FRO - THIRD QUARTER AND NINE MONTHS 2014 RESULTS
(Thomson Reuters ONE) -
Highlights
* Frontline reports a net loss attributable to the Company of $59.6 million
for the third quarter of 2014, equivalent to a loss per share of $0.60.
* Frontline reports a net loss attributable to the Company of $14.5 million
for the third quarter of 2014, when excluding impairment losses and loss on
de-consolidation of the Windsor group of $45.2 million, equivalent to a loss
per share of $0.15.
* Frontline reports a net loss attributable to the Company of $150.0 million
for the nine months ended September 30, 2014, equivalent to a loss per share
of $1.55.
* Frontline reports a net loss attributable to the Company of $48.6 million
for the nine months ended September 30, 2014, when excluding impairment
losses and loss on de-consolidation of the Windsor group of $101.4 million,
equivalent to a loss per share of $0.50.
* Frontline has issued 1,140,226 new shares under the ATM program in the third
quarter.
* Frontline agreed with Ship Finance in July 2014 to terminate the long term
charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and
Front Commerce and Ship Finance simultaneously sold the vessels to unrelated
third parties. The charter parties for the Front Commerce, Front Comanche
and Front Opalia terminated on November 4, November 12 and November 19,
respectively.
* In October 2014, the Company bought $17.8 million notional principal of its
4.50 % Convertible Bond Issue 2010/2015 at a purchase price of 91.654%.
* In October 2014, Frontline entered into a private agreement to exchange
$23.0 million of the Company's 4.5% Convertible Bond for an aggregate of
8,251,724 shares and a cash payment of $10 million plus accrued interest.
Third Quarter and Nine Months 2014 Results
The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss
attributable to the Company of $59.6 million in the third quarter, equivalent to
a loss per share of $0.60, compared with a net loss of $78.2 million for the
second quarter, equivalent to a loss per share of $0.81.
The Company has recorded a vessel impairment loss of $41.5 million in the three
months ended September 30, 2014. This loss relates to the VLCCs Front Opalia,
Front Commerce, Front Comanche and Ulriken. Impairment losses are taken when
events or changes in circumstances occur that cause the Company to believe that
future cash flows for an individual vessel will be less than its carrying value
and not fully recoverable. In such instances an impairment charge is recognized
if the estimate of the undiscounted cash flows expected to result from the use
of the vessel and its eventual disposition is less than the vessel's carrying
amount.
The average daily time charter equivalents ("TCEs") earned in the spot and
period market in the third quarter by the Company's VLCCs and Suezmax tankers
were $24,600 and $18,600 compared with $13,900 and $12,400 in the preceding
quarter. The spot earnings for the Company's VLCCs and Suezmax vessels were
$23,900 and $19,500 compared with $12,500 and $12,400 in the preceding quarter.
Contingent rental expense represents amounts accrued following changes to
certain charter parties in December 2011 and increased in the third quarter as
compared to the second quarter primarily due to an increase in actual spot
market rates.
Interest expense, net of capitalized interest, was $26.4 million in the third
quarter of which $10.7 million relates to the Company's subsidiary Independent
Tankers Corporation Limited ("ITCL").
Frontline announces a net loss attributable to the Company of $150.0 million for
the nine months ended September 30, 2014, equivalent to a loss per share of
$1.55. The average daily TCEs earned in the spot and period market in the nine
months ended September 30, 2014 by the Company's VLCCs and Suezmax tankers were
$23,800 and $19,300 compared with $15,800 and $13,600 in the nine months ended
September 30, 2013. The spot earnings for the Company's VLCCs and Suezmax
vessels were $23,000 and $19,700 in the nine months ended September 30, 2014
compared with $13,300 and $13,600, respectively, in the nine months ended
September 30, 2013.
As of September 30, 2014, the Company had total cash and cash equivalents of
$104.6 million and restricted cash of $16.1 million. Restricted cash includes
$15.3 million relating to deposits in ITCL.
The Company estimates average total cash cost breakeven rates for the remainder
of 2014 on a TCE basis for VLCCs and Suezmax tankers of approximately $22,900
and $18,100, respectively.
Fleet Development
The Company has de-consolidated several of the subsidiaries and related entities
in the Windsor group (the "Windsor group"), owned by ITCL in the third quarter
of 2014 as a consequence of the Chapter 11 filing and the fact the Windsor group
is consolidated under the variable interest entity model. The Company has
recorded a Loss on de-consolidation in the third quarter of $3.6 million. The
Company will enter into a revised management agreement with the reorganized
Windsor group and will continue to provide commercial management for its
vessels.
