FRNT - Fourth Quarter and Full Year 2014 Results

(Thomson Reuters ONE) -


Highlights
* Frontline 2012 reports net income attributable to Frontline 2012 of $23.4
million and earnings per share of $0.10 for the fourth quarter of 2014,
excluding goodwill impairment loss of $149.5 million.
* Frontline 2012 reports net income attributable to Frontline 2012 of $234.0
million and earnings per share of $0.95 for the year ended December
31, 2014, excluding goodwill impairment loss of $149.5 million.
* The Company announces a special dividend consisting of 4.1 million AGHL
shares.
* Frontline 2012 received $11.1 million in October 2014 in connection with the
cancellation of a newbuilding contract and recorded a gain of $2.0 million
in the fourth quarter.
* Frontline 2012 took delivery of the first and second LR2 tanker
newbuildings, Front Lion and Front Panther, in late September 2014 and
January 2015, respectively.
* In December 2014, Frontline 2012 cancelled the newbuilding contract at STX
Dalian for Hull D-2174.
* In January 2015, the first two VLGC carriers, Front Mistral and Front
Monsoon, were delivered from the ship yard to Avance Gas.
* In January 2015, Frontline 2012 agreed to acquire the 2009-built and 2011-
built Suezmax tankers, Front Balder (ex Roxen Star) and Front Brage (ex
Chapter Genta), and delivery of these vessels is expected early March.


Fourth Quarter and Full Year 2014 Results

On September 15, 2014, Frontline 2012 Ltd. (the "Company" or Frontline 2012")
closed the first stage of the previously announced transaction with
Knightsbridge Shipping Limited ("Knightsbridge"). The Company received 31.0
million shares in Knightsbridge in exchange for 11 Capesize bulk carrier
newbuildings and two Newcastlemax newbuildings and currently owns approximately
58 percent of the total shares outstanding in Knightsbridge. The Company has

consolidated Knightsbridge as from September 15 as required by U.S. GAAP. The
purchase price allocation, and calculation of goodwill, is preliminary and is
subject to change. The Company has written off the full amount of goodwill
arising on consolidation of $149.5 million following an impairment assessment at
December 31, 2014. References in this press release to the Company refer to
Frontline 2012 on an unconsolidated basis.

Frontline 2012 announces net income attributable to Frontline 2012 of $23.4
million and earnings per share of $0.10 for the fourth quarter of 2014,
excluding a goodwill impairment loss of $149.5 million, compared with net income
attributable to Frontline 2012 of $59.5 million and earnings per share of $0.25
in the preceding quarter. Net income attributable to Frontline 2012 in the
fourth quarter includes a gain of $2.0 million in connection with the
cancellation of the third contract newbuilding contract (D-2173) at Dalian. Net
income attributable to Frontline 2012 in the third quarter includes a gain of
$31.1 million comprising a gain of $28.9 million in connection with the
cancellation of the fourth newbuilding contract (J0028) at Jinhaiwan, a gain of
$2.2 million in connection with the cancellation of the second newbuilding
contract (D-2172) at Dalian. Net income attributable to Frontline 2012 in the
third quarter also includes a gain of $24.4 million, which is included in Share
in results and gain on equity interest from associated companies, on the
revaluation of the Company's equity interest in Knightsbridge.

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 $38,300 and $35,600, respectively, compared with $26,700 and $22,000,
respectively, in the preceding quarter. The spot earnings for the Company's VLCC
and Suezmax tankers were $39,000 and $35,600, respectively, compared with
$24,700 and $22,000, respectively, in the preceding quarter. The daily earnings
for the Company's MR product tankers were $19,900 compared with $13,000 in the
preceding quarter. The daily earnings for the Company's LR2 tanker in the fourth
quarter were $19,200.

Frontline 2012 announces net income attributable to Frontline 2012 of $234.0
million and earnings per share of $0.95 for the year ended December 31, 2014,
excluding a goodwill impairment loss of $149.5 million, compared with net income
attributable to Frontline 2012 of $69.5 million and earnings per share of $0.31
in the year ended December 31, 2013. Net income attributable to Frontline 2012
in the years ended December 31, 2014 and December 31, 2013 includes gains on
newbuilding contracts of $143.8 million and $57.3 million, respectively. Net
income attributable to Frontline 2012 in the year ended December 31, 2014 also
includes a gain on the sale of shares of $16.9 million.

