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, 2005
Knightsbridge Tankers 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 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 9th, 2005.
Interim Report January - March 2005
FIRST QUARTER RESULTS
The Board of Knightsbridge Tankers Limited (the "Company") is pleased to report
net income of $17.1 million and earnings per share of $1.00 for the first
quarter of 2005. The average daily time charter equivalents ("TCEs") earned by
the Company's five VLCCs was $56,900 compared with $84,300 in the immediately
preceding quarter. These reduced earnings reflect the relative weakening of the
tanker market in the first quarter of 2005 compared with the exceptionally high
rates experienced in the fourth quarter of 2004. Net interest expense for the
quarter was $0.9 million (2004 comparable quarter: $2.3 million) and at March
31, 2005, all of the Company's debt is floating rate debt. As of May 2, 2005,
the Company has an average cash breakeven rate for its vessels of $15, 895.
The net decrease in cash and cash equivalents in the quarter was $1.1 million.
The Company generated cash from operating activities of $31.7 million, used $2.9
million to repay debt and credit facilities and paid dividends of $29.9 million.
On May 6, 2005, the Board declared a dividend of $1.50 per share. The record
date for the dividend is May 19, 2005, ex dividend date is May 17, 2005 and the
dividend will be paid on or about June 1, 2005.
THE MARKET
The strong VLCC market that we experienced in the fourth quarter of 2004
weakened in the first quarter of 2005. The market experienced a strong
correction in January and rates did not bottom out until we reached Worldscale
("WS") 70 level. However, in February and March the market rebounded and stayed
at about WS 150 for the remaining part of the quarter. The average WS rate
Arabian Gulf to East was about 107 compared with 257 in the fourth quarter of
2004. This equates to a daily time charter equivalent of approximately $55,000
per day. The weakening of the market, and the cutback in OPEC production, came
despite a continued growth in oil demand particularly in China. The cutbacks had
a psychological effect on the market, and this resulted in a larger correction
in the freight market than could be explained just on the basis of demand for
transportation services.
According to IEA, the average OPEC oil production, including Iraq, in the first
quarter of 2005 was approximately 28.9 million barrels per day (b/d), a decrease
of about 2.2 percent from the fourth quarter 2004 when they produced about 29.5
million b/d. OPEC had expected an overproduction and a gradual softening of the
prices during the quarter, but in spite of the record high oil prices it appears
that demand remained firm and OPEC had to announce an increase in their
production in March
IEA estimates that world oil demand averaged 84.6 million b/d in the first
quarter, an increase of 0.1 percent from the fourth quarter of 2004. IEA further
predicts that the average demand for 2005 will be 84.3 million b/d. There are
still oil analysts that think that IEA are conservative in their estimates and
that demand will be considerably higher.
The world trading VLCC fleet totalled 451 vessels at the end of the first
quarter 2005, an increase of seven vessels or 1.6 percent over the quarter. No
VLCCs were scrapped in the period and seven were delivered. The total order book
is now at 83 vessels down from 86 after the fourth quarter of 2004. This
represents 19.1 percent of the current VLCC fleet. A total of four VLCCs were
ordered during the quarter.
The tanker market continues to look healthy. The freight futures market is still
optimistic, and it is possible to sell freight futures for the remainder of the
year 2005 at a level that equates to TCEs of approximately $57,000 for VLCCs,
and for $49,000 for 2006
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 9, 2005
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 FIRST QUARTER REPORT (UNAUDITED)
- --------------------------------------------------------------------------------
INCOME STATEMENT 2005 2004 2004
(in thousands of $) Jan-Mar Jan-Mar Jan-Dec
(unaudited) (unaudited) (unaudited)
- --------------------------------------------------------------------------------
OPERATING REVENUES 29,369 36,561 135,695
Voyage expenses 3,811 1,302 14,240
Ship operating expenses 3,102 601 9,868
Administrative expenses 229 376 1,114
OPERATING INCOME BEFORE DEPRECIATION 22,227 34,282 110,473
Depreciation 4,221 4,358 17,219
OPERATING INCOME AFTER DEPRECIATION 18,006 29,924 93,254
Interest income 307 26 449
Interest expense (1,185) (2,300) (7,877)
Other financial items (16) (4,279) 13
NET INCOME (LOSS) 17,112 23,371 85,839
AVERAGE NUMBER OF ORDINARY SHARES 17,100 17,100 17,100
OUTSTANDING
EARNINGS PER SHARE ($)
$ 1.00 $ 1.37 $ 5.02
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BALANCE SHEET 2005 2004 2004
(in thousands of $) Mar 31 Mar 31 Dec 31
(unaudited) (unaudited) (unaudited)
- --------------------------------------------------------------------------------
ASSETS
Short term
Cash and cash equivalents 40,535 42,347 41,653
Other current assets 12,336 22,424 22,009
Long term
Vessels and equipment, net 297,969 315,050 301,500
Deferred charges and other long-term 376 346 392
assets
TOTAL ASSETS 351,216 380,167 365,554
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest bearing debt 11,200 11,200 11,309
Other current liabilities 6,358 9,640 4,974
Long term
Long term interest bearing debt 117,600 128,800 120,400
Stockholders' equity 216,058 230,527 228,871
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 351,216 380,167 365,554
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENT OF CASHFLOWS 2005 2004 2004
(in thousands of $) Jan-Mar Jan-Mar Jan-Dec
(unaudited) (unaudited) (unaudited)
- ----------------------------- --------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) 17,112 23,371 85,839
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortisation 4,237 4,358 17,219
Adjustment of financial derivatives to - 4,295 -
market value
Other - 61 110
Change in operating assets and liabilities 10,367 3,377 3,420
Net cash provided by operating activities 31,716 35,462 106,588
INVESTING ACTIVITIES
Compensation on vessel redelivery - - 690
Net cash provided by activities - - 690
FINANCING ACTIVITIES
Proceeds from long-term debt, net of fees - 139,650 139,556
paid
Repayments of long-term debt and credit (2,909) (125,397) (133,688)
facilities
Dividends paid (29,925) (13,680) (77,805)
Net cash used in financing activities (32,834) 573 (71,937)
Net increase (decrease) in cash and cash (1,118) 36,035 35,341
equivalents
Cash and cash equivalents at start of 41,653 6,312 6,312
period
Cash and cash equivalents at end of period 40,535 42,347 41,653
- --------------------------------------------------------------------------------
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
-----------------------------
(Registrant)
Date May 10th, 2005 By /s/ Kate Blankenship
-----------------------------
Kate Blankenship
Secretary
01655.0002 #570415