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Executives

Ole B. Hjertaker - Chief Executive Officer and Chief Executive Officer of Ship Finance Management AS

Harald Gurvin - Principal Financial Officer and Chief Financial Officer of Ship Finance Management AS

Analysts

Herman Hildan - RS Platou Markets AS, Research Division

David Osler

Ship Finance International Limited (SFL) Q3 2013 Earnings Call November 27, 2013 10:00 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the Q3 2013 Ship Finance International Limited Earnings Conference Call. For your information, today's conference is being recorded. At this time, I would like to turn the conference over to Ole Hjertaker. Please, go ahead.

Ole B. Hjertaker

Thank you, and welcome, everyone, to Ship Finance International and our Third Quarter Conference Call. With me here today, I also have our CFO, Harald Gurvin, and Senior Vice President, Magnus Valeberg.

Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates or similar expressions are intended to identify these forward-looking statements. These statements are based on our current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include conditions in the shipping, offshore and credit markets. For further information, please refer to Ship Finance's reports and filings within -- with the Securities and Exchange Commission.

Net income for the quarter was $13.5 million or $0.14 per share. Aggregate charter revenues recorded in the quarter, including 100% owned subsidiaries accounted for as investment in associate, was $157 million, which is marginally higher than the previous quarter. This is excluding any cash sweep from the Frontline vessels in the quarter. In 2012, the average cash sweep was $13 million or $0.16 per share per quarter.

The EBITDA equivalent cash flow in the second quarter was approximately $121 million, similar to the second quarter. And last 12 months, the EBITDA equivalent was approximately $500 million.

The cash dividend declared is $0.39, which is in line with the previous quarter. The dividend represents $1.56 per share on an annualized basis or 9.2% dividend yield based on the closing price yesterday. The dividend declared in the quarter is higher than the reported net income and is a reflection of the long-term view taken by the Board of Directors with respect to the distribution capacity. Several new assets will be delivered in 2014, and we have significant capital available for new accretive investments.

We have now declared dividends for 39 consecutive quarters, totaling $16.70 per share or $1.3 billion in aggregate since 2004. And the average payout ratio has been approximately 72% of net income in the period.

In the third quarter and including all 100% owned assets, more than 50% of our charter revenues came from the offshore segment, less than 30% from tankers, and the remaining 20% split between our drybulk and container assets. We have invested nearly $1 billion this year and see additional growth opportunities, particularly in the container and offshore segments. With a robust financial position, we believe we have good firepower for the right opportunities.

The $600 million West Linus transaction was agreed in June, and we paid $195 million of the purchase price at that time. The drilling rig is expected to be delivered from the Jurong Shipyard in Singapore in early January, and the $405 million balance in -- is due at that time. The total financing of the transaction is a combination of $125 million equity investment, which was already raised in June, and $475 million in bank loans. The remaining payment in January is therefore fully covered by the committed bank facility.

The rig will be mobilized to Norway, and expected startup on the subcharter to ConocoPhillips is in April 2014. The charter rate to North Atlantic Drilling from the subcharter is approximately $375,000 for a period of 5 years with extension of [indiscernible] up to 9 years. Our charter rate with North Atlantic Drilling is approximately $85,000 per day during the mobilization period of approximately 4 months, effectively covering the interest on the financing and some returns on our invested equity. And thereafter, our charter rates increases to $222,000 per day for the next 5 years. The structure is designed to give us a stable cash return on the invested equity over time of approximately 15%.

As for the Seadrill rigs, North Atlantic Drilling will compensate us for fluctuations in the interest rates, and we have a put option at the end of the 15-year charter period. And this rig will also be accounted for as an equity investment on the U.S. GAAP, similar to the Seadrill rigs.

In November this year, the -- we sold the two 15-year-old VLCCs Front Champion and Golden Victory and terminated the charters to Frontline. In addition to the sales proceeds, Frontline paid us $11 million cash, and we received $79 million in amortizing interest-bearing notes from Frontline. We received total cash proceeds of approximately $43 million, and net of prepayment of associated debt, the positive cash effect was $20 million. Going forward, the notes are expected to generate an improved cash flow of approximately $2.4 million in 2014 compared to the old charter and financing structure.