In July 2014, the Company agreed with Ship Finance to terminate the long term
charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and Front
Commerce and Ship Finance simultaneously sold the vessels to unrelated third
parties. The charter parties for the Front Commerce Front Comanche and Front
Opalia terminated on November 4, November 12 and November 19, respectively.
Newbuilding Program
The Company had one Suezmax newbuilding contract with estimated delivery during
January 2015 and is committed to make newbuilding installments of $40.9 million
as of the date of this report.
Corporate
The Company issued 1,140,226 new ordinary shares under its ATM program in the
three months ended September 30, 2014 and had an issued share capital at
September 30, 2014 of $99,346,513 divided into 99,346,513 ordinary shares
(December 31, 2013: $86,511,713 divided into 86,511,713 ordinary shares). The
weighted average number of shares outstanding for the quarter was 99,261,267.
In October 2014, the Company bought $17.8 million notional principal in the
4.50 % Frontline Ltd. Convertible Bond Issue 2010/2015 - ISIN NO 001057149.0 at
a purchase price of 91.654%.
In October 2014, the Company entered into a private agreement to exchange $23.0
million of the outstanding principal amount of the Company's 4.5% Convertible
Bond Issue 2010/2015 for an aggregate of 8,251,724 shares and a cash payment of
$10 million plus accrued interest.
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 2014 was WS 45, representing an
increase of WS 7 point from the second quarter of 2014 and WS 9 higher than the
third quarter of 2013. The flat rate decreased by 6.7 percent from 2013 to 2014.
The market rate for a Suezmax trading on a standard 'TD5' voyage between West
Africa and Philadelphia in the third quarter of 2014 was WS 71, representing an
increase of WS 8 points from the second quarter of 2014 and an increase of WS
15 points from the third quarter of 2013. The flat rate decreased by 6 percent
from 2013 to 2014.
Bunkers at Fujairah averaged $598/mt in the third quarter of 2014 compared to
$601/mt in the second quarter of 2014. Bunker prices varied between a high of
$628/mt on July 24(th) and a low of $575/mt on September 29(th).
The International Energy Agency's ("IEA") November 2014 report stated an OPEC
crude production of 30.5 million barrels per day (mb/d) in the third quarter of
2014. This was an increase of 0.4 mb/d compared to the second quarter of 2014.
The IEA estimates that world oil demand averaged 93.1 mb/d in the third quarter
of 2014, which is an increase of 1.6 mb/d compared to the previous quarter. IEA
estimates that world oil demand in 2015 will be 93.6 mb/d, representing an
increase of 1.3 percent or 1.2 mb/d from 2014.
The VLCC fleet totalled 634 vessels at the end of the third quarter of 2014,
four vessels up from the previous quarter. Four VLCCs were delivered during the
quarter, none were removed. The order book counted 93 vessels at the end of the
third quarter, which represents 15 percent of the VLCC fleet.
The Suezmax fleet totalled 450 vessels at the end of the third quarter, up two
from the end of the previous quarter. Three vessels were delivered during the
quarter whilst one was removed. The order book counted 44 vessels at the end of
the third quarter, which represents approximately 10 percent of the Suezmax
fleet.
Strategy and Outlook
In October 2014, Frontline reduced the outstanding under the convertible bond
loan with maturity in April 2015 from $190 million to $149.2 million through buy
back and debt/equity swap. Following this, and the termination of the three
charter parties for Front Commerce, Front Comanche and Front Opalia in November
2014 total debt and capital lease obligations are approximately $956 million.
The tanker market has showed some strength in the fourth quarter. A strong
market creates some flexibility for the Company going forward. The Board is
continuing to consider several alternatives in restructuring the Company's debt
and capital lease obligations. The target is to rebuild Frontline into being a
leading tanker company.
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.
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
November 24, 2014
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
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
3rd Quarter 2014 Results:
http://hugin.info/182/R/1873959/660106.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire 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 GlobeNewswire
[HUG#1873959]
Unternehmensinformation / Kurzprofil:
Datum: 25.11.2014 - 08:36 Uhr
Sprache: Deutsch
News-ID 355199
Anzahl Zeichen: 13660
contact information:
Town:
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Kategorie:
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