d1356208_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 reports a net loss of $0.3 million and a loss per share of $0.01 for the fourth quarter of 2012. Excluding the results from discontinued operations, the Company reports net income of $1.3 million and earnings per share of $0.05 for the fourth quarter.

The Company reports net income from continuing operations (i.e. the Capesize vessels) of $1.3 million and earnings per share from continuing operations of $0.05 for the fourth quarter compared with net income from continuing operations of $1.7 million and earnings per share from continuing operations of $0.07 for the preceding quarter. The average daily time charter equivalent ("TCE") earned by the Company's Capesize vessels in the fourth quarter was $22,700 compared with $22,800 in the preceding quarter. In February 2013, the Company has an average cash breakeven rate for its Capesize vessels of $8,600 per vessel per day.

Following the sale of three VLCCs and the balance sheet classification of the fourth as 'held for sale', the results of the four VLCCs have been recorded as discontinued operations in accordance with U.S. generally accepted accounting principles. The Company reports a net loss from discontinued operations of $1.6 million and a loss per share from discontinued operations of $0.06 for the fourth quarter compared with a net loss from discontinued operations of $58.7 million and a loss per share from discontinued operations of $2.40 for the preceding quarter. The decrease in the loss from discontinued operations is primarily attributable to the impairment loss of $41.6 million and the loss on sale of a vessel of $12.7 million that were recorded in the third quarter. The average daily time charter equivalents earned by the Company's VLCCs, excluding bareboat charters in the fourth quarter was $9,200 compared with $1,100 in the preceding quarter.

Cash and cash equivalents increased by $11.7 million in the quarter. The Company generated cash from operating activities of $1.9 million, received $40.3 million from the sale of vessels, used $26.2 million to repay loan facilities and paid $4.3 million in distributions to shareholders.

The Company reports net income from continuing operations of $5.9 million and earnings per share from continuing operations of $0.24 for the year ended December 31, 2012 compared with net income from continuing operations of $27.1 million and earnings per share from continuing operations of $1.11 for the year ended December 31, 2011. The decrease in net income from continuing operations is primarily attributable to a decrease in Capesize vessel earnings caused by charter cancellations during the year.

The Company reports a net loss from discontinued operations of $59.3 million and a loss per share from discontinued operations of $2.43 for the year ended December 31, 2012 compared with net income from discontinued operations of $5.6 million and earnings per share from discontinued operations of $0.23 for the year ended December 31, 2011. The decrease in earnings from discontinued operations is primarily attributable to the impairment loss of $41.6 million, the full year loss on sale of vessels of $13.1 million and reduced earnings from the VLCCs, which were due in part to loss provisions for unpaid charter hire. The average daily TCEs for the Company's VLCCs, excluding bareboat charters for the year ended December 31, 2012, was $13,700 compared with $28,500 in the previous year.

The market rate for a VLCC trading on a standard 'TD3' voyage between the Arabian Gulf and Japan in the fourth quarter of 2012 was WS 42.8, representing an increase of approximately WS 7 points from the third quarter of 2012 and a decrease of approximately WS 15 points from the fourth quarter of 2011. Present market indications are approximately $8,000 per day in the first quarter of 2013.

The International Energy Agency's ("IEA") January 2013 report stated an OPEC oil production, including Iraq, of 30.9 million barrels per day (mb/d) in the fourth quarter. This was a decrease of 0.45 mb/d compared to the third quarter of 2012, due to lower Saudi Arabian production in November and December.

The IEA estimates that world oil demand averaged 91.2 mb/d in the fourth quarter of 2012, which is an increase of 1.2mb/d compared to previous quarter and the IEA estimates that world oil demand averaged approximately 89.8 mb/d in 2012, representing an increase of 1.0 percent or 0.9 mb/d from 2011. 2013 demand is expected to be 90.5 mb/d.

The VLCC fleet totalled 622 vessels at the end of the fourth quarter of 2012, up from 617 vessels at the end of the previous quarter. 11 VLCCs were delivered during the quarter, six were removed. The order book counted 81 vessels at the end of the fourth quarter, down from 91 orders from the previous quarter. The current order book represents approximately 13 percent of the VLCC fleet. According to Fearnleys, the single hull fleet is 17 vessels, five less than last quarter.

The global economy was under pressure during 2012 and the International Monetary Fund again lowered its forecast. In particular the Eurozone is struggling with high unemployment and negative growth in some of the worst hit countries. The United States has shown certain signs of recovery and also China released encouraging economic data at the end of 2012.

