First Ship Lease Trust (D8DU) Earnings Call Transcript

Good morning, ladies and gentlemen. Welcome, and thank you for joining FSL Trust's Half Year 2026 Financial Results Live Webcast. My name is Roger Woods, and I'm the Chief Executive Officer of FSL Trust Management, the Trustee Manager of FSL Trust. We have announced the unaudited half year 2026 financial results for FSL Trust yesterday evening, and the relevant materials are available on our website, www.firstshiplease.com as well as on the SGX website. During this live webcast, we will discuss the Trust's activities and operational and financial performance in the half year 2026. After the presentation, we will take questions from the audience. Before we begin, please note that today's discussion contains forward-looking statements based on the environment as we currently see it and certain assumptions, which are subject to risks, uncertainties and external factors. The actual future results may, therefore, differ materially from our today's view and expectations communicated in this presentation, and you are advised to read the disclaimer in the financial results presentation. Please also note that this live webcast, including the Q&A session will be recorded, and a recording will be available on our website on Thursday afternoon. We start the presentation by looking at the operational and financial highlights of the year 2026 results. On the operational side, we have seen a volatile tanker market with the additional uncertainty from a new Middle East conflict and into an already high spot market. The cargo dislocations and changing trade patterns lead to increased ton-mile demand. During the period, new building orders have continued at excessive levels compared with the recent past. Moving on, we can see the fleet utilization was 95%. On the financial side, we ended the first half year with a net profit of USD 0.8 million. The adjusted EBITDA was USD 1.8 million for the period. In terms of capital structure, the liquidity position of the Trust on the 30th of June 2026 was USD 22.6 million. Taking a look at the operational performance of the fleet on Page 4 of the presentation. The adjusted EBITDA for the Trust's fleet of specialized tankers was USD 2.1 million. The adjusted EBITDA and ownership days for the vessels and the bareboat charters, which are all specialized tankers remained stable. However, the Specialty was dry docked in late May. Moving on to the fleet employment. The Trust contracted future revenue as at the 30th of June stood at approximately USD 13.8 million. The revenues are spread over the next few years. We now have a future revenue -- we now have no future revenue subject to the optional charter extensions. On the next slide, 6, is the employment profile for the Trust's fleet as of the 30th of June 2026. Moving on to the financial performance review. You can see the development of the revenue, the adjusted EBITDA and the net income over the last 6 months in comparison to the first half of 2025. The impact of the smaller fleet is now being reflected in the revenue and adjusted EBITDA. The net profit for the first half of the year was USD 0.8 million, and the adjusted EBITDA was USD 1.8 million. Moving on to the next slide. In terms of balance sheet of the Trust, which is presented on Slide 8, the Trust had USD 22.6 million in cash at the end of June 2026, plus we were in a position of 0 net interest-bearing debt. The financial position of the Trust provides optionality as well as downside protection in the face of macroeconomic headwinds. Ladies and gentlemen, this concludes the half year financial results presentation, and we're now open for any questions you may have. [Operator Instructions] We appear to have no questions. So we've come to the end of our results webcast. Thank you for joining us today, and we wish you a good day and look forward to speaking to you again next year. Goodbye.