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 November , 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 November 2, 2004.
Knightsbridge Tankers Limited
Interim Report September 2004
THIRD QUARTER AND NINE MONTH RESULTS
Knightsbridge Tankers Limited (the "Company") reports net income of $17.8
million and earnings per share of $1.04 for the third quarter of 2004. In March
2004, the Company's long-term bareboat charters with Shell International expired
and the vessels commenced trading under new employment regimes. 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. The average daily time charter equivalents
("TCEs") earned by the Company's five VLCCs was $53,800 compared with $50,800 in
the immediately preceding quarter.
Net interest expense for the quarter was $1.8 million compared with $2.3 million
for the quarter ended September 30, 2003. In August 2004 the interest rate swap,
which fixed 91% of the outstanding debt, matured. At September 30, 2004, 100% of
bank debt is floating rate debt.
The net decrease in cash and cash equivalents in the quarter was $1.9 million.
The decrease had resulted from cash generated from operating activities of $13.1
million, cash provided for compensation on redelivery in the amount of $0.7
million and net cash of $2.9 million used to repay the Company's loan facility
less dividend payments of $12.8 million. As of October 28, 2004, the Company has
an average cash breakeven rate for its vessels of $15,411 per vessel per day.
For the nine months ended September 30, 2004 the Company reports net income of
$55.9 million and earnings per share of $3.27. The average daily TCE's for the
nine months ended September 30, 2004 was $68,700. Net interest expense for the
period was $6.4 million (2003 comparable nine months: $6.7 million).
On November 2, 2004, the Board declared a dividend of $1.00 per share. The
record date for the dividend is November 15, 2004, ex dividend date is November
11, 2004 and the dividend will be paid on or about November 29, 2004. The timing
and amount of future 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 second quarter of 2004
continued into the third quarter at even higher levels. Except for a brief, weak
period in the beginning of September, the market from the Middle East to the Far
East stayed above Worldscale (WS) 100 for the whole quarter. The average WS rate
Arabian Gulf to East was about 119 versus 110 in the second quarter. This
equates to a daily timecharter equivalent of about USD 67,000 per day. The
continued strong market was a result of the high world oil demand especially
into China, and improving world economic activity in general. All the additional
demand was met by increased production in the Middle East, resulting in
increased ton miles.
According to IEA, the average OPEC oil production, including Iraq, in the third
quarter of 2004 was approximately 29.3 million barrels per day (b/d), an
increase from the first quarter when they produced about 28.1 million b/d.
During the quarter OPEC continued their policy of `producing what is needed to
supply the market', but despite this oil prices continued to climb to record
levels.
IEA estimates that world oil demand averaged 82.0 million b/d in the third
quarter, an increase of approximately 3.5 percent from the third quarter of
2003. IEA further predicts that the average demand for 2005 will be 83.9 million
b/d. Many oil analysts are still concerned that demand might end up being higher
than production capacity this coming winter.
The world VLCC fleet totalled 441 vessels at the end of the third quarter 2004,
an increase of 5 vessels or 1.4 percent over the quarter. One VLCC was scrapped
in the period and 6 were delivered. The total order book is now at 88 vessels up
from 85 after the second quarter. This represents approximately 20 percent of
the current VLCC fleet. A total of 9 VLCC's were ordered during the quarter.
The tanker market looks healthy for the remainder of the year. The freight
futures market seems to be very optimistic, 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$148,000 per day on VLCC, and US$75,000 per day for next year.
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.
November 2, 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
KNIGHTSBRIDGE TANKERS LIMITED THIRD QUARTER REPORT (UNAUDITED)
2003
2003 2004 INCOME STATEMENT 2004 2003 Jan-Dec
Jul-Sept Jul-Sept (in thousands of $) Jan-Sept Jan-Sept (audited)
- ----------------- ------------------- -------- -------- ---------
10,152 28,481 TOTAL OPERATING REVENUES 93,132 52,620 75,246
Operating expenses
- 3,733 Voyage expenses 10,089 - -
- 2,989 Ship operating expenses 6,756 - -
219 266 Administrative expenses 894 645 864
4,398 4,290 Depreciation 12,915 13,195 17,593
4,617 11,278 TOTAL OPERATING EXPENSES 30,654 13,840 18,457
OTHER INCOME/(EXPENSES)
9 126 Interest income 263 29 55
(2,255) (1,949) Interest expense (6,742) (6,704) (9,332)
(106) 2,401 Other financial items (76) (316) (50)
(2,352) 578 Net other income/(expenses) (6,555) (6,991) (9,327)
3,183 17,781 NET INCOME (LOSS) 55,923 31,789 47,462
17,100 17,100 AVERAGE NUMBER OF ORDINARY 17,100 17,100 17,100
SHARES OUTSTANDING
$ 0.19 $1.04 EARNINGS PER SHARE ($) $3.27 $1.86 $2.78
BALANCE SHEET
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2003
2004 2003 Dec 31
(in thousands of $) Sept 30 Sept 30 (audited)
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ASSETS
Short term
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Cash and cash equivalents 36,124 6,286 6,312
Other current assets 12,497 10,222 22,665
Long term
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Vessels and equipment, net 305,803 - -
Vessels under capital lease, net - 323,806 319,408
Deferred charges and other long-term assets 408 151 58
TOTAL ASSETS 354,832 340,465 348,443
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
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Short term interest bearing debt 11,200 - 125,397
Other current liabilities 4,378 2,209 7,519
Long term
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Long term interest bearing debt 123,200 125,397 -
Other long term liabilities - 7,745 -
Stockholders' equity 216,054 205,114 215,527
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 354,832 340,465 348,443
2003
2003 2004 STATEMENT OF CASHFLOWS 2004 2003 Jan-Dec
Jul-Sept Jul-Sept (in thousands of $) Jan-Sept Jan-Sept (audited)
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OPERATING ACTIVITIES
3,184 17,781 Net income (loss) 55,923 31,789 47,462
Adjustments to reconcile net
income to net cash provided by
operating activities
4,491 4,310 Depreciation and amortisation 13,009 13,473 17,593
Adjustment of financial
- (2,477) derivatives to market value - - -
- - Other - - 372
Change in operating assets and
9,335 (6,504) liabilities 12,336 (43) (12,487)
Net cash provided by operating
17,010 13,110 activities 81,268 45,219 52,940
INVESTING ACTIVITIES
- 690 Compensation on vessel redelivery 690 - -
Net cash provided by investing
- 690 activities 690 - -
FINANCING ACTIVITIES
Proceeds from long-term debt,
- - net of fees paid 140,000 - -
- (2,894) Repayments of long-term debt (131,441) - -
(11,115) (12,825) Dividends paid (60,705) (39,159) (46,854)
Net cash used in financing
(11,115) (15,719) activities (52,146) (39,159) (46,854)
Net increase/(decrease) in cash
5,895 (1,919) and cash equivalents 29,812 6,060 6,086
Cash and cash equivalents at
391 38,043 start of period 6,312 226 226
Cash and cash equivalents at end
6,286 36,124 of period 36,124 6,286 6,312
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 November 3, 2004 By /s/ Kate Blankenship
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Kate Blankenship
Secretary
01655.0002 #523169