Budding Optimism

First Ship Lease (“FSL”) Trust and Pacific Shipping Trust (“PST”) have both released their first quarter results this year and reported stable numbers. FSL Trust saw its lease revenue marginally decline by 1.6% to USD 24.4 million compared with 1Q FY09 due to the lower lease payments received from two vessels leased to Geden Lines. These leases are pegged to USD 3 month LIBOR which has declined between 1Q FY09 and 1QFY10. In a similar fashion, PST’s first quarter revenue in 1Q FY10 remained unchanged at USD 15.2 million, delivering a predictable and healthy performance.

Mr Philip Clausius, Chief Executive Officer of FSL Trust Management, says the trust is encouraged by the positive signs of a demand recovery in the shipping industry, although the oversupply of new ships continues to be an overshadow over the mid-term. FSL Trust pointed out that as at March 2010, the aggregate charter free value of its 23 vessels stood at USD 623 million, which is 5.5% higher than the charter free value of USD 590.5 million obtained from independent appraisers in October 2009. This points towards a recovery in asset values and industry credit profile.

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