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- What were FSL Trust's most recent financial results?
- FSL Trust reports its financial results quarterly via the SGXNET and on its website. For a complete listing of the company's financial results, please click here.
- How often does FSL Trust release its financial results?
- FSL Trust releases its financial results on a quarterly basis.
- How does FSL Trust depreciate the vessels it owns?
- The vessels employed on long-term bareboat leases, excluding two vessels leased to TORM A/S, are depreciated on a straight-line basis at rates which are calculated to write-down their cost to their estimated residual values at the end of the base lease term. For example, if the cost of a vessel is $100 million and it is leased to a lessee with a base lease term of 10 years, and assuming the projected residual value is $45 million at the end of the lease term, the depreciation charge per annum will be $5.5 million ($100 million less $45 million over 10 years). More info on our vessels' lease terms can be found here.
In view of the proposed restructuring of lease terms with TORM A/S (refer to press release here), TORM Margrethe and TORM Marie, are depreciated on a straight-line basis at rates which are calculated to write-down their cost to their estimated residual values at the end of their economic useful life of 25 years. The Trust's other vessels not leased on long-term bareboat charters are also depreciated on a straight-line basis at rates which are calculated to write-down their cost to their estimated residual values at the end of their economic useful life of 25 years.
- How is the residual value further depreciated when a lessee extends the lease term upon expiry of the base lease term?
- The remaining residual value is depreciated over the term of the extended lease to the new residual value.
- What is residual value and how is it determined for each vessel?
- The residual value of each vessel is estimated based on a regression analysis of the average historical data for standard vessels obtained from an independent maritime database, and for non-standard vessels obtained from specialised brokers. Factors such as asset price, quality and fungibility are also taken into consideration to determine the acceptable level of residual value. The residual value is reviewed at each reporting date, with any change in estimate accounted for as a change in estimate prospectively.
- Is the residual value also the scrap value?
- Residual value is the projected fair market value of a vessel at the end of the base lease term. This is different from scrap value which is the amount a vessel's parts (mostly steel) can fetch when it is scrapped usually at the end of its useful life. As FSL Trust's vessels are relatively young, they will continue to have substantial value and remaining useful life at lease maturity.
- What is the typical useful life of a vessel?
- The useful life of a vessel is typically between 25 and 30 years.
- How does earnings per unit impact distribution per unit (DPU)?
- There is no direct correlation between profit trends and distributions since DPU is determined based on FSL Trust's operating cash flows and not on accounting profits.
Business trusts can pay out to unitholders distributions which are higher than net profit (unlike regular listed companies). In fact, it is technically possible for a business trust to declare a distribution per unit that is higher than earnings per unit (which includes non-cash items like depreciation).
- How much revenue has FSL Trust secured on long-term contracts?
- The remaining contracted revenue can be found here.