FRO - Fourth Quarter and Full Year 2014 Results
(Thomson Reuters ONE) -
Highlights
* Frontline reports a net loss attributable to the Company of $13.0 million
for the fourth quarter of 2014, equivalent to a loss per share of $0.12.
* Frontline reports a net loss attributable to the Company of $13.7 million
for the fourth quarter of 2014, when excluding a non-cash gain of $40.3
million arising on the termination of the charter parties for Front Opalia,
Front Comanche and Front Commerce, a non-cash gain of $1.5 million arising
on the convertible bond buy back in October and a non-cash loss of $41.1
million arising on the convertible bond swaps in October and December,
equivalent to a loss per share of $0.13.
* Frontline reports a net loss attributable to the Company of $162.9 million
for the year ended December 31, 2014, equivalent to a loss per share of
$1.63.
* Frontline reports a net loss attributable to the Company of $37.9 million
for the year ended December 31, 2014, when excluding 'one time' gains and
losses equivalent to a loss per share of $0.38.
* 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 and December 2014, the Company entered into private agreements to
exchange $45.5 million of the Company's 4.50% Convertible Bond for an
aggregate of 12,996,476 shares and an aggregate cash payment of $19.6
million plus accrued interest.
* In January 2015, Frontline took delivery of its second and final Suezmax
newbuilding, Front Idun.
* Frontline issued 10,009,703 and 902,744 new shares under its ATM program
during January 2015 and February 2015, respectively.
* In January 2015, the Company's ATM program was increased to having aggregate
sales proceeds of up to $150.0 million, from up to $100.0 million.
* In February 2015, the Company bought $33.3 million notional principal of its
4.50% Convertible Bond Issue 2010/2015 at a purchase price of 99%.
Fourth Quarter and Full Year 2014 Results
The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss
attributable to the Company of $13.0 million in the fourth quarter, equivalent
to a net loss per share of $0.12, compared with a net loss of $59.6 million for
the third quarter, equivalent to a loss per share of $0.60. Net income
attributable to the Company in the fourth quarter includes a non-cash gain of
$40.3 million arising on the termination of the charter parties for Front
Opalia, Front Comanche and Front Commerce, a non-cash gain of $1.5 million
arising on the convertible bond buy back in October and a non-cash loss of $41.1
million arising on the convertible bond swaps in October and December. The net
loss attributable to the Company in the third quarter includes a vessel
impairment loss of $41.5 million and a loss arising on the de-consolidation of
the Windsor group of $12.4 million.
The average daily time charter equivalents ("TCEs") earned in the spot and
period market in the fourth quarter by the Company's VLCCs and Suezmax tankers
were $27,900 and $26,000 compared with $24,600 and $18,600 in the preceding
quarter. The spot earnings for the Company's VLCCs and Suezmax vessels were
$27,400 and $27,200 compared with $23,900 and $19,500 in the preceding quarter.
Contingent rental expense represents amounts accrued following changes to
certain charter parties in December 2011 and increased in the fourth quarter as
compared to the third quarter primarily due to an increase in actual spot market
rates.
Interest expense, net of capitalized interest, was $15.4 million in the fourth
quarter of which $0.8 million relates to the Company's subsidiary Independent
Tankers Corporation Limited ("ITCL").
Frontline announces a net loss attributable to the Company of $162.9 million for
the year ended December 31, 2014, equivalent to a loss per share of $1.63
compared with a net loss attributable to the Company of $188.5 million for the
year ended December 31, 2013, equivalent to a loss per share of $2.36. Frontline
reports a net loss of $37.9 million for the year ended December 31, 2014,
equivalent to a loss per share of $0.38 when the following 'one time' gains and
losses are excluded - impairment losses and loss on de-consolidation of the
Windsor group of $110.1 million, a non-cash gain of $40.3 million arising on the
termination of the charter parties for Front Opalia, Front Comanche and Front
Commerce, a non-cash gain of $1.5 million arising on the convertible bond buy
back in October, a non-cash loss of $41.1 million arising on the convertible
bond swaps in October and December and a loss of $15.7 million incurred in the
first quarter on the sale of Ulysses. The average daily TCEs earned in the spot
and period market in the year ended December 31, 2014 by the Company's VLCCs and
Suezmax tankers were $24,800 and $21,100 compared with $17,400 and $13,400 in
the year ended December 31, 2013. The spot earnings for the Company's VLCCs and
Suezmax vessels were $24,100 and $21,500 in the year ended December 31, 2014
compared with $15,400 and $13,400, respectively, in the year ended December
31, 2013.
As of December 31, 2014, the Company had total cash and cash equivalents of
$64.1 million and restricted cash of $42.1 million. Restricted cash includes
$41.1 million relating to deposits in ITCL.
In February 2015, the Company estimates average total cash cost breakeven rates
for the remainder of 2015 on a TCE basis for VLCCs and Suezmax tankers of
approximately $26,400 and $19,400, respectively.
Fleet Development
In September 2014, the Company agreed to sell the VLCC Ulriken (ex Antares
Voyager) to an unrelated third party and recorded an impairment loss of $12.4
million in the third quarter. The vessel was delivered to the new owners in
October 2014.
