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 October , 2005
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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 August 12, 2005.
Knightsbridge Tankers Limited
Interim Report June 2005
SECOND QUARTER AND SIX MONTH RESULTS
The Board of Knightsbridge Tankers Limited (the "Company") is pleased to report
net income of $7.4 million and earnings per share of $0.43 for the second
quarter of 2005. The average daily time charter equivalents ("TCEs") earned by
the Company's five VLCCs was $38,900 compared with $56,900 in the immediately
preceding quarter. These reduced earnings reflect the continued weakening of the
tanker market in the first half of 2005 compared with the exceptionally high
rates experienced in the fourth quarter of 2004. Net interest expense for the
quarter was $1.0 million (2004 comparable quarter: $2.4 million) and at June 30,
2005, all of the Company's debt is floating rate debt. As of August 8, 2005, the
Company has an average cash breakeven rate for its vessels of $16,113.
During the second quarter, the drydocking of the first of the four vessels
scheduled for 2005 was completed at a cost of $0.9 million. The Company had
originally budgeted $1.0 million per vessel for drydocking. An additional two
vessels will be drydocked in the third quarter.
The net decrease in cash and cash equivalents in the quarter was $7.7 million.
The Company generated cash from operating activities of $17.2 million and $0.7
million from credit facilities and used $25.6 million to pay dividends.
For the six months ended June 30, 2005 the Company reports net income of $24.5
million and earnings per share of $1.43. The average daily TCE's for the six
months ended June 30, 2005 was $48,100. Net interest expense for the period was
$1.8 million (2004 comparable six months: $4.7 million).
On August 12, 2005, the Board declared a dividend of $0.80 per share. The record
date for the dividend is August 26, 2005, ex dividend date is August 24, 2005
and the dividend will be paid on or about September 6, 2005.
THE MARKET AND OUTLOOK
The overall downward trend of the VLCC market witnessed in the first quarter of
the year continued in the second quarter. Early April started off on a rebound
seeing a peak in rates at Worldscale ("WS") 90 levels. This was followed by a
steady decline until the middle of June, when the market did not bottom out
until Worldscale 50 levels were reached. However, at the end of the quarter the
market climbed back up towards WS 70 levels. The average WS rate from Arabian
Gulf to the East was about WS 72 compared to WS 107 in the first quarter of
2005. This equates to a daily time charter equivalent of approximately $32,000
per day.
A greater proportion of eastbound voyages thickened the list of vessels open in
the Arabian Gulf during the quarter. Combined with an increasing fleet, the
psychology in the market shifted in owners' disfavour resulting in a downward
pressure on rates. In line with oil prices, bunker prices remained high, with an
average of $256 per ton in the Arabian Gulf.
The International Energy Agency (IEA) reported in its August report an average
OPEC Oil production, including Iraq, of approximately 29.32 million barrels per
day during the second quarter of the year, a 0.54 million barrels per day or 1.9
percent increase from the first quarter. OPEC announced in June a 500,000
barrels increase in the production ceiling.
IEA estimates world oil demand averaged 81.79 million barrels per day in the
second quarter, a 2.5 percent decrease from first quarter in 2005. IEA further
predicts that the average demand for 2005 in total will be 83.72 mb/d, or a 1.95
percent growth from 2004, showing that oil demand remains relatively stable at a
high level despite the record high oil prices.
The world trading VLCC fleet totalled 456 vessels at the end of the second
quarter of 2005, an increase of 1.1 percent over the quarter. No VLCCs were
scrapped in the period and five were delivered. The total order book is now at
94 vessels, up from 88 after the first quarter of 2005. This represents 20.62
percent of the current VLCC fleet. A total of 11 VLCCs were ordered during the
quarter.
Although the tanker market recently has seen lower levels than were anticipated,
the rates are expected to rebound in the second half of the year. The freight
futures market maintains an optimistic view, demonstrated through the
possibility of selling freight futures for the remainder of the year at a level
that equates to TCEs of approximately $64,000, and $46,000 for 2006.