The average daily time charter equivalents ("TCEs") earned in the spot and
period market in the year ended December 31, 2014 by the Company's VLCCs and
Suezmax tankers were $32,500 and $24,500, respectively, compared with $22,300
and $14,200 respectively, in the year ended December 31, 2013. The spot earnings
for the Company's VLCC and Suezmax tankers were $32,100 and $24,500,
respectively, compared with $19,200 and $14,200, respectively, in the year ended
December 31, 2013. The daily earnings for the Company's MR product tankers were
$16,600 in the year ended December 31, 2014.

In February 2015, the Company estimates average cash breakeven TCE rates for the
remainder of 2015 for its VLCCs, Suezmax tankers, MR product tankers and LR2
tankers of approximately $24,400, $27,500, $13,600 and $13,700, respectively.


Fleet Development

The Company took delivery of the first and second LR2 tanker newbuildings, Front
Lion and Front Panther, in late September 2014 and January 2015, respectively,
at which time these vessels commenced trading in the spot market.

In January 2015, Frontline 2012 agreed to acquire the 2009-built and 2011-built
Suezmax tankers, Front Balder (ex Roxen Star) and Front Brage (ex Chapter
Genta), and delivery of these vessels is expected early March.


Newbuilding Program

As of December 31, 2014, the Company's newbuilding program, excluding
newbuildings agreed to be sold and newbuilding contracts with STX Dalian and STX
Korea, comprises 13 LR2 newbuildings and six Suezmax tanker newbuildings. As of
December 31, 2014 total installments of approximately $111.2 million have been
paid and the remaining installments to be paid amounted to approximately $844.7
million.

The 12 remaining Capesize newbuildings, which the Company has agreed to sell to
Knightsbridge with expected closing in March 2015, are recorded as Newbuildings
Held for Sale at December 31, 2014.

In January 2015, the first two VLGC carriers, Front Mistral and Front Monsoon,
were delivered from the ship yard to Avance Gas Holding Ltd. ("AGHL").

Subsequent to December 31, 2014, the Company has concluded two newbuilding
contracts and taken delivery of one newbuilding contract and the Company's
newbuiding program currently comprises 20 newbuildings plus four options.

In 2012 and 2013, the Company cancelled all of its five newbuilding contracts at
Jinhaiwan ship yard and has received a total refund to date of $296.2 million
for four of these contracts, of which $89.8 million has been used to repay debt.
The total unpaid claim for the final contract (hull J0106) is $24.4 million.

The Company cancelled the first four MR tanker newbuildings, hulls D2171, D2172,
D2173 and D2174, at STX Dalian in May, July, September and December 2014,
respectively. We have paid total instalments on these contracts of $34.8 million
and have received payments under the refund guarantees for D2172, D2173 and
D2174 of $29.7 million, including interest of $4.4 million.

Hull D2171 is still in arbitration. The total outstanding including interest is
approximately $11.4 million.


Corporate

On September 15, 2014, Frontline 2012 closed the first stage of the previously
announced transaction with Knightsbridge. The Company received 31.0 million
shares in Knightsbridge in exchange for 11 Capesize bulk carrier newbuildings
and two Newcastlemax newbuildings and currently owns approximately 58 percent of
the total shares outstanding in Knightsbridge. The Company has consolidated
Knightsbridge as from September 15 as required by U.S. GAAP. The second and
final stage of this transaction is expected to close in March 2015 at which time
the Company will receive a further 31.0 million shares in Knightsbridge in
exchange for 12 Capesize bulk carrier newbuildings.

On October 7, 2014, Knightsbridge and Golden Ocean Group Limited ("Golden
Ocean") entered into an agreement and plan of merger (the "Merger Agreement")
pursuant to which the two companies have agreed to merge, with Knightsbridge as
the surviving legal entity (the "Combined Company"). The Combined Company will
be renamed Golden Ocean Group Limited upon completion of the merger. As a result
of the expected merger, the Combined Company will become one of the world's
leading dry bulk companies with a modern fleet of 72 vessels, of which 34 are
newbuildings under construction as of December 31, 2014. The merger is subject
to approval by the shareholders of Golden Ocean and Knightsbridge in separate
special general meetings to be held on March 26, 2015 and other conditions and
the merger is expected to close shortly thereafter. Knightsbridge is expected to
issue approximately 61.5 million new shares to the shareholders of Golden Ocean
upon completion, at which time it is expected that the Company will de-
consolidate Knightsbridge.


242,307,883 ordinary shares were outstanding as of December 31, 2014, and the
weighted average number of shares outstanding for the quarter was 242,307,883.

