Knightsbridge Tankers Limited Announces Third Quarter 2005 Results


HAMILTON, Bermuda, Nov. 10, 2005 (PRIMEZONE) -- Knightsbridge Tankers Limited

Interim Report September 2005

THIRD QUARTER AND NINE MONTH RESULTS

The Board of Knightsbridge Tankers Limited (the "Company") reports net income of $3.6 million and earnings per share of $0.22 for the third quarter of 2005. The average daily time charter equivalents ("TCEs") earned by the Company's five VLCCs was $34,700 compared with $38,900 in the immediately preceding quarter. The decline in net income as compared with previous quarters reflects the weakening of the tanker market early in the third quarter combined with the effect of the drydocking of the two vessels. Net interest expense for the quarter was $1.4 million (2004 comparable quarter: $1.9 million) and at September 30, 2005, all of the Company's debt is floating rate debt.

During the third quarter, the drydockings of the vessels Chelsea and Mayfair were completed, as scheduled, at a total cost of $1.6 million. The vessel Kensington is scheduled to be drydocked in the fourth quarter.

The net decrease in cash and cash equivalents in the quarter was $11.6 million. The Company generated cash from operating activities of $8.3 million and used $6.3 million to repay debt and credit facilities and $13.6 million to pay dividends.

For the nine months ended September 30, 2005 the Company reports net income of $28.1 million and earnings per share of $1.65. The average daily TCE's for the nine months ended September 30, 2005 was $43,400. Net interest expense for the period was $3.8 million (2004 comparable six months: $6.7 million).

On November 10, 2005, the Board declared a dividend of $0.50 per share. The record date for the dividend is November 21, 2005, ex dividend date is November 17, 2005 and the dividend will be paid on or about December 5, 2005.

THE MARKET AND OUTLOOK

Compared to the steady downward trend witnessed throughout the second quarter tanker rates in the third quarter experienced higher volatility with steep ups and downs. A peak in rates in the middle of July, seeing the benchmark route from AG-Japan stretching up to Word Scale 107, was followed by a dive in the market down to period low of World Scale 58 less than a month a later. Late September saw a sharp rebound with a particularly strong West Africa market; hence the overall trend was more positive than the previous quarter.

Multiple factors have influenced the oil tanker market during the period, with the Hurricanes Katrina and Rita stealing the headlines. With U.S. Gulf oil production and refinery capacity shut in, the global oil supply system started to look fragile. Analysts are still trying to assess the overall consequences, but the delay of vessels in the U.S. Gulf is one factor putting upwards pressure on rates. The refinery shut downs boosted the U.S. demand for sweeter crude, allowing for the rate increase in the West Africa to U.S. Gulf market seen towards the end of the quarter. As a consequence a larger portion of heavier, sour crude from the Caribbean went east, generating ton miles and stimulating the demand side of oil transportation services. With the winter ahead, rising rates toward the end of the third quarter is in line with the seasonal tend for this time of the year.

During the quarter the spread in earnings between eastbound and westbound routes decreased, seeing the traditionally lower yielding western routes increase in attractiveness. This is largely attributable to three factors: increased spread in earnings for single and double hulled units, the trade pattern after the hurricane activity, and a more favourable tonnage situation due to uncertainty created by a strike in Mediterranean port Fos/Lavera.

The increasing VLCC fleet obviously put pressure on the supply side, with six units delivered in the third quarter of 2005 and one scrapped, according to shipbroker Bassoe. This accounts for a year-to-date fleet growth of 5.1%. In line with the oil price rally, bunker prices rose during the quarter, ending at an average of $287 per ton in Fujairah, putting further pressure on vessel earnings.

At the time of writing the spot market is on the rise, and AG to Singapore has been fixed at World Scale 205. Oil market analysts have downgraded demand figures slightly after the oil price rally and the supply disruptions, but the IEA still believes in consumption growth of around 1.75 million barrels in 2006.

During the fourth quarter the vessels Hampstead and Kensington will be renamed TI Ningbo and TI Qingdao respectively, based on a request from the charterer.

The Board expect the earnings to improve significantly during the fourth quarter as the market rebounds from second and early third quarter lows.

FORWARD LOOKING STATEMENTS

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

Knightsbridge desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "except," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" "pending and similar expressions identify forward-looking statements.

