in the demand for oil into China, and improving world economic activity.
In addition, logistical problems with exports from Russia deteriorated further,
and this reduction in the Russian export had to be replaced from the Middle East
resulting in increased ton miles for the world VLCC fleet. Finally, oil
production in Venezuela has still failed to reach pre-strike levels, the
shortfall being covered from the Middle East, again resulting in increased ton
miles.
According to IEA, the average OPEC 10 oil production (which excludes Iraq) in
the first quarter of 2004 was approximately 25.8 million barrels per day (b/d),
while the official OPEC 10 quota in the same period was 24.5 million b/d. On the
10th of February, OPEC announced that they would cut their quota by 1.0 million
b/d with effect from April 1st in order to compensate for the expected
seasonally weaker demand for oil. Current estimates from IEA are that OPEC 10
have produced an average of about 1.9 million b/d more than their official
quotas in April, a trend that is expected to continue through the second quarter
especially in view of the current exceptionally strong crude oil prices.
IEA estimates that world oil demand averaged more than 81 million b/d in the
first quarter, an increase of 2.3 percent from the first quarter of 2003.
Industry analysts have expected a seasonal decrease in the demand in the second
quarter, but at present more and more analysts are announcing that they have
underestimated the demand for oil. Thus, the downward adjustment in the present
quarter will most probably be less than originally expected.
The world tanker fleet totalled 295.3 million dwt at the end of the first
quarter 2004, an increase of 2.1 percent over the quarter. The world VLCC fleet
increased marginally from 433 to 435 vessels. The total orderbook expanded to 83
vessels as a total of 15 VLCC's was ordered during the quarter. This represents
19 percent of the current VLCC fleet. Three VLCC's were scrapped in the same
period.
The tanker market looks healthy for the remainder of the year. At present we are
far enough into the second quarter to say that the crash in earnings that many
observers were predicting did not take place. The freight futures market seems
to be reflecting this view, and at the moment it is possible to sell freight
futures for the rest of the year at a level that equates to approximately
US$55,000 per day on VLCC.
FORWARD LOOKING STATEMENTS
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance, and underlying assumptions and
other statements, which are other than statements of historical facts.
Knightsbridge desires to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. The words
"believe," "except," "anticipate," "intends," "estimate," "forecast," "project,"
"plan," "potential," "will," "may," "should," "expect" "pending and similar
expressions identify forward-looking statements.
The forward-looking statements in this document are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, our management's examination of historical
operating trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors, important factors that, in our view,
could cause actual results to differ materially from those discussed in the
forward-looking statements include the strength of world economies and
currencies, general market conditions, including fluctuations in charterhire
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 Knightsbridge's operating expenses, including bunker prices,
drydocking and insurance costs, the market for Knightsbridge's vessels,
availability of financing and refinancing, 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 Knightsbridge with the Securities and Exchange Commission.
May 14, 2004
The Board of Directors
Knightsbridge Tankers Limited
Hamilton, Bermuda
Questions should be directed to:
Contact: Ola Lorentzon
+ 46 703 998886
Inger M. Klemp
+ 47 23 11 40 76
Kate Blankenship
+ 47 971 53 563
KNIGHTSBRIDGE TANKERS LIMITED FIRST QUARTER REPORT (UNAUDITED)
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INCOME STATEMENT 2004 2003 2003
(in thousands of $) Jan-Mar Jan-Mar Jan-Dec
(unaudited) (unaudited) (unaudited)
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Operating revenues 36,561 23,046 75,246
Voyage expenses 1,302 - -
Ship operating expenses 601 - -
Administrative expenses 376 208 864
Operating income before depreciation 34,282 22,838 74,382
Depreciation 4,358 4,398 17,593
Operating income after depreciation 29,924 18,440 56,789
Interest income 26 6 55
Interest expense (2,300) (2,218) (9,332)
Other financial items (4,279) (105) (50)
Net income (loss) 23,371 16,123 47,462
Average number of ordinary shares outstanding 17,100 17,100 17,100
Earnings per Share ($) $ 0.94
$1.37 $2.78
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BALANCE SHEET 2004 2003 2003
(in thousands of $) Mar 31 Mar 31 Dec 31
(unaudited) (unaudited) (unaudited)
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ASSETS
Short term
Cash and cash equivalents 42,347 78 6,312
Other current assets 22,424 23,203 22,665
Long term
Vessels and equipment, net 315,050 - -
Vessels under capital lease, net - 332,603 319,408
Deferred charges and other long-term assets 346 336 58
Total assets 380,167 356,220 348,443
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest bearing debt 11,200 8,400 125,397
Other current liabilities 9,640 2,166 7,519
Long term
Long term interest bearing debt 128,800 116,997 -
Other long term liabilities - 10,630 -
Stockholders' equity 230,527 218,027 215,527
Total liabilities and stockholders' equity 380,167 356,220 348,443
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STATEMENT OF CASHFLOWS 2004 2003 2003
(in thousands of $) Jan-Mar Jan-Mar Jan-Dec
(unaudited) (unaudited) (unaudited)
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OPERATING ACTIVITIES
Net income (loss) 23,371 16,122 47,462
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortisation 4,358 4,398 17,593
Adjustment of financial derivatives to market 4,295 - -
value
Other 61 93 372
Change in operating assets and liabilities 3,377 (13,066) (12,487)
Net cash provided by operating activities 35,462 7,547 52,940
FINANCING ACTIVITIES
Proceeds from long-term debt, net of fees paid 139,650 - -
Repayments of long-term debt (125,397) - -
Dividends paid (13,680) (7,695) (46,854)
Net cash used in financing activities 573 (7,695) (46,854)
Net decrease in cash and cash equivalents 36,035 (148) 6,086
Cash and cash equivalents at start of period 6,312 226 226
Cash and cash equivalents at end of period 42,347 78 6,312
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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.
Knightsbridge Tankers Limited
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(Registrant)
Date May 14, 2004 By /s/ Kate Blankenship
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Kate Blankenship
Secretary
01655.0002 #486585