Pursuant to an early termination agreement between three of the Company's
subsidiaries, which were accounted for under the equity method, and Chevron; (1)
the bareboat charters for the Altair Voyager, Cygnus Voyager and Sirius Voyager
were terminated as of October 1, 2014; (2) the charter hire payments paid in
connection with the early termination agreement were used to redeem the
remaining outstanding debt related to these vessels; and (3) the three vessels
were sold. This transaction was cash neutral to the Company, except for an
amount of $0.6 million which became available to the Company.
The charter parties for the Front Commerce, Front Comanche and Front Opalia
terminated on November 4, November 12 and November 19, respectively. These
terminations resulted in a non-cash gain of $40.3 million in the fourth quarter.
Newbuilding Program
At December 31, 2014, the Company had one Suezmax newbuilding contract and was
committed to make newbuilding installments of $40.9 million. The Company took
delivery of this newbuilding, Front Idun, in January 2015 and drew down the
remaining $30.0 million balance on its $60.0 million term loan facility in order
to part finance this vessel.
Corporate
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%. This
transaction resulted in a non-cash gain of $1.5 million in the fourth quarter.
In October 2014 and December 2014, the Company entered into private agreements
to exchange $45.5 million of the outstanding principal amount of the Company's
4.50% Convertible Bond Issue 2010/2015 for an aggregate of 12,996,476 shares and
a cash payment of $19.6 million plus accrued interest. These bond exchanges
resulted in a non-cash loss of $41.1 million in the fourth quarter.
The Company had an issued share capital at December 31, 2014 of $112,342,989
divided into 112,342,989 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 105,667,604.
In January 2015, the Company filed with the United States Securities and
Exchange Commission a prospectus supplement covering the second amendment and
restatement of its previously announced equity distribution agreement with
Morgan Stanley & Co. LLC, ("Morgan Stanley"), under which the amount of new
ordinary shares the Company may offer and sell, at any time and from time to
time through Morgan Stanley in an at-the-market offering, was increased to
having aggregate sales proceeds of up to $150.0 million, from up to $100.0
million.
Frontline issued 10,009,703 and 902,744 new shares under the ATM during January
2015 and February 2015, respectively. Following such issuance, Frontline has an
issued share capital of $123,255,436 divided into 123,255,436 ordinary shares.
In February 2015, the Company bought $33.3 million notional principal of its
4.50% Convertible Bond Issue 2010/2015 at a purchase price of 99%.
The Market
The market rate for a VLCC trading on a standard 'TD3' voyage between the
Arabian Gulf and Japan in the fourth quarter of 2014 was WS 52, representing an
increase of WS 7 points from the third quarter of 2014 and WS 1 point lower than
the fourth 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 fourth quarter of 2014 was WS 87, representing an
increase of WS 16 points from the third quarter of 2014 and an increase of WS
21 points from the fourth quarter of 2013. The flat rate decreased by 6 percent
from 2013 to 2014.
Bunkers at Fujairah averaged $447/mt in the fourth quarter of 2014 compared to
$598/mt in the third quarter of 2014. Bunker prices varied between a high of
$568/mt on the 1(st) of October and a low of $320/mt on December 19(th).
The International Energy Agency's ("IEA") February 2015 report stated an OPEC
crude production of 30.5 million barrels per day (mb/d) in the fourth quarter of
2014. This was unchanged from third quarter of 2014.
The IEA estimates that world oil demand averaged 93.5 mb/d in the fourth quarter
of 2014, which is an increase of 0.4 mb/d compared to the previous quarter. IEA
estimates that world oil demand in 2015 will be 93.4 mb/d, representing an
increase of 1.1 percent or 1 mb/d from 2014.
The VLCC fleet totalled 638 vessels at the end of the fourth quarter of 2014,
four vessels up from the previous quarter. Five VLCCs were delivered during the
quarter, one was removed. The order book counted 82 vessels at the end of the
fourth quarter, which represents approximately 13 percent of the VLCC fleet.
The Suezmax fleet totalled 450 vessels at the end of the fourth quarter, same as
at the end of the previous quarter. Two vessels were delivered during the
quarter whilst two were removed. The order book counted 63 vessels at the end of
the fourth quarter, which represents approximately 14 percent of the Suezmax
fleet.
Strategy and Outlook
In the fourth quarter of 2014 and in the first quarter of 2015, the Company
reduced the outstanding balance on its convertible bond loan, which matures in
April 2015, from $190.0 million at September 30, 2014 to $93.4 million through
bond buy backs and debt/equity swaps. Based on existing cash resources, cash
expected to be generated from operations and monetizing or borrowing against
shares in Frontline 2012 Ltd., the Board is confident that Frontline will be
able to repay all of its convertible bond loan in April 2015.
The target is to rebuild Frontline into a leading tanker company.
The continued positive development in the crude tanker market into the first
quarter is likely to give an improved operating result (excluding one time gains
and losses) in the first quarter.
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
February 25, 2015
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
This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
4th Quarter 2014 Results:
http://hugin.info/182/R/1897541/673501.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#1897541]
Unternehmensinformation / Kurzprofil:
Datum: 26.02.2015 - 08:45 Uhr
Sprache: Deutsch
News-ID 374424
Anzahl Zeichen: 16738
contact information:
Town:
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Kategorie:
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