In December 2014, Frontline 2012 entered into an upsized $466.5 million term
loan facility agreement financing 10 of its 14 LR2 tankers with a competitive
margin and a 20 year repayment profile and in February 2015, Frontline 2012
secured financing for Front Balder and Front Brage with a competitive margin and
a 17.5 year repayment profile. Together with low operating costs and
administrative expenses, the financing should secure attractive cash cost break
even rates for the Company going forward.

The Company announces a distribution of a special dividend consisting of 4.1
million AGHL shares. All shareholders of Frontline 2012, holding 60.74 shares or
more, will receive one share in AGHL for every 60.74 shares they hold in
Frontline 2012, rounded down to the nearest whole share. The remaining
fractional shares will be payable in cash based on the AGHL share price at the
Record date. Shareholders holding less than 60.74 shares will also receive the
dividend as cash.

The record date for this distribution is March 16, 2015, ex dividend date is
March 13, 2015 and the distribution will be made on or about March 25, 2015.


The Market

Crude

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.

Product

The market rate for an MR trading on a standard "TC2" voyage between Rotterdam
and New York in the fourth quarter of 2014 was WS 164, representing a increase
of WS 67 points from the third quarter of 2014 and a increase of WS 72 points
from the fourth quarter of 2013. The flat rate decreased by 5.3 percent from
2013 to 2014.

Bunkers in Rotterdam averaged $417/mt in the fourth quarter of 2014 compared to
$561/mt in the third quarter of 2014. Bunker prices varied between a high of
$549/mt on the 1(st) of October and a low of $299/mt on December the 18(th).

The MR product fleet totalled 1,698 vessels at the end of the fourth quarter of
2014, up from 1,673 vessels at the end of the previous quarter. The order book
counted 355 vessels at the end of the fourth quarter, which represents
approximately 20 percent of the MR fleet.

The LR2 fleet totalled 232 vessels at the end of the fourth quarter of 2014, up
six from the previous quarter. The order book is at 61 vessels at the end of the
fourth quarter, which represents approximately 26 percent of the LR2 fleet.



Strategy and Outlook


In October 2014, Knightsbridge and Golden Ocean entered into a Merger Agreement
pursuant to which the two companies agreed to merge, with Knightsbridge as the
surviving legal entity (the "Combined Company"). The merger is subject to
approval by the shareholders of Golden Ocean and Knightsbridge in separate
special general meetings to be held on March 26, 2015, and other conditions.  If
the shareholders of both companies approve the merger, it is expected to close
shortly thereafter.  Frontline 2012 currently owns 46.5 million shares and will
receive further 31 million shares in Knightsbridge in March 2015 and intends to
distribute all of its 77.5 million shares in the Combined Company to its
shareholders after the merger is closed.  Frontline 2012 currently anticipates
that the distribution will be made during the second quarter of 2015.

Frontline 2012 will become a pure crude and product tanker company during the
second quarter of 2015 following the announced distribution of the special
dividend of the AGHL shares in the first quarter of 2015 and the intended
distribution of the shares in the Combined Company in the second quarter of
2015. The Board has thus currently full focus on developing the Company's crude
and product portfolio, consisting of a sailing fleet of 20 vessels comprising
six VLCCs, six Suezmax tankers, six MR tankers and two LR2 tankers and a
newbuilding program of 24 newbuilding contracts and options.

The continued positive development in the crude and product 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 Ltd's management's examination of historical
operating trends. Although Frontline Ltd 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 2012 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 2012 Ltd.
Hamilton, Bermuda
February 25, 2015

Questions should be directed to:

Robert Hvide Macleod: 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


4th Quarter 2014 Results:
http://hugin.info/150498/R/1897539/673497.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 2012 Ltd. via GlobeNewswire
[HUG#1897539]

Unternehmensinformation / Kurzprofil:
Bereitgestellt von Benutzer: hugin
Datum: 26.02.2015 - 08:45 Uhr
Sprache: Deutsch
News-ID 374428
Anzahl Zeichen: 20713

contact information:

Kategorie:

Business News

Diese Pressemitteilung wurde bisher 133 mal aufgerufen.


Die Pressemitteilung mit dem Titel:
"FRNT - Fourth Quarter and Full Year 2014 Results"
steht unter der journalistisch-redaktionellen Verantwortung von

Frontline 2012 Ltd. (Nachricht senden)

Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).

Alle Meldungen von Frontline 2012 Ltd.