FSL Trust
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FSL Trust - Biz at Inflexion Point
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Written by Lotustpsll
Published: 22 March 2017
Lotustpsll contributed this article to NextInsight. He worked 32 years with a global banking group before retiring a few years ago.
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FSLT share price: 13.0 c
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22 March
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- 0.6 cent
- 4.41%
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The sell-down of First Ship Lease Trust (FSLT) today was unnecessary and was in response to the auditor&rsquo s report released in SGX last night.
To those who have accounting knowledge, the net current asset deficit of usd179 million was due to the re-classification of the bank loan from long-term liabilities to current liabilities as the maturity of the loan has fallen to within 12 months.
Without this accounting adjustment, FSLT would report a current asset surplus of usd 43 million.
Strangely, this was not explained by the auditors (Moore Stephens LLP) in its statement
This is an accounting adjustment and has no bearing on the business and the operating cash flow, which has been in surplus (averaging usd 65 million per annum) for the past 5 financial years.
FSLT has advised that the refinancing of the loan will be successful and judging from recent announcements, the new bank loan is likely to commence from April.
Hence, the accounting treatment for the loan will shift back to long term liability.
 The management of the Trustee-Manager has prepared a cash flow projection and is of the view that the Group and the Trust will have sufficient resources to satisfy its working capital requirements and to meet its obligations as and when they fall due and
The Group and the Trust will continue to receive financial support from its lenders and refinancing of the current bank loan will be successful.
-- First Ship Lease Trust announcement on SGX
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I have issues with the report on the audit of the financial statements of FSL by its auditors, Moore Stephen LLC. By not stating the reasons for the net loss of usd31 million and the current asset deficit of usd179 million, this report has created unnecessary alarm for shareholders. Worse still, the report questioned the going concerns of FSL&rsquo s business.
It failed to mention these facts:-
- Loan repayments are on schedule
- More than usd 50 million debts repaid within 12 months
- FSL has cash reserve of usd 42.8m (covers loan repayments of 4 quarters)
- FSL is discussing with lenders of refinancing of current loan
- Price/Net Book value at 0,25
- FSL has generated average surplus FFO of usd 65 million for the past 5 years
- Write-downs of ship value are one-off and non-cash item
- Current asset deficit is due to accounting classification of bank loan
- FSL is generating strong cash flow from operations.
The way the report is written, I would label it as mechanical, one-sided and alarmist. How this report was sanctioned by the firm&rsquo s partners is beyond me. A huge &ldquo thumbs down&rdquo for the independent auditor! |
Is Moore Stephens a credible and good accounting firm? If they wanna mid tier, can get better ones like bdo, grant thronton
Any latest news about this company operation and it is profitable ?? TQ
granto ( Date: 15-Mar-2017 06:39) Posted:
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Baltic Dry Index up.. up up..
Will be more profitable...??
No news of the renewable contact?
anyone knows when can it resume paying dividends?
Having disagreements is not uncommon, but make it public is rather unusual. Normally will just say director resign to pursue other interests.
granto ( Date: 29-Sep-2016 19:37) Posted:
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This is bad news for FSL, Poulsson is as well regarded as they come in the industry...
Esben Poulsson quits FSL Trust board over disagreement
Management working veri veri hard...NEXTINSIGHT writing...
20cent to come???
Looks like Singapore listed shipping trusts e.g. Rickmers & FSL are doing very badly these few years.
However, overseas listed shipping trusts are still doing well.
Look at Seaspan Corp. Still profitable and good dividends.
http://www.seaspancorp.com/wp-content/uploads/2016/03/Seaspan-Investor-Fact-Sheet-March-2016.pdf
FSL changed its auditors to Moore Stephens.
Also, it is profit generating with positive cash flows. Looking to see value in it.
Cons are its leases are going to be renewed and perhaps the charter rates will be lower.
Anyone knows if it have restriction by banks to pay out dividends?
http://fsltrust.listedcompany.com/misc/ar2015.pdf
http://fsltrust.listedcompany.com/misc/FSL_Factsheet_February_24_2016.pdf
Looking strong today
looking to add
crossing 14 soon.......then fly......
halleluyah ( Date: 22-Feb-2016 09:50) Posted:
re enter..collect some to looong.....
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re enter..collect some to looong.....
wah you still believe shipping trust ah.
halleluyah ( Date: 20-Nov-2015 12:39) Posted:
accumulate some first....gd ship
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