d963199_6-k.htm

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Knightsbridge Tankers Limited (the “Company” or “Knightsbridge”) reports net income of $7.8 million and earnings per share of $0.45 for the fourth quarter of 2008. The average daily time charter equivalents (“TCEs”) earned by the Company’s four VLCCs was $43,900 compared with $52,800 in the preceding quarter. The fourth quarter earnings reflect a decrease in the profit share on the vessels Hampstead and Kensington.

The net increase in cash and cash equivalents in the quarter was $3.3 million. The Company generated cash from operating activities of $14.7 million, used $2.2 million to repay loan and credit facilities, invested $0.6 million in its newbuilding project and distributed $8.6 million in dividend payments. In February 2009, the Company has an average cash breakeven rate for its vessels of $19,300 per vessel per day compared to $19,410 in February 2008.

For the year ended December 31, 2008, the Company reports net income of $48.1 million and earnings per share of $2.81, compared with $84.8 million and $4.96, respectively, in 2007. The net income and earnings per share in 2007 include a gain in the amount of $49.1 million and $2.87, respectively, resulting from the sale of a vessel. The average daily TCEs in 2008 were $52,600 compared with $41,700 in 2007. Net interest expense for the year was $0.9 million (2007: $5.3 million) mainly due to the lower debt level.

The net decrease in cash and cash equivalents in 2008 was $4.1 million. The Company generated cash from operating activities of $69.7 million, used $9.0 million to repay loan and credit facilities, invested $17.8 million in its newbuilding project and distributed $47.0 million in dividend payments. Total dividends paid per share in 2008 were $2.75 compared to $2.50 in 2007.

The average market rate for VLCCs from MEG to Japan in the forth quarter was about WS 84 ($61,500 per day) compared to about WS 148 ($96,500 per day) in the third quarter of 2008. The first week of the quarter started with average TCE rates for modern VLCCs, according to Clarkson, of $59,800 per day while the present indications are approximately $40,000 per day.

The International Energy Agency (IEA) reported in January 2009 an average OPEC oil production, including Iraq, of 31.4 million barrels per day during the fourth quarter of the year, a decrease of about 1 million barrels per day from the third quarter. The next OPEC meeting is scheduled to take place on March 15, 2009.

According to Fearnleys, the VLCC fleet totalled 501 vessels at the end of the fourth quarter with eleven deliveries during the quarter. There are 6 additional deliveries expected to take place in the first quarter of 2009. The total order book amounted to 227 vessels at the end of the fourth quarter, down from 238 vessels after the third quarter of 2008. The current orderbook represents about 45 percent of the VLCC fleet. Two VLCC’s was deleted from the trading fleet whilst no VLCCs were ordered during the quarter. The single hull fleet amounted to 110 vessels at the end of the fourth quarter.

The Company’s VLCC fleet is fixed on time charters expiring between 2009 and 2012. One of our VLCCs will be redelivered from the charterer during March 2009. We are evaluating employment possibilities for this vessel. After ending her current time charter the vessel may be employed in the spot market prior to a new long term agreement. Two of our time charters also include a profit share arrangement hence our exposure in the spot market is limited.

As previously announced, the Company has two Capesize bulk carriers under construction at Daehan Shipbuilding Co. Ltd (“Daehan”). The total contract price is $162 million of which the Company has paid $48.6 million to date, $32.4 million of these instalments have been financed through a bank facility, while the balance of $16.2 million has been financed by equity. We have also entered into long-term time charters for employment of these vessels upon their scheduled delivery in 2009. There are still uncertainties related to the ability of Daehan to deliver these vessels on time. However we understand the yard is incorporated in a restructuring program with the Korean Development Bank (KDB).

Knightsbridge believes it is well positioned with a strong balance sheet and a steady cash flow secured by long term charter agreements. The Company is currently working to put in place financing for a portion of the remaining instalments due on the two newbuildings. The level of debt financing available may not be as high as the Company would consider optimal. Pending clarification of the level of financing available for the newbuildings, the Board has decided to take a conservative stance and has decided to reduce the dividend payment this quarter.

