Frontline Ltd. (the “Company” or “Frontline”), today reported unaudited results for the three months ended March 31, 2016:
Highlights
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Achieved net income attributable to the Company of $78.9 million, or $0.50 per share, for the first quarter of 2016.
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Announces a cash dividend of $0.40 per share for the first quarter of 2016.
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Obtained commitments for up to $603.4 million of new financing in May 2016 comprising of $328.4 million in bank financing for eight newbuilding contracts and a senior unsecured facility of up to 275.0 million from a company affiliated with our largest shareholder, Hemen Holding Ltd.
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Took delivery of four LR2 tanker newbuildings in the first quarter and one LR2 tanker newbuilding in May 2016.
Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented:
“We are very pleased to report yet another strong quarter with net income attributable to the Company of $78.9 million or $0.50 per share. Significantly, this was Frontline’s first full quarter following its merger with Frontline 2012 Ltd. Our performance, particularly in the VLCC segment was strong, despite some market weakness in February and March.
The average daily time charter equivalents (“TCE”) earned by Frontline in the first quarter were strong across all segment classes, as shown below:
| Average daily time charter equivalents (“TCEs”) | ||||||||
| ($ per day) | Spot and time charter | Spot | Spot Guidance | % covered | Estimated average daily BE rates | |||
| Q1 2016 | Q4 2015 | Q1 2016 | Q4 2015 | Q2 2016 | 2016 | |||
| VLCC | 65 400 | 57 700 | 70 200 | 62 700 | 52 000 | 83 % | 22 500 | |
| SMAX | 32 000 | 38 400 | 33 400 | 42 000 | 27 000 | 90 % | 17 900 | |
| LR2 | 24 700 | 25 500 | 24 800 | 37 600 | 24 000 | 77 % | 15 300 | |
| MR | 19 800 | 19 300 | 20 300 | 19 700 | 16 200 | 82 % | 14 000 | |
We are also encouraged that our newbuilding program is proceeding according to schedule. Five LR2 tankers from our newbuilding fleet have been delivered thus far in 2016. An additional six newbuilding deliveries are expected in 2016, and the final 17 newbuilding vessels are expected to be delivered in 2017. Notably, our newbuilding program includes nine LR2 tankers, excluding the five that were already delivered in 2016. These vessels have the capability to transport both crude and refined products, and while our primary focus has always been on the transportation of crude oil, our increasingly diversified fleet also provides us leverage to create value in refined product trades and helps to maximize our chartering strategy.”
Inger M. Klemp, Chief Financial Officer of Frontline Management AS, added:
“We are very pleased to have secured a commitment for up to $275 million in additional debt financing from a company affiliated with Hemen Holding Ltd. The loan will be used to part finance the Company’s current newbuilding program and potential acquisitions. In addition, we have received a commitment for up to $328 million from China Exim Bank to finance eight newbuilding contracts, as well as a term sheet for up to $325 million to finance further eight newbuilding contracts. Based on cash on hand, committed and assumed debt financing we are confident that the current newbuilding program will be fully funded, as well as leaving flexibility for further growth.”
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
Forward-Looking Statements
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.