FSL Trust

FSL Trust: disappointing 2Q12 results. Revenue at US$29.2m, +1.9% yoy, but voyage and vessel operating expenses increased at a faster clip, +95.1% yoy to US$8.3m, due to 3 more vessels trading in the spot market. Overall the Trust reported a net loss of US$2.5m, vs net loss of US$0.5m last yr. To secure temporary relaxation of two loan covenants, FSL Trust is restricted from paying any distributions over the next 12 mths. Mgt believes it prudent to focus on strengthening its balance sheet, in view of the bleak shipping industry outlook. Will review distribution payout after Jun ’13. While this was announced already in Jun, expect sentiment to continue to remain weak, as the selling point of a trust is supposed to be its yield stability.