Front Champion and Golden Victory were acquired in 2005 with the highest charter rate across the vessels on charter to Frontline. And these vessels, together with 3 others, did not contribute to the $50 million cash sweep generated in 2012. The sale of these vessels was on Frontline's request and on the basis of individual assessment of the vessels and the costs of taking them through expensive dry-dockings this year. The next upcoming dry-dockings for all the VLCCs and Suezmaxes in our fleet is not until late 2014.

The Suezmax tankers Glorycrown and Everbright have been on a higher purchase agreement to a Hong Kong-based company since delivery from the shipyard in 2009 and 2010. The charter has repeatedly failed to pay the charter hire when due, and following several efforts to amend and modify the agreements in order to find an amicable structure, we decided to terminate the agreement in September 2013. Our net construction cost was $69 million per vessel, and up until the charters were terminated, we had received payments of more than $60 million per vessel. There was also a purchase obligation linked to the charters, and we will, of course, pursue a claim for damages relating to this.

The vessels are only 4 years old, and we now trade the vessels in the spot market together with sister vessels owned by Frontline 2012. Most of the fourth quarter has been covered at an average time charter rate of close to $16,000 per day, with the second half of the quarter at much firmer levels than the first half. The intention is to find suitable long-term employment for the vessels, but until then, the vessels will continue to trade in the spot market.

In 2011, the company invested $50 million in a tax lease structure linked to the 13,800 teu container vessels CMA CGM Corte Real and CMA CGM Magellan. While the overall structure was for a 15-year lease profile, the tax structure provides incentives for the charterer to exercise their option to terminate early. We have been notified that this will take place in the first quarter of 2014, and we intend to reinvest the capital in new projects.

The company has 4 4,800 teu container vessels under construction in China, in combination with long-term time charters. The delivery was originally scheduled for first, second and third quarter 2013, but due to delays at the shipyard, the first vessel is now expected to be delivered in late December. We are, of course, actively monitoring the situation, as the long-term charter's financing arrangement and newbuilding contracts are tied together. If one or more of the contracts and corresponding charters should be terminated, the company will be refunded all amounts paid to the shipyard, with interest, and the capital will be made available for other investments.

The company's 4 8,700 teu container vessels under construction in Korea are scheduled for delivery in late 2014 and early 2015 from Daewoo's main shipyard. The vessels will be built to very high specifications, including high reefer capacity and the latest in eco-design features. As a consequence, our vessels will be best in class in terms of consumption and can be operated efficiently in a wide range of speeds, providing a lot of flexibility for container lines.

The 9,000 to 10,000 teu class is recorded as the new Panamax size. And while even bigger vessels can transverse the new extended canal from 2015 onwards, this size will have more flexibility in container ports with size and depth restrictions. We have not chartered the vessels but have initiated a dialogue with some potential charterers and expect to fix the vessels well before delivery from the shipyard.

The backbone of our business is to remains -- our significant portfolio long-term charters. Most of our vessels are chartered out on a long-term basis, and we have more than 10 years' weighted average charter coverage. Full details on a vessel-by-vessel basis is available by contacting us on email at ir@shipfinance.no.

We have $5.1 billion of fixed-rate order backlog, and the EBITDA equivalent backlog is approximately $4.4 billion or around $47 per share. These numbers include only the reduced base rates from the Frontline vessels and do not include expectations for cash sweep or profit share. Any rechartering after end of current charters are also excluded.

We have a total of 15 customers and nearly 40% of the portfolio is with companies with a market cap in excess of $5 billion. If we include all listed companies, the percentage is more than 90%. If we look at the average weighted charter tender, as indicated on the right side, nearly 60% of the portfolio is in excess of 40% -- or is in excess of 10 years, apologies, and only 5% shorter than 5 years.

I would again like to highlight the limited financial exposure relating to the vessels we have on charter to Frontline. The original fleet of 47 vessels was acquired in 2004 and another 5 vessels added in 2005, but after that, we have only reduced the number of vessels, and we are now down to 20 vessels after recent sales.

We have amortized down the depth on these vessels very quickly and have reduced the loan amounts outstanding by more than 80% since 2008. Compared to reported scrap value levels, the financing leverage is very moderate as can be illustrated on the graph on the right side where drawn amounts are indicated by the red line. The cash sweep arrangement is based on annual calculation, and as we are already very late in the year, we do not have any expectations for cash sweep this year. But if the firm market seen the last few weeks continues into 2014, the threshold rates on most of the vessels are at the low level.

