Frontline Ltd. (the
"Company" or "Frontline"), today reported unaudited results for the
three months ended March 31, 2017:
Highlights of the
quarter
-
Achieved net income attributable to the Company
of $27.0 million, or $0.16 per share, for the first quarter of
2017.
-
Achieved net income attributable to the Company
adjusted for certain non-cash items of $27.9 million, or $0.16 per
share, for the first quarter of 2017.
-
Announces a cash dividend of $0.15 per share for
the first quarter of 2017.
-
Acquired two VLCC resales
delivering September and October 2017 from DSME, Korea at
$77.5 million net per vessel.
-
Ordered two VLCC newbuildings scheduled to be
delivered during December 2018 and April 2019 and obtained options
for two additional sister vessels scheduled to be delivered during
August and November 2019 from HHI, Korea at $79.8 million per
vessel.
-
Signed a senior secured term loan facility in an
amount of up to $321.6 million provided by China Exim Bank and
insured by China Export and Credit Insurance Corporation to
partially finance eight newbuildings.
-
Obtained further financing commitment for two
senior secured term loan facilities in an aggregate amount of up to
$221.0 million from Credit Suisse and ING to partially finance four
recent VLCC resales and newbuilding contracts.
Robert Hvide Macleod, Chief
Executive Officer of Frontline Management AS commented:
"Notwithstanding near-term
pressure on crude tanker rates, we believe the market will
ultimately return to balance as demand for crude oil continues to
increase and vessel scrapping will begin to offset the negative
effect of newbuilding deliveries. The recent market weakness and
other factors have contributed to a historically low asset price
environment that has presented us with opportunities to acquire
modern tonnage at attractive prices.
We are pleased that we continue to
grow our fleet while also divesting of older vessels, as we
recently did with the charter termination of four VLCC's and two
Suezmax tankers, vessels which have put pressure on our earnings
lately and particularly in the first quarter. As we have
stated before, older vessels are increasingly difficult to trade, a
fact that is amplified in a softer rate environment. In the
last 12 months, we have taken steps to both grow and modernize our
fleet through six resale purchases and newbuilding contracts.
We will continue to strive to create value for our shareholders by
expanding our fleet through accretive transactions.
Notwithstanding any potential
outcome related to our proposal to effect a business combination
with DHT, there are many opportunities to continue our strategy of
fleet growth and renewal, and we are confident in our ability to
execute on this strategy."
Inger M. Klemp, Chief Financial
Officer of Frontline Management AS, added:
"Frontline's
continued ability to access attractively priced capital is
indicative of the financial strength of our platform as well as our
deep relationships within the lending community. We are very
pleased to have secured financing for the newly acquired four VLCC
resales and newbuilding contracts in an amount of up to $221.0
million. The financing carries an interest rate of LIBOR plus
a margin of 190 basis points and has an amortization profile of 18
years, which supports Frontline's low cash break-even
levels."
The average daily time charter
equivalents ("TCE") earned by Frontline in the quarter ended March
31, 2017 and the prior quarter are shown below, along with the
estimated average daily break-even ("BE") rates:
($
per day) |
Spot and time charter |
Spot |
Spot
Guidance |
%
covered |
|
Estimated
average daily BE rates |
|
Q1
2017 |
Q4
2016 |
Q1
2017 |
Q4
2016 |
Q2
2017 |
|
2017 |
VLCC |
34 400 |
32 900 |
34 700 |
32 200 |
25 000 |
64 % |
|
22 300 |
SMAX |
23 400 |
23 500 |
22 200 |
21 700 |
16 000 |
61 % |
|
17 300 |
LR2 |
22
400 |
22
700 |
19 000 |
18
800 |
14 000 |
67 % |
|
15 500 |
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
Forward-Looking
Statements
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.