First Ship Lease Trust : Financial Statements And Related Announcement - First Quarter Results

FIRST SHIP LEASE TRUST - CONDENSED INTERIM CONSOLIDATED FINANCIAL STATE-MENTS AND DISTRIBUTION ANNOUNCEMENT FOR THE FIRST QUARTER AND THREE-MONTHS PERIOD ENDED 31 MARCH 2022

Corporate Information

First Ship Lease Trust ("FSL Trust" or the "Trust") is a Singapore-based business trust which owns a diversified fleet of well-maintained, oceangoing tankers across different sizes.

As at 31 March 2022, the vessel portfolio comprised 11 tankers of different sizes. Of the 11 vessels, 8 vessels are employed under fixed-rate period charters, whilst the other 3 vessels are trading in the spot market or revenue sharing agreements (including 1 vessel currently idle).

The combined portfolio of vessels had an average age of approximately 15 years and a dollar-weighted average remaining lease period of approximately 3 years (excluding optional extension periods and early termination options).

References to the term "Group" mean FSL Trust and its subsidiaries on a consolidated basis.

Summary of FSL Trust Consolidated Results

Revenue

Adjusted EBITDA(1)

Profit for the quarter Net distributable amount Amount to be distributed Distribution per unit (US Cents)

Average number of vessels

11.0

11.9

(7.6)Note(s):

(1) Excluding gains/losses from the disposal of vessels and vessel impairments.

1(a)(i) Condensed Interim Consolidated Income Statement

Note

Revenue

Depreciation expense on vessels (a)

Gain on disposal of vessels (b) Impairment on vessels

Voyage expenses

Vessel operating expenses Management fees

Trustee fees

Other Trust expenses

Results from operating activities Finance income

Finance expenses Profit before tax Income tax expense

Profit for the period

Earnings per unit (US cents)

Basic

Diluted

Note(s):

• (a) Including amortisation of dry-docking costs.

• (b) This relates to the sale of three product tankers (FSL Suez and FSL Fos in February 2021 and FSL Osaka in March 2021) and a revision to the gain on disposal for one containership (FSL Enhancer) in October 2020.

1(a)(ii) Condensed Interim Statement of Comprehensive Income

Profit for the period

Total comprehensive income, net of tax

1(a)(iii) Distribution Statements

Note

Profit for the period

Add: Non-cash adjustments (a)

Net cash generated from operations

Less: Repayment of secured bank loans

Prepayment of secured bank loans (b)

Income available for distribution

Add: Utilisation of cash retained from previous periods (c)

Less: Cash retained in the current period

Net distributable amount

Capital distribution

Total distribution (d)

Comprising:(i) Tax-exempt distribution

(ii) Tax-exempt (one-tier) distribution

Amount to be distributed

Units at end of period ('000)

Distribution per unit (US Cents)

Note(s):

(a) Non-cash adjustments

Depreciation expense on vessels^

Impairment on vessels

Gain on disposal of vessels

Amortisation of initial direct costs^^

^^ Excluding amortisation of dry-docking costs.

^^ Excluding amortisation of deferred arrangement fees.

• (b) In 1Q 2021, US$28.8 million of the cash proceeds from the disposal of the two LR2 product tanker newbuildings was used to prepay secured bank loans. However, as these amounts were not generated from operations, it had not been included in this statement.

• (c) Distributions are not limited to the amount of the net distributable amount as distributions can also be made from proceeds from the sale of vessels.

• (d) No distribution has been recommended by the Board for the first quarter of 2022.

1(b)(i) Condensed Interim Statements of Financial Position

Non-current assets Vessels Subsidiaries

Current assets Inventories

Trade and other receivables Cash and cash equivalents Non-current assets classified as held-for-sale

Total assetsEquity attributable to uni-tholders of FSL Trust Units in issue Reserves Total equity

Non-current liabilities Secured bank loansCurrent liabilities

Trade and other payables Secured bank loans Income tax payable

Total liabilities

Total equity and liabilitiesNote

(a)

(b) (a)

(c)

(c)

This space intentionally left blank

1(b)(i) Condensed Interim Statements of Financial Position (cont'd)

Note(s):

(a) Vessels

Initial

Group

Vessels US$'000

direct costs US$'000

Total US$'000

3 months ended 31 March 2022

Cost

At 1 January 2022 Additions

At 31 March 2022

249,988 589 250,577

2,237 - 2,237

252,225 589 252,814

Less:

Accumulated depreciation/ amortisation and impairments At 1 January 2022 Depreciation/amortisation charge for the period

At 31 March 2022

183,866 1,264 185,130

2,188 186,054

1 1,265

2,189

187,319

Carrying amount At 31 March 2022

65,447

48

65,495

As at 31 December 2021

Cost

Less: Accumulated depreciation/ amortisation and impairments Net book value

249,988 183,866 66,122

• 2,237 252,225

• 2,188 186,054

49

66,171

During the three-month period ended 31 March 2022, no further impairment is recorded for the vessels as the recoverable amount based on value in use calculations/fair value less costs of disposal was higher than their carrying values (1Q 2021: US$619,000 based on value in use calculations). As at 31 March 2022, the carrying amount of the vessels was US$65,495,000 (FY 2021: US$66,171,000).

As at 31 December 2021, the Group reclassified one chemical tanker, FSL London, to non-current assets classified as held-for-sale.

The value in use calculations use discounted cash flow projections based on the projected cash flows over the remaining useful life of each vessel and its projected residual value, which was based on the average scrap steel price per light weight ton in recent years or the values obtained from third party sources.

The fair value less costs of disposal is based on the sale of similar vessels and is therefore within Level 2 of the fair value hierarchy.

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