Dry bulk transportation increased by around seven percent in 2012, however, due to the high number of new vessels entering the market, fleet utilization decreased. Given a net fleet growth of approximately 11 percent, the estimated utilization of the dry bulk fleet was on average 83 percent in 2012. Consequently spot earnings were low. The capesize and panamax segments both earned on average approximately $7,650 per day according to The Baltic Exchange. The weak spot market and long term time charter market resulted in lower asset values throughout the year. By the end of the year a five year old capesize was valued at approximately $30 million while a similar aged panamax was worth approximately $20 million.

Around 220 capesizes and 375 panamaxes were delivered in 2012, still this was 30 percent lower than the official order book at the beginning of the year. At the same time approximately 90 capesizes and 135 panamaxes were sold for scrap. For the dry bulk fleet as a whole 35 million dwt were scrapped against 95 million dwt of deliveries.

Deliveries of new vessels will decrease sharply over the next 24 months. With the same delivery ratio we have experienced over the last three years approximately 60 million dwt should be delivered this year, while the order book for 2014 is 25 million dwt for the entire dry bulk sector. The low spot market presently experienced and relatively high scrap prices should encourage more scrapping. Most forecasters are expecting scrapping to remain at similar levels as last year and consequently net fleet growth could be as low as five percent during 2013.

The steel industry and energy coal for utilities are accounting for almost 70 percent of dry bulk transportation. For several years the importance of increased steel production and energy consumption in China and the increased dependence of this country for the dry bulk market have been well known. Also in 2012 iron ore and coal imports showed a remarkable growth. Iron ore increased by around eight percent while coal imports increased by almost 30 percent year on year. This was in spite of a much slower growth in steel and energy consumption (2 percent and 3.4 percent respectively)

There are a few factors which make most analysts fairly optimistic for dry bulk demand growth going forward. Quality of Chinese domestic iron ore production is on a steady declining trend. Since 2007 China has invested roughly $85 billion in iron ore mining. Over the same period investments per effective ton iron ore produced has increased from $15 per ton in 2007 to $60 per ton in 2012. Adjusting for falling Fe content, effective iron ore production in 2012 is broadly at the same level as in 2007. Even in a modest steel growth scenario for China most forecasters believe in a continued strong growth in iron ore imports.

The Company's fleet consists of four Capesize vessels and one VLCC. The Golden Future was redelivered from its time charter on January 4, 2013. The vessel then commenced a time charter for a minimum period of 11 months and a maximum period of 13 months at a market index based daily rate. The Battersea is employed on a short term time charter and expected to be redelivered in the second quarter of 2013. The Belgravia is employed on a long term time charter with expiry in the third quarter of 2014. The Golden Zhejiang is employed in the spot market.

On January 24, 2013, the Board granted a total of 94,476 restricted stock units (RSUs) pursuant to the 2010 Equity Plan to members of the Board and the two management companies. These RSUs will vest over three years at a rate of one third of the number of RSUs granted on each anniversary of the date of grant.

Asset prices within certain shipping segments are currently at historically low levels and the Company continues to look into acquisition opportunities in the drybulk segment where the risk / reward ratios look attractive. The recent sale of VLCCs is a part of the Company's intention to renew and grow the fleet.

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.

2011 Oct-Dec			2012 Oct-Dec			INCOME STATEMENT (in thousands of $)	2012 Jan-Dec			2011 Jan-Dec

	13,898			8,608		Operating revenues		37,315			55,497

						Operating expenses
	484			240		Voyage expenses		4,323			2,020
	2,029			2,069		Ship operating expenses		7,608			7,830
	942			1,206		Administrative expenses		4,259			3,528
	2,792			2,795		Depreciation		11,117			11,079
	6,247			6,310		Total operating expenses		27,307			24,457
	7,651			2,298		Net operating income		10,008			31,040

						Other income (expenses)
	7			49		Interest income		106			52
	(929	)		(924	)	Interest expense		(3,765	)		(3,529	)
	(125	)		(122	)	Other financial items		(475	)		(513	)
	(1,047	)		(997	)	Total other expenses		(4,134	)		(3,990	)

	6,604			1,301		Net income from continuing operations		5,874			27,050

	1,184			(1,577	)	Net (loss) income from discontinued operations		(59,303	)		5,602

	7,788			(276	)	Net (loss) income		(53,429	)		32,652

	0.27			0.05		Earnings per share from continuing operations ($)		0.24			1.11
	0.50			(0.06	)	(Loss) earnings per share from discontinued operations ($)		(2.43	)		0.23
	0.32			(0.01	)	(Loss) earnings per share ($)		(2.19	)		1.34

						Income on timecharter basis ($ per day per vessel)*
	$26,900			$9,200		VLCC (excluding bareboat charters)		$13,700			$28,500
	$36,500			$22,700		Capesize		$22,500			$36,600
						* Calender days less off-hire after deduction of broker commission

Note: EBITDA from continuing operations is defined as earnings from continuing operations before interest, taxes, depreciation and amortization of deferred charges. EBITDA from continuing operations in Q4 is calculated as $5,089,000 based on net income from continuing operations ($1,301,000), depreciation ($2,795,000), net interest expense ($875,000) and amortization of deferred charges ($118,000).