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

Knightsbridge desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "except," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" ”pending and similar expressions identify forward-looking statements.

The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charterhire rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in Knightsbridge’s operating expenses, including bunker prices, drydocking and insurance costs, the market for Knightsbridge’s vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by Knightsbridge with the Securities and Exchange Commission.

2007 Oct-Dec			2008 Oct-Dec			INCOME STATEMENT	2008 Jan-Dec			2007 Jan-Dec
						(in thousands of $)				(audited)

	24,201			16,109		Operating revenues		82,914			88,160
	49,119			-		Gain on sale of asset		-			49,119
						Operating expenses
	2,689			239		Voyage expenses		4,012			12,872
	4,398			3,843		Ship operating expenses		14,535			15,544
	351			392		Administrative expenses		1,538			1,481
	4,210			3,427		Depreciation		13,711			17,016
	11,648			7,901		Total operating expenses		33,796			46,913

	61,672			8,208		Net operating income		49,118			90,366

						Other income (expenses)
	262			415		Interest income		2,336			1,026
	(1,490	)		(808	)	Interest expense		(3,216	)		(6,373	)
	(91	)		(51	)	Other financial items		(184	)		(183	)
	(1,319	)		(444	)	Total other expenses		(1,064	)		(5,530	)

	60,353			7,764		Net income		48,054			84,836

	$3.53			$0.45		Earnings per share ($)		$2.81			$4.96

	46,800			43,900		Income on time charter basis ($ per day per vessel)* VLCC		52,600			41,700

BALANCE SHEET	2008 Dec 31		2007 Dec 31
(in thousands of $)			(audited)

ASSETS
Short term
Cash and cash equivalents		77,998		82,143
Restricted cash		10,000		10,000
Other current assets		4,888		15,210
Long term
Vessels, net		187,360		201,072
Newbuildings		51,305		33,459
Deferred charges		134		282
Total assets		331,685		342,166

LIABILITIES AND STOCKHOLDERS’ EQUITY
Short term
Short term debt and current portion of long-term debt		42,560		8,960
Other current liabilities		6,340		8,890
Long term
Long term interest bearing debt		60,480		103,040
Stockholders’ equity		222,305		221,276
Total liabilities and stockholders’ equity		331,685		342,166

2007 Oct-Dec			2008 Oct-Dec			STATEMENT OF CASHFLOWS (in thousands of $)	2008 Jan-Dec			2007 Jan-Dec (audited)

						OPERATING ACTIVITIES
	60,353			7,764		Net income		48,054			84,836
						Adjustments to reconcile net income to net cash provided by operating activities
	4,290			3,470		Depreciation and amortisation		13,860			17,164
	(49,119	)		-		Gain on sale of asset		-			(49,119	)
	(5,749	)		3,474		Change in operating assets and liabilities		7,773			(4,695	)
	9,775			14,708		Net cash provided by operating activities		69,687			48,186

						INVESTING ACTIVITIES
	(506	)		(580	)	Additions to newbuildings		(17,847	)		(33,459	)
	98,980			-		Proceeds from disposal of vessel		-			98,980
	98,474			(580	)	Net cash (used in) provided by investing activities		(17,847	)		65,521

						FINANCING ACTIVITIES
	-			-		Proceeds from long-term debt and credit facilities		-			33,600
	(22,400	)		(2,240	)	Repayments of long-term debt and credit facilities		(8,960	)		(30,811	)
	(8,550	)		(8,550	)	Dividends paid		(47,025	)		(42,750	)
	(12	)		-		Debt finance costs		-			(141	)
	(30,962	)		(10,790	)	Net cash used in financing activities		(55,985	)		(40,102	)

	77,287			3,338		Net (decrease) increase in cash and cash equivalents		(4,145	)		73,605
	4,856			74,660		Cash and cash equivalents at start of period		82,143			8,538
	82,143			77,998		Cash and cash equivalents at end of period		77,998			82,143

	KNIGHTSBRIDGE TANKERS LIMITED (registrant)


Dated: February 6, 2009	By: /s/ Georgina Sousa
	Name: Georgina Sousa Title: Secretary