(Dow Jones) Ship Finance International Ltd.’s (SFL) first-quarter profit rose 21% on a stronger performance in the tanker market.
The company, which operates large vessels for the transport of crude oil, had seen a weaker tanker market and higher expenses weigh on profits in recent months. But the spot tanker market rebounded at the end of the fourth quarter of 2011, and the latest quarter outperformed the preceding two quarters.
Ship Finance recently agreed to end its chartering agreements with Horizon Lines Inc. (HRZL) under an agreement that makes Ship Finance a large stakeholder in the ocean shipping company.
Following the deal, Ship Finance now has seven container vessels in the spot market, said Chief Executive Ole B. Hjertaker. Given the changed profile of its container business, the company is evaluating structural alternatives to maximize its value, he said, including carving out the container business into a separate entity.
Ship Finance said in March that Chief Financial Officer Eirik Eide would leave in the second quarter after a two-year stint to join another shipping company. He will be replaced by Senior Vice President Harald Gurvin.
For the latest period, Ship Finance posted a profit of $39 million, or 49 cents a basic share, up from $32.1 million, or 41 cents a share, a year earlier.
Operating revenue increased 17% to $84.1 million.
Analysts polled by Thomson Reuters recently expected per-share earnings of 40 cents on revenue of $116 million.
Operating expenses rose 11% to $38.1 million.
Shares closed Wednesday at $13.83 and were mostly inactive premarket. The stock is up 48% so far this year.
-By Kristin Jones; Dow Jones Newswires
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