I would like to note that Frontline is current with all their charter payments to us, and they reported nearly $80 million of free cash at the end of the third quarter. They also have other assets, including a stake in Frontline 2012 with a market value in excess of $90 million. And in the third quarter, the share of EBITDA contribution from the Frontline vessels was approximately 19%.

If we then switch to our performance last 12 months, the normalized contribution from our projects, including vessels accounted for as investment in associate, the EBITDA, which we define as charter hire plus profit share less operating expenses and G&A, was $500 million in the period. Net interest was $114 million or approximately $1.22 per share. But more importantly, when normalized, ordinary debt installments relating to the company's projects would have been $286 million or approximately $3.25 per share if everything was fully drawn. This is excluding prepayments relating to sale of older assets.

As the Frontline-related assets have very low leverage currently with corresponding low required amortization, the net contribution from the project was in reality $171 million in the period or nearly $2 per share. And from 2014 onwards, we expect a positive contribution from our drilling rigs and containership newbuildings.

And with that, I will leave the word over to Mr. Harald Gurvin, our Chief Financial Officer, who will take us through the numbers for the third quarter.

Harald Gurvin

Thank you, Ole.

On this slide, we have shown our pro forma illustration of cash flows for the third quarter compared to the second quarter of 2013. Please note that this is only a guideline to assess the company's performance and is not in accordance with U.S. GAAP.

For the second (sic) [third] quarter, total charter revenues were $156.4 million or $1.68 per share, up from $153.7 million in the previous quarter. Vessel operating expenses and G&A were $37.7 million, up from $34.8 million in the previous quarter. The increase in both charter revenues and operating expenses is mainly due to the 2 Suezmax tankers Glorycrown and Everbright, which switched from bareboat charters to time charters during the second quarter and are now trading in the spot market as previously described. In addition, operating expenses for the third quarter includes a dry-docking expense of $1.4 million.

We also had income of $2.2 million on financial investments during the third quarter, in line with the previous quarter. There was no cash sweep from Frontline in the third quarter, but we recorded a profit share of approximately $200,000 relating to one of the Handysize drybulk carriers.

So overall, this summarizes to an EBITDA of $121.1 million for the quarter or $1.30 per share, in line with $121.5 million in the previous quarter.

It should be noted that the average number of shares has increased from 86.1 million in the second quarter to 93.3 million in the third quarter following the issuance of 8 million shares in the end of June 2013. The proceeds from the offering were, to a large part, invested in the harsh-environment jack-up rig West Linus, which is expected, delivered and cash flow effect in January 2014.

We then move on to the profit and loss statement as reported under U.S. GAAP. As we have described in previous earnings calls, our accounting statements are slightly different than those of a traditional shipping company. As our business strategy focuses on long-term charter contracts, a large part of our activities are classified as capital leasing. As a result, a significant portion of our charter revenues are excluded from our book operating revenues and instead booked as revenues classified as repayment of investment in finance leases, results in associate and long-term investment, and interest income from associate. If you wish to gain more understanding of our accounts, we will also this quarter publish a separate webcast which explains the finance lease accounting and investment in associates in more detail. This webcast can be viewed on our website, shipfinance.org.

Overall for the quarter, we reported total operating revenues, according to U.S. GAAP, of $68.1 million. Total operating expenses, including the dry-docking of $1.4 million, were $43.8 million, giving us an operating income of $24.3 million.

We recorded a noncash negative mark-to-market of derivatives of $2.6 million in the quarter compared to a positive mark-to-market of $6.6 million in the previous quarter. Further, amortization of deferred charges includes a noncash item of approximately $1 million each quarter relating to the $350 million convertible bonds issued in January 2013. According to U.S. GAAP, an equity component of the convertible bond has been capitalized, which is then amortized over term of the bond.

So overall and according to U.S. GAAP, the company reported net income of $13.5 million or $0.14 per share for the quarter. We would again like to highlight that the average number of shares for the quarter has increased following the issuance of 8 million shares in end June 2013.

Moving on to the balance sheet, we showed $59 million of cash at the end of the quarter. In addition, we had approximately $180 million available for drawdown under our revolving facilities at the end of the quarter.

