Click here to close now.



Welcome!

Microsoft Cloud Authors: David Bermingham, Dana Gardner, Jayaram Krishnaswamy, Pat Romanski, Adine Deford

News Feed Item

FRO - Third Quarter and Nine Months 2012 Results

HAMILTON, BERMUDA -- (Marketwire) -- 11/29/12 --


Highlights

* Frontline reports a net loss attributable to the Company of $49.0 million for the third quarter of 2012, equivalent to a loss per share of $0.63.

* Frontline reports a net loss attributable to the Company of $66.2 million for the nine months ended September 30, 2012, equivalent to a loss per share of $0.85.

* Frontline will not pay a dividend for the third quarter of 2012.

* In August and October 2012, Frontline agreed to terminate the long term charter parties with Ship Finance for the OBO carriers Front Climber and Front Driver, respectively.

* In September 2012, Frontline agreed with NAT that Frontline's nine Suezmax vessels will leave the Orion Suezmax pool.

Third Quarter and Nine Months 2012 Results

The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss attributable to the Company of $49.0 million for the third quarter of 2012, equivalent to a loss per share of $0.63, compared with a net loss, excluding impairment losses, attributable to the Company of $11.2 million and a loss per share of $0.14 for the preceding quarter. The net loss attributable to the Company in the third quarter includes a gain on sale of assets and amortization of deferred gains of $3.3 million, which includes an aggregate deferred gain of $3.8 million relating to the sale and leasebacks of DHT Eagle (ex Front Eagle) and Gulf Eyadah (ex Front Shanghai).The net loss attributable to the Company in the preceding quarter includes a gain on sale of assets and amortization of deferred gains of $5.1 million, which includes an aggregate deferred gain of $3.8 million relating to the sale and leasebacks of DHT Eagle and Gulf Eyadah. The net loss attributable to the Company in the preceding quarter also include an impairment loss of $13.1 million.

The average daily time charter equivalents ("TCEs") earned in the spot and period market in the third quarter by the Company's VLCCs, Suezmax tankers and Suezmax OBO carriers were $12,300, $10,500 and $33,700, respectively, compared with $31,000, $16,200 and $28,100, respectively, in the preceding quarter. The spot earnings for the Company's double hull VLCCs and Suezmax vessels were $13,300 and $10,500, respectively, compared with $31,500 and $16,200, respectively, in the preceding quarter. The Orion Suezmax pool had spot earnings of $11,100 compared with $17,400 in the second quarter.

The contingent rental expense relates to the amended charter parties with Ship Finance International Limited ("Ship Finance") and the amended charter parties for four leased vessels and is based on the difference between the renegotiated rates and the actual TCE revenues up to the original contract rates.

Ship operating expenses increased by $1.2 million compared with the preceding quarter mainly due to an increase in running costs.

Charter hire expenses decreased by $1.2 million compared with the preceding quarter primarily as a result of redelivery of the chartered-in VLCC Hampstead on April 22, 2012.

Interest expense, net of capitalized interest, was $23.5 million in the third quarter of which $5.6 million relates to the Company's subsidiary Independent Tankers Corporation Limited ("ITCL").

Frontline announces a net loss attributable to the Company of $66.2 million for the nine months ended September 30, 2012, equivalent to a loss per share of $0.85. The average daily TCEs earned in the spot and period market in the nine months ended September 30, 2012 by the Company's VLCCs, Suezmax tankers and Suezmax OBO carriers were $23,200, $15,500, and $33,300, respectively, compared with $24,000, $14,200 and $35,300, respectively, in the nine months ended September 30, 2011. The spot earnings for the Company's double hull VLCCs and Suezmax vessels were $23,700 and $15,500, respectively, in the nine months ended September 30, 2012. The Orion Suezmax pool had spot earnings of $15,300 per day.

As of September 30, 2012, the Company had total cash and cash equivalents of $164.5 million and restricted cash of $75.7 million. Restricted cash includes $74.2 million relating to deposits in ITCL.

The Company estimates average cash cost breakeven rates for the remainder of 2012 on a TCE basis for its VLCCs and Suezmax tankers of approximately $23,400 and $16,200, respectively.

Fleet Development

In August, 2012, the Company announced that it had agreed with Ship Finance to terminate the long term charter party for the OBO carrier Front Climber and that Ship Finance had simultaneously sold the vessel. The charter party was terminated on October 15, 2012. The Company made a compensation payment to Ship Finance of approximately $0.6 million for the early termination of the charter. The transaction will reduce the Company's obligations under capital leases by $1.7 million and the Company recorded an impairment loss of $4.2 million in the second quarter.

In September 2012, the Company agreed with Nordic American Tankers Ltd ("NAT") that Frontline's nine Suezmax vessels will leave the Orion Suezmax pool due to Frontline's wish to be more flexible in the operation of its vessels. NAT will acquire Frontline's 50 percent shareholding in Orion Tankers Ltd., the pool manager, at its nominal book cost effective January 1, 2013.

In October, 2012, the Company announced that it had agreed with Ship Finance to terminate the long term charter party for the OBO carrier Front Driver and that Ship Finance had simultaneously sold the vessel. The charter party is expected to terminate in late November 2012. Frontline will make a compensation payment to Ship Finance of approximately $0.5 million for the early termination of the charter. The transaction will reduce the Company's obligations under capital leases by approximately $1.1 million and the Company expects to record a loss of approximately $0.1 million.

In October, 2012 the Company terminated the bareboat charters on the two single hull VLCCs Ticen Ocean (renamed Front Lady) and Ticen Aries (renamed Edinburgh) and the vessels will be delivered to the buyers (as announced in September, 2011) in the end of November 2012 and January 2013, respectively.

Newbuilding Program

As of November 28, 2012, the Company's newbuilding program comprised two Suezmax tankers, and the Company was committed to make newbuilding installments of $94.2 million with expected payments of $6.3 million in 2012 and $87.9 million in 2013.

Corporate

The Board of Directors has decided not to declare a dividend for the third quarter of 2012.

A resolution was approved at the Company's 2012 Annual General Meeting on September 21, 2012 such that the share premium account was reduced from $225.8 million to nil and the amount resulting from the reduction be credited to the contributed surplus account with immediate effect.

77,858,502 ordinary shares were outstanding as of September 30, 2012, and the weighted average number of shares outstanding for the quarter was 77,858,502.

The Market

The market rate for a VLCC trading on a standard 'TD3' voyage between the Arabian Gulf and Japan in the third quarter of 2012 was WS 36, representing a decrease of approximately WS 19 points from the second quarter of 2012 and a decrease of approximately WS 22 points from the third quarter of 2011. Present market indications are approximately $11,000 per day in the fourth quarter of 2012.

The market rate for a Suezmax trading on a standard 'TD5' voyage between West Africa and Philadelphia in the third quarter of 2012 was WS 59.5, representing a decrease of approximately WS 13.5 points from the second quarter of 2012 and a decrease of WS 10 points from the third quarter of 2011. Current market forward rates indicate TD5 fourth quarter returns in line with third quarter.

Bunkers at Fujairah averaged $650/mt in the third quarter of 2012 compared to $662/mt in the second quarter of 2012. Bunker prices varied between a low of $590/mt on July 2 and a high of $697/mt on September 4.

The International Energy Agency's ("IEA") November 2012 report stated an OPEC oil production, including Iraq, of 31.4 million barrels per day (mb/d) in the third quarter. This was unchanged from the previous quarter.

The IEA estimates that world oil demand averaged 90.1 mb/d in the third quarter of 2012, which is an increase of 1.3 mb/d compared to previous quarter and the IEA estimates that world oil demand will average approximately 89.7 mb/d in 2012, representing an increase of 0.9 percent or 0.8 mb/d from 2011. 2013 demand is expected to be 90.5 mb/d.

The VLCC fleet totalled 617 vessels at the end of the third quarter of 2012, up from 610 vessels at the end of the previous quarter. Ten VLCCs were delivered during the quarter, three were removed. The order book counted 91 vessels at the end of the third quarter, down from 95 orders from the previous quarter. The current order book represents approximately 15 percent of the VLCC fleet. According to Fearnley's, the single hull fleet is 22 vessels, one less than previous quarter.