The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charterhire rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in Knightsbridge's operating expenses, including bunker prices, drydocking and insurance costs, the market for Knightsbridge's vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by Knightsbridge with the Securities and Exchange Commission.

November 10, 2005 The Board of Directors Knightsbridge Tankers Limited Hamilton, Bermuda

Questions should be directed to:


KNIGHTSBRIDGE TANKERS LIMITED THIRD QUARTER REPORT (UNAUDITED)



     2004       2005 INCOME STATEMENT           2005    2004      2004
 Jul- Sep   Jul- Sep (in thousands of $)    Jan-Sep  Jan-Sep   Jan-Dec
                                                             (audited)

  28,481     19,752 Operating revenues       70,045  93,132   135,695
   3,733      4,673 Voyage expenses          12,362  10,089    14,240
   2,989      5,667 Ship operating           12,889   6,756     9,868
                    expenses
     266        247 Administrative              810     894     1,114
                    expenses
  21,493      9,165 Operating income         43,984  75,393   110,473
                    before depreciation
   4,290      4,315 Depreciation             12,805  12,915    17,219
  17,203      4,850 Operating income after   31,179  62,478    93,254
                    depreciation
     126        220 Interest income             819     263       449
 (1,949)    (1,368) Interest expense        (3,804) (6,742)   (7,877)
   2,401       (57) Other financial items      (79)    (76)        13
  17,781      3,645 Net income (loss)        28,115  55,923    85,839

  17,100     17,100 Average number of        17,100  17,100    17,100
                     ordinary shares
                     outstanding
 $  1.04   $  0.22  Earnings per Share ($)  $  1.65 $  3.27    $ 5.02

 BALANCE SHEET                                 2005    2004       2004
 (in thousands of $)                         Sep 30  Sep 30     Dec 31
                                                             (audited)
 ASSETS
 Short term
 Cash and cash equivalents                   21,228  36,124     41,653
 Other current assets                         8,886  12,497     22,009
 Long term
 Vessels and equipment, net                 289,385 305,803    301,500
 Deferred charges and other long-term           376     408        392
 assets
 Total assets                               319,875 354,832    365,554

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Short term
 Short term interest bearing debt            11,355  11,200     11,309
 Other current liabilities                    8,789   4,378      4,974
 Long term
 Long term interest bearing debt            112,000 123,200    120,400
 Stockholders' equity                       187,731 216,054    228,871
 Total liabilities and stockholders'
   equity                                   319,875 354,832    365,554

     2004     2005 STATEMENT OF              2005       2004      2004
 Jul- Sep Jul- Sep CASHFLOWS              Jan-Sep    Jan-Sep   Jan-Dec
                   (in thousands of $)                       (audited)
                   OPERATING ACTIVITIES
   17,781    3,645 Net income (loss)       28,115     55,923    85,839
                   Adjustments to
                   reconcile net income
                   to net cash provided
                   by operating
                   activities
    4,310    4,332 Depreciation and        12,854     13,009    17,219
                   amortisation
                   Adjustment of
  (2,477)        - financial derivatives                             -
                   to market value
                 - Other                        -                  110
                   Change in operating
  (6,504)      326 assets and              16,248     12,336     3,420
                   liabilities
   13,110    8,303 Net cash provided by    57,217     81,268   106,588
                   operating activities

       -        - INVESTING ACTIVITIES
     690        - Compensation on              -        690       690
                  vessel redelivery
     690        - Net cash provided by         -        690       690
                  investing activities

                   FINANCING ACTIVITIES
                   Proceeds from
        -     (33) long-term debt and        (33)    140,000   139,556
                   credit facilities,
                   net of fees paid
                   Repayments of
  (2,894)  (6,211) long-term debt and     (8,354)  (131,441) (133,688)
                   credit facilities
 (12,825) (13,680) Dividends paid        (69,255)   (60,705)  (77,805)
 (15,719) (19,924) Net cash used in      (77,642)   (52,146)  (71,937)
                   financing activities

                  Net increase
 (1,919) (11,621) (decrease) in cash    (20,425)     29,812    35,341
                  and cash equivalents
                  Cash and cash
  38,043   32,849 equivalents at start    41,653      6,312     6,312
                  of period
                  Cash and cash
  36,124   21,228 equivalents at end of   21,228     36,124    41,653
                  period


-0-

Contact Data