Available-for-sale securities of $67.4 million includes $47.6 million invested in short-term tradable securities as the short-term liquidity placement. In addition, the second lien notes in Horizon Lines are recorded under available-for-sale securities at $19.8 million or 40% of par value, including accrued interest.

The 2 Suezmaxes, Glorycrown and Everbright, have been transferred from investment in finance leases to vessels and equipment following the cancellation of the original hire purchase agreement in the third quarter.

The 3 ultra-deepwater units on charter to Seadrill are included in the balance sheet under investment in associates and amount due from related parties -- long term. Our investment in the subsidiaries owning the units is in the form of both equity and shareholder loans from the parent company. The total equity investment in the rigs is such a combination of the 2, and the split between equity and shareholder loans from quarter to quarter will depend on intercompany accounting.

In addition, the newbuilding harsh-environment jack-up drilling rig West Linus will be equity accounted, similar to the Seadrill rigs, due to the conservative nature of the transaction. The total investment is USD 600 million, of which $195 million was paid in end June and the remaining $405 million will be paid upon delivery. The $195 million invested is included under amount due from related parties long term in our consolidated balance sheet.

Short-term debt and current portion of long-term debt includes the $70 million short-term predelivery facility relating to West Linus, which will be repaid from the proceeds of the $475 million long-term post-delivery facility upon delivery of the unit.

Stockholder's equity stands at approximately $1.3 billion, including the $143 million of deferred equity. The book equity ratio, including deferred equity, was approximately 41% at the end of the quarter.

Then looking at our liquidity and financing status, as mentioned, the company had total available liquidity of approximately $239 million at the end of the quarter, which includes $59 million in cash and approximately $180 million freely available under revolving credit line. We also had $67 million in available-for-sale security at quarter end as previously described.

On the debt side, we had approximately $3 billion of gross interest-bearing debt outstanding at the end of the quarter, of which $1.2 billion is consolidated bank loans and approximately $1.2 billion is bank loans in our subsidiaries accounted for as investment in associate.

In addition, we had approximately $640 million of consolidated senior unsecured notes outstanding as per September 30. The figure includes the NOK 500 million bonds maturing in 2014, of which $72.5 million is net outstanding; and the NOK 600 million dollar [ph] bonds maturing in 2017, of which $95.5 million is net outstanding. The figure also includes the $350 million convertible notes maturing in 2018 and $125 million convertible notes maturing in 2016. Both our outstanding convertible notes can be repaid in shares at the company's option at maturity.

We have been active in both the capital and banking markets over last year and have now refinanced all of the 3 ultra-deepwater drilling units due in 2013 in addition to the new $475 million facility for the financing of West Linus. In November 2013, we concluded a $390 million refinancing of West Taurus, which was the last of the ultra-deepwater units to be refinanced. As for the other facilities, the refinancing was significantly oversubscribed with over $700 million in commitment from the banks. In line with the other deepwater facilities, Ship Finance only has limited guarantee obligation on the facility.

Over the last 12 months, we have raised more than $1.7 billion in the bank market and have seen terms improve for each transaction, demonstrating that within a banking environment where many owners have no or limited access to bank financing, the banks focus on the core clients, benefiting strong owners like Ship Finance.

The graph shows the scheduled installments and amounts to be financed over the next years. It should be noted that the graph assumes that all facilities are fully drawn. As mentioned earlier, only a portion of the debt relating to the Frontline vessels is drawn. And based on the current outstanding, there were effectively be no net installments relating to the Frontline vessels in 2014.

A large part of the amount to be refinanced in 2015 also relates to the majority of the Frontline vessels, and the actual amount to be refinanced will depend on the amount drawn under revolving part of the facility. The current undrawn amount under the facility maturing in 2015 is $158 million.

The next slide provides some more detail on our newbuilding program and the remaining payments to the shipyard. As per September 30, we had one jack-up drilling rig and 8 container vessels under construction. The graph shows the committed financing in the blue bars compared to the remaining shipyard installment.

The $600 million investment in the newbuilding harsh-environment jack-up drilling rig West Linus has a final payment of $405 million due upon the scheduled delivery in January 2014, which will be funded -- fully funded, by the long-term bank facility.

