Highlights
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Frontline reports a net loss
attributable to the Company of $13.0 million for the fourth quarter
of 2014, equivalent to a loss per share of $0.12.
-
Frontline reports a net loss
attributable to the Company of $13.7 million for the fourth quarter
of 2014, when excluding a non-cash gain of $40.3 million arising on
the termination of the charter parties for Front Opalia, Front
Comanche and Front Commerce, a non-cash gain of $1.5 million
arising on the convertible bond buy back in October and a non-cash
loss of $41.1 million arising on the convertible bond swaps in
October and December, equivalent to a loss per share of
$0.13.
-
Frontline reports a net loss
attributable to the Company of $162.9 million for the year ended
December 31, 2014, equivalent to a loss per share of
$1.63.
-
Frontline reports a net loss attributable to the
Company of $37.9 million for the year ended December 31, 2014, when
excluding 'one time' gains and losses equivalent to a loss per
share of $0.38.
-
Frontline agreed with Ship Finance in July 2014
to terminate the long term charter parties for the 1999 built VLCCs
Front Opalia, Front Comanche and Front Commerce and Ship Finance
simultaneously sold the vessels to unrelated third parties. The
charter parties for the Front Commerce, Front Comanche and Front
Opalia terminated on November 4, November 12 and November 19,
respectively.
-
In October 2014, the Company bought $17.8
million notional principal of its 4.50% Convertible Bond Issue
2010/2015 at a purchase price of 91.654%.
-
In October and December 2014, the Company
entered into private agreements to exchange $45.5 million of the
Company's 4.50% Convertible Bond for an aggregate of 12,996,476
shares and an aggregate cash payment of $19.6 million plus accrued
interest.
-
In January 2015, Frontline took delivery of its
second and final Suezmax newbuilding, Front Idun.
-
Frontline issued 10,009,703 and 902,744 new
shares under its ATM program during January 2015 and February 2015,
respectively.
-
In January 2015, the Company's ATM program was
increased to having aggregate sales proceeds of up to $150.0
million, from up to $100.0 million.
-
In February 2015, the Company bought
$33.3 million notional principal of its 4.50% Convertible Bond
Issue 2010/2015 at a purchase price of 99%.
Fourth Quarter
and Full Year 2014 Results
The Board of Frontline Ltd. (the
"Company" or "Frontline") announces a net loss attributable to the
Company of $13.0 million in the fourth quarter, equivalent to a net
loss per share of $0.12, compared with a net loss of $59.6 million
for the third quarter, equivalent to a loss per share of $0.60. Net
income attributable to the Company in the fourth quarter includes a
non-cash gain of $40.3 million arising on the termination of the
charter parties for Front Opalia, Front Comanche and Front
Commerce, a non-cash gain of $1.5 million arising on the
convertible bond buy back in October and a non-cash loss of $41.1
million arising on the convertible bond swaps in October and
December. The net loss attributable to the Company in the third
quarter includes a vessel impairment loss of $41.5 million and a
loss arising on the de-consolidation of the Windsor group of $12.4
million.
The average daily time charter
equivalents ("TCEs") earned in the spot and period market in the
fourth quarter by the Company's VLCCs and Suezmax tankers were
$27,900 and $26,000 compared with $24,600 and $18,600 in the
preceding quarter. The spot earnings for the Company's VLCCs and
Suezmax vessels were $27,400 and $27,200 compared with $23,900 and
$19,500 in the preceding quarter.
Contingent rental expense
represents amounts accrued following changes to certain charter
parties in December 2011 and increased in the fourth quarter as
compared to the third quarter primarily due to an increase in
actual spot market rates.
Interest expense, net of
capitalized interest, was $15.4 million in the fourth quarter of
which $0.8 million relates to the Company's subsidiary Independent
Tankers Corporation Limited ("ITCL").
Frontline announces a net loss
attributable to the Company of $162.9 million for the year ended
December 31, 2014, equivalent to a loss per share of $1.63 compared
with a net loss attributable to the Company of $188.5 million for
the year ended December 31, 2013, equivalent to a loss per share of
$2.36. Frontline reports a net loss of $37.9 million for the year
ended December 31, 2014, equivalent to a loss per share of $0.38
when the following 'one time' gains and losses are excluded -
impairment losses and loss on de-consolidation of the Windsor group
of $110.1 million, a non-cash gain of $40.3 million arising on the
termination of the charter parties for Front Opalia, Front Comanche
and Front Commerce, a non-cash gain of $1.5 million arising on the
convertible bond buy back in October, a non-cash loss of $41.1
million arising on the convertible bond swaps in October and
December and a loss of $15.7 million incurred in the first quarter
on the sale of Ulysses. The average daily TCEs earned in the spot
and period market in the year ended December 31, 2014 by the
Company's VLCCs and Suezmax tankers were $24,800 and $21,100
compared with $17,400 and $13,400 in the year ended December 31,
2013. The spot earnings for the Company's VLCCs and Suezmax vessels
were $24,100 and $21,500 in the year ended December 31, 2014
compared with $15,400 and $13,400, respectively, in the year ended
December 31, 2013.
As of December 31, 2014, the
Company had total cash and cash equivalents of $64.1 million and
restricted cash of $42.1 million. Restricted cash includes $41.1
million relating to deposits in ITCL.
In February 2015, the Company
estimates average total cash cost breakeven rates for the remainder
of 2015 on a TCE basis for VLCCs and Suezmax tankers of
approximately $26,400 and $19,400, respectively.
