FRO - Preliminary Fourth Quarter and Financial Year 2009 Results
Highlights
· Frontline reports net income attributable to the Company of $3.9
million and earnings per share of $0.05 for the fourth quarter of 2009.
· Frontline reports net income attributable to the Company of $102.7
million and earnings per share of $1.32 for the year ended December 31, 2009.
· Frontline announces a cash dividend of $0.25 per share for the fourth
quarter of 2009.
· Frontline has paid cash dividends of $70.1 million or $0.90 per share
in 2009.
· The first Suezmax newbuilding from Rongsheng, Northia, was delivered
on January 5, 2010.
· Four out of the five Suezmax tankers chartered in from Eiger were
redelivered during the fourth quarter. The last vessel will be redelivered end
February 2010.
* Frontline signed a bareboat charter in January 2010 for the VLCC Edinburgh
for a two year period with a two year option period. The vessel will be
operated as a floating storage unit and will cease to trade as a regular
tanker.
· Frontline purchased the VLCC Front Vista in February 2010 and sold it
to a buyer who has secured a 10 year time charter with a state owned oil company
at a gross rate of $43,500 per day during the entire charter period. The
purchase price will be settled through instalments over a 10 year period.
* Frontline agreed with Ship Finance in February 2010 to reduce the restricted
cash supporting the charter obligations to Ship Finance by approximately
$112 million and replace it with a Frontline guarantee for the payment of
charter hire. Further, the parties have agreed a net upfront payment of
charter hire less operating expenses of approximately $74 million, covering
part of the payments due over the next six months. This solution will reduce
Frontline's cash breakeven level for these vessels and improve Frontline's
free cash balance by approximately $112 million during this period and will
thereby substantially strengthen the Company's liquidity situation. The
change of structure is expected to take effect from April 1, 2010.
Preliminary Fourth Quarter and Financial Year 2009 Results
The Board of Frontline Ltd. (the "Company" or "Frontline") announces net income
attributable to the Company of $3.9 million for the fourth quarter of 2009,
equivalent to earnings per share of $0.05 compared with 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. The net loss attributable to the Company in the third
quarter includes a gain of $3.1 million on the termination of the long term
lease for the VLCC Front Duchess.
The reported earnings reflect a stronger spot market compared to the third
quarter of 2009. The average daily time charter equivalents ("TCEs") earned in
the spot and period market in the fourth quarter by the Company's VLCCs, Suezmax
tankers and Suezmax OBO carriers were $33,200, $21,300 and $42,800,
respectively, compared with $32,100, $15,900 and $42,200, respectively, in the
third quarter. The spot earnings for the Company's double hull VLCCs and Suezmax
tankers were $30,400 and $18,300 in the fourth quarter, compared to $26,800 and
$12,800 in the third quarter. The Gemini Suezmax pool had spot earnings of
$20,300 per day in the fourth quarter, compared to $14,866 per day in the third
quarter.
Profit share expense of $5.7 million has been recorded in the fourth quarter as
a result of the profit sharing agreement with Ship Finance International Limited
("Ship Finance") compared to $4.8 million in the third quarter. The total profit
share expense to Ship Finance for 2009, which will be paid in the first quarter
of 2010, was $33.0 million.
Ship operating expenses increased by $1.8 million compared to the third quarter
due to an increase in dry docking costs of $2.9 million, which was partially
offset by a small reduction in running costs.
Charterhire expenses decreased by $3.3 million in the fourth quarter compared
with the third quarter due to the redelivery of four out of the five Suezmax
tankers chartered in from Eiger during the fourth quarter.
Interest income was $5.7 million in the fourth quarter, of which $5.3 million
relates to restricted deposits held by subsidiaries reported in Independent
Tankers Corporation Limited ("ITCL"). Interest expense, net of capitalized
interest, was $40.5 million in the fourth quarter of which $10.5 million relates
to ITCL.
Frontline announces net income attributable to the Company of $102.7 million for
the year ended December 31, 2009, equivalent to earnings per share of $1.32. The
average TCEs earned in the spot and period market by the Company's VLCCs,
Suezmax tankers, and Suezmax OBO carriers for the year ended December 31, 2009
were $38,300, $25,300 and $43,000, respectively, compared with $74,500, $55,200
and $43,500 for the year ended December 31, 2008.
As of December 31, 2009, the Company had total cash and cash equivalents of
$582.6 million, which includes $500.0 million of restricted cash. Restricted
cash includes $314.9 million relating to deposits in ITCL and $184.3 million in
Frontline, which is restricted under the charter agreements with Ship Finance.
As of February 2010, the Company has average total cash cost breakeven rates on
a TCE basis for VLCCs and Suezmax tankers of approximately $30,800 and $25,500,
respectively.
Corporate
On February 25, 2010, the Board declared a dividend of $0.25 per share. The
record date for the dividend is March 9, 2010, ex dividend date is March
5, 2010 and the dividend will be paid on or about March 30, 2010.
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 full report is available for download in the link enclosed.
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
February 25, 2010
Questions should be directed to:
Jens Martin Jensen: 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
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1388900]
4th quarter 2009 results: http://hugin.info/182/R/1388900/347150.pdf