In May 2013, we entered into contracts for 4 newbuilding 8,700 teu container vessels in Korea, with expected delivery in late 2014 and early 2015. The total contract price is $340 million with the majority of the payments due upon delivery of the vessels. We have not yet entered into any financing with respect to these vessels but have seen interest from both commercial banks and export credit agencies. We will arrange financing for the vessels in due course and expect that equity investment is up to $100 million.

We also have 4 4,800 teu container vessels under construction with expected delivery between the fourth quarter 2013 and the second quarter 2014. We have arranged a 12-year financing for the vessels at attractive terms, and the net remaining equity investment in the 4 vessels is only $30 million.

We are in compliance with all financial covenants on our loan agreement. Free cash for covenant purposes was $239 million compared to the minimum requirement of $25 million. This includes $180 million available under revolving credit facilities at quarter end with maturity in excess of 12 months.

Working capital was $93 million compared to the requirement of being positive. And the book equity ratio was 41% compared to the minimum requirement of 20%. And on the loan agreements where we have minimal value covenants, we were fully in compliance at the end of the quarter.

It is worth noting that Ship Finance has been in full compliance with all financial covenants for each of the 39 quarters since the company was established. Given the financial turmoil and the depressed shipping markets over the last years, this leaves us a very strong standing in the bank market as recently demonstrated on the refinancing of the 3 ultra-deepwater drilling units and the financing of the harsh-environment jack-up rig.

Now to summarize, net income for the quarter was $13.5 million or $0.14 per share. The aggregate EBITDA was $121 million or $1.30 per share. The Board has declared a quarterly cash dividend of $0.39 per share for the quarter. This represents a dividend yield of 9.2% based on the closing share price as of November 26.

We have premium access to the bank and capital markets and have raised $2.5 billion in bank debt, bonds, convertible notes and equity over the last 12 months.

We have several newbuildings being delivered over next year, which will increase the net cash flow from our projects. In addition, the lower outstanding amounts under the facilities relating to the Frontline vessels gives no net amortization, effectively improving the distributable cash flow.

And with that, I give the word back to the operator, who will open the line for any question.

Question-and-Answer Session

Operator

[Operator Instructions] We will now take our first question from Herman Hildan from RS Platou Markets.

Herman Hildan - RS Platou Markets AS, Research Division

I just have a quick question on the 4,800 teu vessels being delivered. In your report, you mentioned that they may be canceled. My question -- I mean, I take it that the vessels have been built purposely and that the charter would like to receive them. So what's kind of the likelihood that you'll be able to renegotiate the price and still maintain positive terms with the charter?

Ole B. Hjertaker

Well there's really not so much to report as of right now. I mean, we have -- of course, we have a team at the shipyard who are, of course, actively working there looking after all these 4 vessels. And we have a dialogue with the yard itself. We have a dialogue with the financing bank, yes, and of course, the charterer. So we really don't have any more information, and we'll notify the market if and when there are any changes. But as we see it right now based on the latest update from the yard, the vessel will be ready in late December. The reason why we made the comments in the press release was really to notify that there have been significant delays, and as we are getting closer to the deadlines, we feel that it is appropriate to let the market know that we are getting closer to that, call it, the time limit. But otherwise, we will make announcements if and when there are any changes.

Herman Hildan - RS Platou Markets AS, Research Division

Okay. So if the vessel is delivered in December, then you -- maybe the new -- that's going to be the position where you could negotiate terms with the yard.

Ole B. Hjertaker

Well I cannot comment specifically on dialogue we may have with the yard or with the charterer, but if there are any changes, we will let you know. The base price for the vessels is around $54 million, and that's really what we have to report right now.

Herman Hildan - RS Platou Markets AS, Research Division

Okay. And then the last question, I mean, you also scrapped 2 VLCCs approaching lapsing [ph]. Did you look at alternatives for chartering out the vessels, or was that market simply not there? I mean, if you can do lapsing [ph] with the charterer, say, for 3 or 5 years, does that not make any sense? Or was it not possible?

