Highlights
Second Quarter and Six Months Results
The Board of Frontline Ltd. (the “Company) announces net income of $127.5 million for the second quarter of 2005, equivalent to earnings per share of $1.70. Operating income for the quarter was $185.1 million compared to $309.3 million in the first quarter. This reflects the continued decrease in the market during the second quarter. The average daily time charter equivalents (“TCEs”) earned in the spot and period market by the Company’s VLCCs, Suezmax tankers and Suezmax OBO carriers were $50,300, $34,100 and $36,400 respectively compared with $77,500, $55,200 and $35,800 respectively in the first quarter of 2005. In the second quarter, a gain of $17.0 million was reported on the sale of three single hull Suezmax tankers.
Interest income was $10.3 million in the quarter, of which, $6.2 million relates to restricted deposits held by subsidiaries reported in Independent Tankers Corporation (“ITC”). The Company recorded interest expense of $50.9 million in the second quarter of which $15.8 million relates to ITC.
The total for other financial items in the second quarter was a gain of $2.7 million compared to a net gain of $20.4 million in the first quarter of 2005. A decrease in interest rates in the quarter has resulted in valuation losses of $8.0 million on interest rate swaps in the second quarter compared to valuation gains of $12.6 million in the first quarter of 2005. As at June 30, 2005, the Company had interest rate swaps with a total notional principal of $628.8 million of which $578.8 million relates to Ship Finance. The valuation of freight future agreements to market value has resulted in a gain of $2.7 million compared to a loss of $5.2 million in the first quarter. Other financial items also include a gain of $3.5 million arising primarily on the sale of shares in General Maritime.
Frontline announces net income of $407.2 million for the six months ended June 30, 2005, equivalent to earnings per share of $5.44. The average daily time charter equivalents (“TCEs”) earned in the spot and period market by the Company’s VLCCs, Suezmax tankers, and Suezmax OBO carriers were $63,500, $44,900 and $36,100, respectively.
As at June 30, 2005, the Company had total cash and cash equivalents of $764.2 million which includes $622.2 million of restricted cash. Restricted cash includes $329.8 million relating to deposits in ITC and $289.8 million in Frontline Shipping Limited and Frontline Shipping II Limited. As of August 2005, the Company has cash breakeven rates on a TCE basis for VLCCs and Suezmaxes of $27,749 and $20,985 respectively.
The results for the quarter and six months ended June 30, 2004 have been restated to reflect discontinued operations related to the dry bulk operations sold during 2004.
The full report is available on the following link: