Frontline Ltd. (the "Company" or "Frontline"), today reported unaudited results for the three and six months ended June 30, 2016:
- Achieved net income attributable to the Company of $14.3 million, or $0.09 per share, for the second quarter of 2016 and $93.2 million, or $0.60 per share, for the six months ended June 30, 2016.
- Achieved net income attributable to the Company adjusted for certain non-cash charges of $48.7 million, or $0.31 per share, for the second quarter of 2016 and $138.1 million, or $0.88 per share, for the six months ended June 30, 2016.
- Announces a cash dividend of $0.20 per share for the second quarter of 2016.
- Secured bank financing of up to $548 million and is in the final stages of obtaining approval for further bank financing of up to $325 million to part finance twenty newbuilding contracts.
- Sold six medium range tankers for an aggregate price of $172.5 million to an unaffiliated third party.
- Acquired two VLCC newbuildings for a purchase price of $84 million each.
Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented:
"In the second quarter the tanker market experienced a downward pressure on rates which has continued into the third quarter. While these are quarters typically characterized by seasonal weakness, the market was also affected by crude oil supply disruptions in the Atlantic basin, high levels of crude inventories, 13 vessels delivering from the newbuilding fleet and easing congestion in ports around the world. All factors considered, the tanker market has been reasonably well balanced, and we are encouraged by our performance in the second quarter. The spot market is currently at a 24 month low, and although we expect the rate environment to improve from current levels, the second half of 2016 will be significantly weaker than the first half of the year. We remain focused on maintaining our competitive breakeven levels and strong balance sheet. Frontline's scale, strong shareholder base and cost-effective operations are significant strengths that position us well in the tanker market."
The average daily time charter equivalents ("TCE") earned by Frontline in the second quarter are shown below:
|Average daily time charter equivalents ("TCEs")|
|($ per day)||Spot and time charter||Spot||Spot Guidance||% covered||Estimated average daily BE rates|
|Q2 2016||Q1 2016||Q2 2016||Q1 2016||Q3 2016||2016|
|VLCC||45 200||65 400||48 100||70 200||30 800||76 %||21 200|
|SMAX||30 300||32 000||28 600||33 400||19 000||81 %||17 200|
|LR2||24 300||24 700||22 300||24 800||22 500||79 %||15 100|
|MR||16 300||19 800||16 000||20 300||15 000||88 %||13 700|
Inger M. Klemp, Chief Financial Officer of Frontline Management AS, added:
"We are very pleased to have secured bank financing of up to $548 million. We are also in what we expect to be the final stages of obtaining approval for further bank financing of up to $325 million. This new financing will partially finance 20 of our newbuilding contracts at highly attractive terms and we maintain our very low cash breakeven levels. STX recently applied for court receivership, and it is unclear whether the four VLCC newbuildings under contract at this shipyard will be delivered. These vessels have therefore not yet been financed."
The full report can be found in the link below.
Questions should be directed to:
Robert Hvide Macleod: Chief Executive Officer, Frontline Management AS
+47 23 11 40 84
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76
Matters discussed in this press release may constitute forward-looking statements. 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. Words, such as, but not limited to "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Frontline believes 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 the control of Frontline, Frontline cannot assure you that they will achieve or accomplish these expectations, beliefs or projections. The information set forth herein speaks only as of the date hereof, and Frontline disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Frontline Ltd. via Globenewswire