At the Annual General Meeting of the Company held on June 27, 2005, the
Shareholders approved amending the Company's bye-laws and thereby removed the
restrictions on the Company's business activities. In view of this change, the
Board will consider over the coming months the future strategy and opportunities
available for the Company within its current business sector.
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.
August 12th, 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 SECOND QUARTER REPORT
(UNAUDITED)
2004
2004 2005 INCOME STATEMENT 2005 2004 Jan-Dec
Apr-Jun Apr-Jun (in thousands of $) Jan-Jun Jan-Jun (audited)
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28,090 20,924 OPERATING REVENUES 50,293 64,651 135,695
5,053 3,878 Voyage expenses 7,689 6,355 14,240
3,166 4,120 Ship operating expenses 7,222 3,766 9,868
253 334 Administrative expenses 563 629 1,114
19,618 12,592
OPERATING INCOME BEFORE DEPRECIATION 34,819 53,901 110,473
4,267 4,269 Depreciation 8,490 8,625 17,219
15,351 8,323 OPERATING INCOME AFTER DEPRECIATION 26,329 45,276 93,254
112 292 Interest income 599 138 449
(2,494) (1,251) Interest expense (2,436) (4,794) (7,877)
1,802 (6) Other financial items (22) (2,478) 13
14,771 7,358 NET INCOME (LOSS) 24,470 38,142 85,839
17,100 17,100 AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING 17,100 17,100 17,100
$ 0.86 $ 0.43 EARNINGS PER SHARE ($) $ 1.43 $ 2.23 $ 5.02
BALANCE SHEET
- ------------- 2004
(in thousands of $) 2005 2004 Dec 31
June 30 Jun 30 (audited)
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ASSETS
Short term
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Cash and cash equivalents 32,849 38,043 41,653
Other current assets 9,033 9,553 22,009
Long term
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Vessels and equipment, net 293,700 310,783 301,500
Deferred charges and other long-term assets 360 334 392
TOTAL ASSETS 335,942 358,713 365,554
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
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Short term interest bearing debt 14,766 11,200 11,309
Other current liabilities 8,610 10,415 4,974
Long term
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Long term interest bearing debt 114,800 126,000 120,400
Stockholders' equity 197,766 211,098 228,871
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 335,942 358,713 365,554
2004
2004 2005 STATEMENT OF CASHFLOWS 2005 2004 Jan-Dec
Apr-Jun Apr-Jun (in thousands of $) Jan-Jun Jan-Jun (audited)
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OPERATING ACTIVITIES
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14,771 7,358 Net income (loss) 24,470 38,142 85,839
Adjustments to reconcile net income to net cash
provided by operating activities
4,267 4,285 Depreciation and amortisation 8,522 8,625 17,219
(1,818) - Adjustment of financial derivatives to market value - 2,477 -
13 - Other - 74 110
15,463 5,555 Change in operating assets and liabilities 15,922 18,840 3,420
32,696 17,198 Net cash provided by operating activities 48,914 68,158 106,588
INVESTING ACTIVITIES
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- - Compensation on vessel redelivery - - 690
- - Net cash provided by activities - - 690
FINANCING ACTIVITIES
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Proceeds from long-term debt and credit facilities,
- 766 net of fees paid - 139,650 139,556
(2,800) Repayments of long-term debt and credit facilities (2,143) (128,197) (133,688)
(34,200) (25,650) Dividends paid (55,575) (47,880) (77,805)
(37,000) 24,884 Net cash used in financing activities (57,718) (36,427) (71,937)
(4,304) (7,686) Net increase (decrease) in cash and cash equivalents (8,804) 31,731 35,341
42,347 40,535 Cash and cash equivalents at start of period 41,653 6,312 6,312
38,043 32,849 Cash and cash equivalents at end of period 32,849 38,043 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
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(Registrant)
Date October 11, 2005 By /s/ Kate Blankenship
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Kate Blankenship
Secretary
01655.0002 #607649