FRO - Third Quarter and Nine Months 2009 Results
27.11.2009
Highlights
• Frontline reports a net loss attributable to the Company of $5.6 million and a loss per share of $0.07 for the third quarter of 2009.
• Frontline reports net income attributable to the Company of $98.8 million and earnings per share of $1.27 for the nine months ended September 30, 2009.
• Frontline announces a cash dividend of $0.15 per share for the third quarter of 2009.
• Frontline continue to outperform the market and the Company's peers in the third quarter of 2009 with spot earnings for the double hull VLCCs and Suezmax tankers in the Gemini Suezmax pool of $26,800 per day and $14,866 per day,
respectively.
• Losses related to the five Suezmax tankers chartered in from Eiger were $14.6 million in the third quarter and $29 million year to date. Early November 2009, Frontline redelivered two of the vessels and expects to redeliver two vessels in December 2009 and the remaining vessel in the first quarter of 2010.
• The Board has progressed with a plan to strengthen Frontline's resistance in the case the current weak oil demand will continue to negatively influence tanker earnings.
The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss attributable to the Company of $5.6 million for the third quarter of 2009, equivalent to loss per share of $0.07, compared with net income attributable to the Company of $27.8 million and earnings per share of $0.36 for the preceding quarter. Net operating income in the third quarter was $28.2 million, compared with $62.1 million in the preceding quarter.
The reported loss reflects a weaker spot market. The average daily time charter equivalents ("TCEs") earned in the spot and period market in the third quarter by the Company's VLCCs, Suezmax tankers and Suezmax OBO carriers were $32,100, $15,900 and $42,200, respectively, compared with $38,400, $26,800, and $42,700, respectively, in the preceding quarter. The spot earnings for the Company's double hull VLCCs and Suezmax tankers were $26,800 and $12,800, respectively, in the third quarter of 2009, compared with $38,700 and $24,400, respectively, in the preceding quarter. The Gemini Suezmax pool had spot earnings of $14,866 per day in the third quarter.
Profit share expense of $4.8 million has been recorded in the third quarter as a result of the profit sharing agreement with Ship Finance International Limited ("Ship Finance") compared to $8.0 million in the preceding quarter. Ship operating expenses increased by $1.8 million compared with the preceding quarter, primarily as a result of increased dry docking costs as one additional vessel dry docked in the third quarter compared to the second quarter.
Charterhire expenses decreased by $7.4 million in the third quarter compared with the preceding quarter due to the weaker spot market, which has resulted in reduced expenses on floating rate charters and profit share payments on two vessels.
Interest income was $5.6 million in the third quarter, of which $5.2 million relates to restricted deposits held by subsidiaries reported in Independent Tankers Corporation Limited ("ITCL"). Interest expense, net of capitalized interest, was $39.8 million in the third quarter of which $10.6 million relates to ITCL.
Frontline announces net income attributable to the Company of $98.8 million for the nine months ended September 30, 2009, equivalent to earnings per share of $1.27. The average daily TCEs earned in the spot and period market in the nine months ended September 30, 2009 by the Company's VLCCs, Suezmax tankers and Suezmax OBO carriers were $40,200, $26,600 and $43,000, respectively, compared with $81,100, $61,800 and $43,800, respectively, in the nine months ended September 30, 2008. The spot earnings for the Company's double hull VLCCs and Suezmax tankers were $40,700 and $24,900, respectively, in the nine months ended September 30, 2009.
As of September 30, 2009, the Company had total cash and cash equivalents of $584.7 million, which includes $478.9 million of restricted cash. Restricted cash includes $293.8 million relating to deposits in ITCL and $184.3 million in Frontline, which is restricted under the charter agreements with Ship Finance.
In November 2009, the Company has average total cash cost breakeven rates on a TCE basis for VLCCs and Suezmaxes of approximately $32,900 and $27,100, respectively.
On November 26, 2009, the Board declared a dividend of $0.15 per share. The record date for the dividend is December 8, 2009, ex dividend date is December 4, 2009 and the dividend will be paid on or about December 22, 2009.
The full report is available for download in the link www.frontline.bm.
Frontline Ltd.