Ole B. Hjertaker

Well we were approached by Frontline with respect to these 2 vessels. And as you know, the Frontline has chartered the vessels from us, and we're buying the management services from them where they are then responsible for tactical management, including dry-docking. And Frontline proposed a transaction for us where we, in combination with selling the vessels in the market, would get compensation in cash and in a note. The Frontline effectively coordinated the sales process, and I'm sure they also looked at all available options, but we ended up selling it to a third party for cash. And we think, for us, it is in line with our overall strategy to focus on modern vessels. These vessels were approaching 15 years, and we got a combination of cash and note out that we felt were a fair deal and has improved cash flow [ph]. And we'll have an increased cash -- call it, cash revenue for us over the next year or so. So we think it's a balanced deal.

Herman Hildan - RS Platou Markets AS, Research Division

And the final question I have. I mean, you mentioned that there's a tight lending market on non-core clients and that terms are improving. Is that the benefit being Ship Finance in terms of your margin on new projects? Or does that, call it, call out go into whoever your -- whatever segments you're going to grow into the quality comps [ph] project?

Harald Gurvin

I think we've been fairly active in the banking market over the last year, and we have seen margins coming down every time we do a financing, and we expect them to go further down because there is definitely good appetite for the good name. Of course, the margin will also depend on your counterpart, but it's definitely a good time to finance things, so which, of course, makes us competitive in new projects also.

Herman Hildan - RS Platou Markets AS, Research Division

And what kind of target returns are you -- would you kind of guide on going forward from [ph] new growth?

Ole B. Hjertaker

We don't have very specific target percentages lined up. But we, of course, look at all projects individually and look to get the best return out of the deals we do. So we think we have a decent amount of firepower, if we find the right projects. And then it's, I guess it's all down to trying to do the right deals. There are a lot of opportunities out there, and it's all about trying to choose the ones you think will give you a long-term return, not only cash yield but also in terms of residual exposure and also finding, doing the deals with the right counterparts.

Operator

[Operator Instructions] We will now take our next question from David Osler from Lloyd's.

David Osler

I wonder what you can tell me about how you see your operating margin progressing over the coming few quarters. I mean, I've just been doing some "back of the envelope" calculations. I noticed it's -- seems to be on a downward trend. Do you think you're going to be able to reverse that at any point?

Ole B. Hjertaker

Well we focus on the structuring deals on -- call it, on a deal-by-deal basis. And of course, we try to get all the margin we can get out of deals. You will note that quite a few of our projects in the portfolio are on bareboat basis where we don't have -- run -- or where we don't expose to operating expenses. While in other deals, we have them on time charter where we have operating expenses. In the quarter, we saw an increased operating expense relating to 2 Suezmax tankers, the Glorycrown and Everbright, but that was because they were switched from a structure where we had them on bareboat to a time charter structure where we then both increase the charter revenues but also the operating expenses accordingly. So we don't have any sort of specific target in terms of the operating margin. Our focus is to deliver long-term sustainable net cash flows. And the exact deal structure varies from transaction to transaction.

David Osler

So you're -- relatively speaking, aren't concerned by the trend.

Ole B. Hjertaker

Yes, but I'm -- I hear what you're saying. I mean, we don't use that as a core test for our business model. What we focus more in on is how much net cash flow is coming out of our different projects.

David Osler

Right. And, yes, how are you measuring that?

Ole B. Hjertaker

Well it's relatively simple. You start with EBITDA and you subtract the interest and amortization, and you are close to a cash flow that is available for...

David Osler

Right, on that benchmark, okay.

Ole B. Hjertaker

Sorry?

David Osler

I was just checking which benchmark you were using. But, yes, okay, fine.

Ole B. Hjertaker

Yes, yes. Which is also in the first of the slides that Mr. Gurvin indicated, which is Slide #6 -- sorry, Slide #9 in the presentation. You will see that third quarter was pretty similar to the second quarter with an EBITDA of around $121 million in the quarter. What we have seen, actually seen, is that debt amortization has come down and particularly linked to the Frontline vessels where we have so low leverage now that there's no need to amortize that debt any further. So the free cash flow, we think, is quite decent. And that is also a background for how the Board has decided to pay a dividend this quarter as well of $0.39 per share.

Operator

[Operator Instructions] As it appears there are no further questions, I would like to hand back to Mr. Hjertaker for any additional or closing remarks. Please go ahead, sir.

Ole B. Hjertaker

Yes, thank you. Then I would like to thank everyone for participating in our Third Quarter Conference Call. And if you do have any followup questions, there are contact details in the press release. Have a nice day.

Operator

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

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