BALANCE SHEET (in thousands of $)	2012 Dec 31		2011 Dec 31

ASSETS
Short term
Cash and cash equivalents		79,259		46,848
Restricted cash		15,000		15,000
Other current assets		6,590		19,530
Long term
Vessels, net		273,826		436,273
Deferred charges		1,222		2,110
Vessel held for sale		21,523		-
Other long term assets		-		1,458

Total assets		397,420		521,219

LIABILITIES AND EQUITY
Short term
Current portion of long-term debt		4,700		3,600
Other current liabilities		6,798		7,547
Long term
Long term debt		106,978		150,140
Other long term liabilities		1,250		-
Equity		277,694		359,932

Total liabilities and equity		397,420		521,219

2011 Oct-Dec			2012 Oct-Dec			STATEMENT OF CASHFLOWS (in thousands of $)	2012 Jan-Dec			2011 Jan-Dec

						OPERATING ACTIVITIES
	7,788			(276	)	Net (loss) income		(53,429	)		32,652
						Adjustments to reconcile net (loss) income to net cash provided by operating activities;
	5,891			3,805		Depreciation and amortization		21,364			23,358
	-			409		Net loss on sale of vessels		13,088			-
	-			-		Impairment loss on vessels		41,597			-
	213			-		Amortization of time charter contract		2,303			845
	66			287		Restricted stock unit expense		906			230
	1,700			(352	)	Provision for doubtful accounts		10,155			1,700
	(5,060	)		(1,969	)	Change in operating assets and liabilities		815			(16,178	)

	10,598			1,904		Net cash provided by operating activities		36,799			42,607

						INVESTING ACTIVITIES
	-			40,281		Proceeds from sale of vessels		66,993			-

	-			40,281		Net cash provided by investing activities		66,993			-

						FINANCING ACTIVITIES
	(900	)		(26,166	)	Repayment of long-term debt		(42,062	)		(3,600	)
	-			-		Debt fees paid		-			(79	)
	(12,212	)		(4,277	)	Distributions to shareholders		(29,319	)		(48,851	)

	(13,112	)		(30,443	)	Net cash used in financing activities		(71,381	)		(52,530	)

	(2,514	)		11,742		Net increase (decrease) in cash and cash equivalents		32,411			(9,923	)
	49,362			67,517		Cash and cash equivalents at start of period		46,848			56,771
	46,848			79,259		Cash and cash equivalents at end of period		79,259			46,848

STATEMENT OF CHANGES IN EQUITY (in thousands of $)	2012 Jan-Dec			2011 Jan-Dec

NUMBER OF SHARES OUTSTANDING
Balance at beginning of period		24,425,699			24,425,699
Shares issued		11,301			-
Balance at end of period		24,437,000			24,425,699

SHARE CAPITAL
Balance at beginning of period		244			244
Shares issued		-			-
Balance at end of period		244			244

ADDITIONAL PAID IN CAPITAL
Balance at beginning of period		131,256			131,026
Shares issued		-			-
Restricted stock unit expense		510			230
Balance at end of period		131,766			131,256

CONTRIBUTED CAPITAL SURPLUS
Balance at beginning of period		179,019			179,019
Distributions to shareholders		(29,319	)		-
Balance at end of period		149,700			179,019

RETAINED (DEFICIT) EARNINGS
Balance at beginning of period		49,413			65,612
Net (loss) income		(53,429	)		32,652
Distributions to shareholders		-			(48,851	)
Balance at end of period		(4,016	)		49,413
Total Equity		277,694			359,932

	KNIGHTSBRIDGE TANKERS LIMITED




	By: /s/ Inger M. Klemp
Date: February 7, 2013	Name: Inger M. Klemp
	Title: Chief Financial Officer

Contact:	Ola Lorentzon: Chairman, Knightsbridge Tankers Limited
	+ 46 703 998886

	Inger M. Klemp: Chief Financial Officer, Knightsbridge Tankers Limited
	+47 23 11 40 76