FSL Trust sets sights on expansion into floating and offshore energy

Singapore-based FSL Trust is looking into the possibility of expanding its market presence into other maritime assets including floating and offshore energy.

Illustration; Image by OffshoreEnergy.biz

The tanker owner explained that the investment opportunities are being explored to reduce business risk and increase competitive advantages amid “volatility, cyclicality, market structure, and fierce competition in the plain vanilla shipping markets.”

The expansion might include investments and/or interest or participation in energy-related offshore assets which are more industrial in nature such as gas or floating solar photovoltaic (PV) or in infrastructural assets directly or indirectly, the trust said.

“Broadening of the scope of Authorised Businesses allows the trust to invest in other areas in the maritime space which are less volatile and cyclical and may offer a more attractive risk/reward, particularly in light of the changing environmental regulations and global energy transition,” FSL Trust said.

The proposal was approved at the extraordinary general meeting of the unitholders of FSL Trust, held on 23 August.

The trustee-manager has sold almost all vessels with market exposure to de-risk the FSL Trust, which included exiting the boxship sector and selling LR2 tankers. The core fleet of FSL Trust comprises 8 specialised tankers, which on an annualised basis, generate an Adjusted EBITDA of approximately $ 7.2 million.

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Benefitting from firmer tanker markets, FSL Trust reported a net profit of $ 2.1 million for the 2nd quarter of 2022 and $2.2 million for the 1st half of 2022, which represents a y-o-y increase of 279% and 154%, respectively. The trust has contracted future revenue of up to $ 31.8 million, including $ 24.7 million of firm contracted revenue and $ 7.1 million of optional contracted revenue.