The Suezmax fleet counts 462 vessels at the end of the third quarter, up from 459 vessels at the end of the previous quarter. Ten vessels were delivered during the quarter whilst seven were removed. The order book counted 63 vessels at the end of the third quarter, down from 79 vessels at the end of the previous quarter. The current order book represents 14 percent of the total fleet. According to Fearnley's, the single hull fleet stands unchanged at nine vessels.

Strategy and Outlook

The tanker market has shown a strong negative development in the last four years. Several tanker companies are already experiencing severe problems. If the weak market continues it is likely to lead to significant financial problems for the whole tanker industry. We have recently experienced that VLCC spot rates have risen, but spot rates for Suezmax and Aframax tankers have seen little movement.

Consensus is that the recent rate spike could be short lived and that recovery in the crude tanker market could take some time. In order for sustainable recovery to happen substantial scrapping of vessels must take place.

Frontline will continue to remain cautious and focus its resources on the present activities until a clearer sign of recovery can be seen in the tanker market.

Based on results achieved so far in the fourth quarter and the current outlook, the Board expects the operating result in the fourth quarter to show some improvement compared with the third quarter.

The full report is available for download in the link enclosed

The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
November 28 2012

Forward Looking Statements

This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Frontline management's examination of historical operating trends. Although Frontline believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Frontline cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.

Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire 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 the Company's operating expenses including bunker prices, dry-docking and insurance costs, 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 the Company with the United States Securities and Exchange Commission.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

3rd Quarter 2012 Results:

http://hugin.info/182/R/1661267/538165.pdf

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Frontline Ltd. via Thomson Reuters ONE

[HUG#1661267]

Questions should be directed to:
Jens Martin Jensen
Chief Executive Officer
Frontline Management AS
+47 23 11 40 99

Inger M. Klemp
Chief Financial Officer
Frontline Management AS
+47 23 11 40 76

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Most people haven’t heard the word, “gamification,” even though they probably, and perhaps unwittingly, participate in it every day. Gamification is “the process of adding games or game-like elements to something (as a task) so as to encourage participation.” Further, gamification is about bringing game mechanics – rules, constructs, processes, and methods – into the real world in an effort to engage people. In his session at @ThingsExpo, Robert Endo, owner and engagement manager of Intrepid D...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including clou...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
SYS-CON Events announced today that VAI, a leading ERP software provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. VAI (Vormittag Associates, Inc.) is a leading independent mid-market ERP software developer renowned for its flexible solutions and ability to automate critical business functions for the distribution, manufacturing, specialty retail and service sectors. An IBM Premier Business Part...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Learn how IoT, cloud, social networks and last but not least, humans, can be integrated into a seamless integration of cooperative organisms both cybernetic and biological. This has been enabled by recent advances in IoT device capabilities, messaging frameworks, presence and collaboration services, where devices can share information and make independent and human assisted decisions based upon social status from other entities. In his session at @ThingsExpo, Michael Heydt, founder of Seamless...
The IoT's basic concept of collecting data from as many sources possible to drive better decision making, create process innovation and realize additional revenue has been in use at large enterprises with deep pockets for decades. So what has changed? In his session at @ThingsExpo, Prasanna Sivaramakrishnan, Solutions Architect at Red Hat, discussed the impact commodity hardware, ubiquitous connectivity, and innovations in open source software are having on the connected universe of people, thi...
WebRTC: together these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at WebRTC Summit, Cary Bran, VP of Innovation and New Ventures at Plantronics and PLT Labs, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it may enable, complement or entirely transform.
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, showed how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants received the download information, scripts, and complete end-t...
For manufacturers, the Internet of Things (IoT) represents a jumping-off point for innovation, jobs, and revenue creation. But to adequately seize the opportunity, manufacturers must design devices that are interconnected, can continually sense their environment and process huge amounts of data. As a first step, manufacturers must embrace a new product development ecosystem in order to support these products.
Manufacturing connected IoT versions of traditional products requires more than multiple deep technology skills. It also requires a shift in mindset, to realize that connected, sensor-enabled “things” act more like services than what we usually think of as products. In his session at @ThingsExpo, David Friedman, CEO and co-founder of Ayla Networks, discussed how when sensors start generating detailed real-world data about products and how they’re being used, smart manufacturers can use the dat...
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT’s direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Buildi...