Frontline Ltd. (the âCompanyâ or âFrontlineâ), today reported unaudited results
for the three and nine months ended September 30, 2019:
Vis bĂžrsmeldingen
Highlights
- Reports a net loss of $10.0 million, or $0.06 per share, for the third
quarter of 2019.
- Reported spot average daily time charter equivalent (âTCEâ) for VLCCs,
Suezmax tankers and LR2 tankers in the third quarter were $22,900, $16,200
and $15,900, respectively.
- For the fourth quarter of 2019, we estimate spot TCE of $64,800 contracted
for 78% of vessel days for VLCCs, $49,400 contracted for 71% of vessel days
for Suezmax tankers and $29,900 contracted for 74% of vessel days for LR2s.
The estimated spot TCEs are provided on a load-to-discharge basis. In line
with previous quarters, we expect the spot TCEs for the full quarter to be
lower than the TCEs currently contracted, primarily due to the impact of
ballast days at the end of the quarter.
- In October 2019, the Company announced that it had extended its senior
unsecured revolving credit facility of up to $275.0 million with an
affiliate of the Companyâs shareholder, Hemen Holding Ltd. to May 2021.
- In November 2019, the Company secured a commitment from ICBC Financial
Leasing Co., Ltd (âICBCLâ) for a sale-and-leaseback agreement in an amount
of up to $544.0 million, which is subject to final documentation.
- Declared a cash dividend of $0.10 per share for the third quarter of 2019.
Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS
commented:
âWe believe that tanker market fundamentals look encouraging and we have entered
a period of substantially stronger vessel earnings. Our strategy has focused on
increasing our spot exposure throughout the year and we believe this will be
reflected in our results for the fourth quarter. While the brief spike in tanker
rates made news headlines, it would not have been possible without a
fundamentally tighter tanker market. We expect to see a dynamic and volatile
market environment in the coming quarters and we will seek to opportunistically
secure charter coverage if market strength persists.â ?
Inger M. Klemp, Chief Financial Officer of Frontline Management AS added:
âWe are very pleased to have secured the financing commitment from ICBCL on
highly attractive terms, which marks an important transaction between ICBCL and
Frontline. Through this transaction we extend our capital sources at a very
attractive capital cost, maintain our industry leading cash break-even rates and
maximise potential cash flow per share after debt service.â
The average daily time charter equivalents (âTCEâ) earned by Frontline in the
quarter ended September 30, 2019, the prior quarters and in the year ended
December 31, 2018 are shown below, along with spot estimates for the fourth
quarter of 2019 and the estimated average daily cash break-even (âBEâ) rates for
the remainder of 2019:
Average daily time charter equivalents ("TCEs")
Estimated
($ per Spot average daily
day) ? Spot estimates % covered cash BE rates
±---------------------------------------------------------------±------------+
| Q3 2019 Q2 2019 Q1 2019 2018 Q4 2019 | 2019 |
±---------------------------------------------------------------±------------+
|VLCC 22,900 25,600 35,700 18,300 64,800 78% | 23,400 |
| | |
|SMAX 16,200 16,200 28,200 17,300 49,400 71% | 21,100 |
| | |
|LR2 15,900 18,100 24,000 14,900 29,900 74% | 16,100 |
±---------------------------------------------------------------±------------+
The estimated average daily cash break-even rates are the daily TCE rates the
vessels must earn in order to cover operating expenses including dry docks,
repayments of loans, interest on loans, bareboat hire, time charter hire and net
general and administrative expenses.
Spot estimates are provided on a load-to-discharge basis. The rates quoted are
for days currently contracted. The actual rates to be earned in the fourth
quarter of 2019 will therefore depend on the number of additional days that we
can contract, and more importantly the number of additional days that each
vessel is laden. Therefore, a high number of ballast days at the end of the
quarter will limit the amount of additional revenues to be booked on a load to
discharge basis. Furthermore, when a vessel remains uncontracted at the end of
the quarter, the Company will recognize any costs during the uncontracted days
up until the period end, whereas if a vessel is contracted, then certain costs
can be deferred and recognized over the load-to-discharge period.
For example, on August 27, 2019 the Company disclosed that spot TCE of $28,000
per day had been contracted for 83% of vessel days for our VLCCs. The number of
ballast days at the end of the third quarter was higher than the uncontracted
days on August 27, 2019 and no additional revenues were booked. Furthermore, due
to the number of uncontracted days at the end of the period, costs have been
recognized for those days. This resulted in a lower TCE per day by the end of
the third quarter.
The load-to-discharge basis of accounting results in revenues being recognized
over fewer days, but at a higher rate for those days. Over the life of a voyage
there is no difference in the total revenues and costs to be recognized.
When expressing TCE per day for the third quarter of 2019, the Company uses the
total available days for the quarter and not just the number of days the vessel
is laden.
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
November 26, 2019
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 report may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements, which 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.
Frontline Ltd. and its subsidiaries, or the Company, desires to take advantage
of the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and is including this cautionary statement in connection with this safe
harbor legislation. This report and any other written or oral statements made by
us or on our behalf may include forward-looking statements, which reflect our
current views with respect to future events and financial performance, and are
not intended to give any assurance as to future results. When used in this
document, the words âbelieve,â âanticipate,â âintend,â âestimate,â âforecast,â
âproject,â âplan,â âpotential,â âwill,â âmay,â âshould,â âexpectâ and similar
expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this report are based upon various
assumptions, including without limitation, managementâs examination of
historical operating trends, data contained in our records and data available
from third parties. Although we believe 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 our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections. We undertake no obligation to update
any forward-looking statements, whether as a result of new information, future
events or otherwise.
In addition to these important factors and matters discussed elsewhere herein,
important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies, fluctuations in currencies and interest rates,
general market conditions, including fluctuations in charter hire rates and
vessel values, changes in the supply and demand for vessels comparable to ours,
changes in world wide oil production and consumption and storage, changes in the
Companyâs operating expenses, including bunker prices, dry docking and insurance
costs, the market for the Companyâs vessels, availability of financing and
refinancing, our ability to obtain financing and comply with the restrictions
and other covenants in our financing arrangements, availability of skilled
workers and the related labor costs, compliance with governmental, tax,
environmental and safety regulation, any non-compliance with the U.S. Foreign
Corrupt Practices Act of 1977 (FCPA) or other applicable regulations relating to
bribery, general economic conditions and conditions in the oil industry, effects
of new products and new technology in our industry, the failure of counter
parties to fully perform their contracts with us, our dependence on key
personnel, adequacy of insurance coverage, our ability to obtain indemnities
from customers, changes in laws, treaties or regulations, the volatility of the
price of our ordinary shares; our incorporation under the laws of Bermuda and
the different rights to relief that may be available compared to other
countries, including the United States, 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, political
events or acts by terrorists, and other important factors described from time to
time in the reports filed by the Company with the Securities and Exchange
Commission or Commission.
We caution readers of this report not to place undue reliance on these forward-
looking statements, which speak only as of their dates. These forward-looking
statements are no guarantee of our future performance, and actual results and
future developments may vary materially from those projected in the forward-
looking statements.
This information is subject to the disclosure requirements pursuant to section
5 -12 of the Norwegian Securities Trading Act.
Kilde
Tipper de finner en lÞsning for Ä fÄ landet avtaler som er sÊrdeles lukrative sammenlignet med forventningene. Men bare for Ä ha sagt det; jeg ville nok ogsÄ gjort som du 
