Wednesday, 23. August 2006 15:24

Farstad Shipping achieved an operating income of NOK 437.6 million
for the 2nd quarter (NOK 425.4 million). The operating costs for the
period were NOK 228.7 million (NOK 218.5 million).

The operating profit (EBIT) was NOK 141.0 million (NOK 136.9 million)
after depreciation of NOK 67.9 million (NOK 69.9 million). Net
finance was negative NOK 26.4 million (negative NOK 26.9 million).
Currency loss of NOK 9.1 million is booked during the 2nd quarter
(gain of NOK 56.1 million). Further an unrealized currency gain of
NOK 16.5 million (loss of NOK 56.3 million) is booked due to the
adjustment of the company's long-term liabilities in foreign
currency. The profit after taxes was NOK 110.5 million (NOK 106.7
million). The Group's cash flow*) for the period was NOK 166.0
million compared to NOK 236.3 million for the same period in 2005.

Results as per 30.06.2006
The operating income at 30.06 was NOK 854.6 million (NOK 807.5
million). The operating costs were NOK 452.2 million (NOK 430.8
million) and ordinary depreciation NOK 136.5 million (NOK 138.4.
The operating profit (EBIT) was NOK 265.9 million (NOK 238.4

Net finance was negative NOK 37.2 million (negative NOK 116.8
million) after an unrealized currency gain of NOK 39.6 million (loss
NOK 176.4 million). A realized currency loss of NOK 10.5 million is
booked during the half year (gain NOK 120.1 million). The result
after taxes was NOK 213.3 million (NOK 122.3 million). The Group's
cash flow*) for the period is NOK 325.6 million, compared to NOK
436.3 million for the same period in 2005.

*) Pre-tax profit + depreciation and deferred maintenance + change on
revaluation of long-term liabilities in foreign currency.

Financing and capital structure
In the balance sheet at 30.06.06 interest-bearing mortgage debt and
leasing liabilities together total NOK 3,820.3 million (NOK 3,656.7
million at 30.06.05). Of the company's debt, 58.7% is in NOK, 24.6%
in USD, 11.5% in GBP, 3.0% in EUR and 2.2% in AUD. Interest-bearing
current assets at 30.06.06 were NOK 995.4 million (NOK 540.8
million). Payment of dividend of NOK 117,0 million to the
shareholders was made in May.

The Group's booked equity at 30.06.06 was NOK 3,206.8 million (NOK
2,700.9 million) corresponding to NOK 82.22 (NOK 69.25) per share.
Equity ratio was 43.3% (40.0%).
Based on the valuation of the vessels (charter-free) from 3
independent brokers at 30.06.2006, the value-adjusted equity capital
per share was calculated at NOK 135.83 (NOK 101.16). This gives a
value adjusted equity ratio of 55.8% (49.4%). Average increase in
fleet value is 8.7 % since the end of 2005.

The quarterly report has been prepared in accordance with today's
International Financial Reporting Standards (IFRS) and
interpretations, and the IAS 34 standard for quarterly reporting. The
accounting principles used are in accordance with principles used in
the last annual report.

The Fleet
AHTS Far Sword was delivered from Aker Brevik at the end of June and
the vessel left for Australia to start on her contract with BHP
Billiton. The fleet in the Far East/Australia has been fully occupied
during the quarter. Only Far Scout has operated without a firm
contract this period and has been able to gain from a very good spot
market in the North Sea.

The Market
The market balance for the supply vessel fleet has been good also
during the 2nd quarter. Particularly the increase in activity in the
North Sea in 2006 has been important to absorb the number of PSV
delivered during the first half year. The rate level is improving in
all markets both for the AHTS and the PSV. The rate level for the
AHTS fleet is expected to further improve during second half 2006 and
into 2007. Rate improvement for the PSV fleet is dependent on
continued sound absorption of the new buildings being delivered and
that is a less clear picture.

The demand for supply vessels in the North Sea during the 2nd quarter
was approx. 5 % higher than for the 1st quarter, and 12 % higher than
in the 2nd quarter 2005. The available North Sea fleet was in number
of vessels 5 % higher than by the year-end and 8 % higher than at the
same time last year. An average utilization for the 2nd quarter for
the total North Sea tonnage (approx. 95.5 %) has resulted in record
spot rates. This has influenced the rate level in other markets.

High oil prices, the oil companies increased focus on exploration and
the contracting of new rigs are positive for the demand of supply

The contract coverage for the Farstad-fleet for the 2nd half year is
approx. 95 % and stands as at approx. 51 % for all of 2007.

Shareholder matters
The company's share has during the quarter been traded between NOK
100.00 and NOK 127.00 and was NOK 116.50 at the end of the quarter.
The share price at 30.06.06 values the company to approx. NOK 4.5
billion. The share was listed ex dividend of NOK 3.00 on Friday 12th
May. The number of shareholders is approx. 1,400. Foreign
shareholders own approx. 17 % of the shares.

The Board of Directors

CEO Karl-Johan Bakken - tel. 90 10 56 97
CFO Torstein L. Stavseng - tel. 91 10 70 01

The tables can be downloaded from the following link:

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