FRO - First Quarter 2017 Results
Frontline Ltd. (the "Company" or "Frontline"), today reported unaudited results for the three months ended March 31, 2017:
Highlights of the quarter
- Achieved net income attributable to the Company of $27.0 million, or $0.16 per share, for the first quarter of 2017.
- Achieved net income attributable to the Company adjusted for certain non-cash items of $27.9 million, or $0.16 per share, for the first quarter of 2017.
- Announces a cash dividend of $0.15 per share for the first quarter of 2017.
- Acquired two VLCC resales delivering September and October 2017 from DSME, Korea at $77.5 million net per vessel.
- Ordered two VLCC newbuildings scheduled to be delivered during December 2018 and April 2019 and obtained options for two additional sister vessels scheduled to be delivered during August and November 2019 from HHI, Korea at $79.8 million per vessel.
- Signed a senior secured term loan facility in an amount of up to $321.6 million provided by China Exim Bank and insured by China Export and Credit Insurance Corporation to partially finance eight newbuildings.
- Obtained further financing commitment for two senior secured term loan facilities in an aggregate amount of up to $221.0 million from Credit Suisse and ING to partially finance four recent VLCC resales and newbuilding contracts.
Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented:
"Notwithstanding near-term pressure on crude tanker rates, we believe the market will ultimately return to balance as demand for crude oil continues to increase and vessel scrapping will begin to offset the negative effect of newbuilding deliveries. The recent market weakness and other factors have contributed to a historically low asset price environment that has presented us with opportunities to acquire modern tonnage at attractive prices.
We are pleased that we continue to grow our fleet while also divesting of older vessels, as we recently did with the charter termination of four VLCCs and two Suezmax tankers, vessels which have put pressure on our earnings lately and particularly in the first quarter. As we have stated before, older vessels are increasingly difficult to trade, a fact that is amplified in a softer rate environment. In the last 12 months, we have taken steps to both grow and modernize our fleet through six resale purchases and newbuilding contracts. We will continue to strive to create value for our shareholders by expanding our fleet through accretive transactions.
Notwithstanding any potential outcome related to our proposal to effect a business combination with DHT, there are many opportunities to continue our strategy of fleet growth and renewal, and we are confident in our ability to execute on this strategy."
Inger M. Klemp, Chief Financial Officer of Frontline Management AS, added:
"Frontlines continued ability to access attractively priced capital is indicative of the financial strength of our platform as well as our deep relationships within the lending community. We are very pleased to have secured financing for the newly acquired four VLCC resales and newbuilding contracts in an amount of up to $221.0 million. The financing carries an interest rate of LIBOR plus a margin of 190 basis points and has an amortization profile of 18 years, which supports Frontlines low cash break-even levels."
The average daily time charter equivalents ("TCE") earned by Frontline in the quarter ended March 31, 2017 and the prior quarter are shown below, along with the estimated average daily break-even ("BE") rates:
($ per day)
Spot and time charter
Spot Spot Guidance % covered
Estimated average daily BE rates
The full report can be found in the link below.
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
Matters discussed in this press release may constitute forward-looking statements. Forward-looking statements 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. Words, such as, but not limited to "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Frontline believes 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 the control of Frontline, Frontline cannot assure you that they will achieve or accomplish these expectations, beliefs or projections. The information set forth herein speaks only as of the date hereof, and Frontline disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Frontline Ltd. via Globenewswire
1st Quarter 2017 Results - http://hugin.info/182/R/2108327/800782.pdf