Fleet
Development
In September 2014, the Company
agreed to sell the VLCC Ulriken (ex Antares Voyager) to an
unrelated third party and recorded an impairment loss of $12.4
million in the third quarter. The vessel was delivered to the new
owners in October 2014.
Pursuant to an early termination
agreement between three of the Company's subsidiaries, which were
accounted for under the equity method, and Chevron; (1) the
bareboat charters for the Altair Voyager, Cygnus Voyager and Sirius
Voyager were terminated as of October 1, 2014; (2) the charter hire
payments paid in connection with the early termination agreement
were used to redeem the remaining outstanding debt related to these
vessels; and (3) the three vessels were sold. This transaction was
cash neutral to the Company, except for an amount of $0.6 million
which became available to the Company.
The charter parties for the Front
Commerce, Front Comanche and Front Opalia terminated on November 4,
November 12 and November 19, respectively. These terminations
resulted in a non-cash gain of $40.3 million in the fourth
quarter.
Newbuilding
Program
At December 31, 2014, the Company
had one Suezmax newbuilding contract and was committed to make
newbuilding installments of $40.9 million. The Company took
delivery of this newbuilding, Front Idun, in January 2015 and drew
down the remaining $30.0 million balance on its $60.0 million term
loan facility in order to part finance this vessel.
Corporate
In October 2014, the Company
bought $17.8 million notional principal of its 4.50% Convertible
Bond Issue 2010/2015 at a purchase price of 91.654%. This
transaction resulted in a non-cash gain of $1.5 million in the
fourth quarter.
In October 2014 and December 2014,
the Company entered into private agreements to exchange $45.5
million of the outstanding principal amount of the Company's 4.50%
Convertible Bond Issue 2010/2015 for an aggregate of 12,996,476
shares and a cash payment of $19.6 million plus accrued interest.
These bond exchanges resulted in a non-cash loss of $41.1 million
in the fourth quarter.
The Company had an issued share
capital at December 31, 2014 of $112,342,989 divided into
112,342,989 ordinary shares (December 31, 2013: $86,511,713 divided
into 86,511,713 ordinary shares). The weighted average number of
shares outstanding for the quarter was 105,667,604.
In January 2015, the Company filed
with the United States Securities and Exchange Commission a
prospectus supplement covering the second amendment and restatement
of its previously announced equity distribution agreement with
Morgan Stanley & Co. LLC, ("Morgan Stanley"), under which the
amount of new ordinary shares the Company may offer and sell, at
any time and from time to time through Morgan Stanley in an
at-the-market offering, was increased to having aggregate sales
proceeds of up to $150.0 million, from up to $100.0 million.
Frontline issued 10,009,703 and
902,744 new shares under the ATM during January 2015 and February
2015, respectively. Following such issuance, Frontline has an
issued share capital of $123,255,436 divided into 123,255,436
ordinary shares.
In February 2015, the Company bought $33.3 million
notional principal of its 4.50% Convertible Bond Issue 2010/2015 at
a purchase price of 99%.
The Market
The market rate for a VLCC trading
on a standard 'TD3' voyage between the Arabian Gulf and Japan in
the fourth quarter of 2014 was WS 52, representing an increase of
WS 7 points from the third quarter of 2014 and WS 1 point lower
than the fourth quarter of 2013. The flat rate decreased by 6.7
percent from 2013 to 2014.
The market rate for a Suezmax
trading on a standard 'TD5' voyage between West Africa and
Philadelphia in the fourth quarter of 2014 was WS 87, representing
an increase of WS 16 points from the third quarter of 2014 and an
increase of WS 21 points from the fourth quarter of 2013. The flat
rate decreased by 6 percent from 2013 to 2014.
Bunkers at Fujairah averaged
$447/mt in the fourth quarter of 2014 compared to $598/mt in the
third quarter of 2014. Bunker prices varied between a high of
$568/mt on the 1st of October
and a low of $320/mt on December 19th.
The International Energy Agency's
("IEA") February 2015 report stated an OPEC crude production of
30.5 million barrels per day (mb/d) in the fourth quarter of 2014.
This was unchanged from third quarter of 2014.
The IEA estimates that world oil
demand averaged 93.5 mb/d in the fourth quarter of 2014, which is
an increase of 0.4 mb/d compared to the previous quarter. IEA
estimates that world oil demand in 2015 will be 93.4 mb/d,
representing an increase of 1.1 percent or 1 mb/d from 2014.
The VLCC fleet totalled 638
vessels at the end of the fourth quarter of 2014, four vessels up
from the previous quarter. Five VLCCs were delivered during the
quarter, one was removed. The order book counted 82 vessels at the
end of the fourth quarter, which represents approximately 13
percent of the VLCC fleet.
The Suezmax fleet totalled 450
vessels at the end of the fourth quarter, same as at the end of the
previous quarter. Two vessels were delivered during the quarter
whilst two were removed. The order book counted 63 vessels at the
end of the fourth quarter, which represents approximately 14
percent of the Suezmax fleet.
Strategy
and Outlook
In the fourth quarter of 2014 and
in the first quarter of 2015, the Company reduced the outstanding
balance on its convertible bond loan, which matures in April 2015,
from $190.0 million at September 30, 2014 to $93.4 million through
bond buy backs and debt/equity swaps. Based on existing cash
resources, cash expected to be generated from operations and
monetizing or borrowing against shares in Frontline 2012 Ltd., the
Board is confident that Frontline will be able to repay all of its
convertible bond loan in April 2015.
The target is to rebuild Frontline
into a leading tanker company.
The continued positive development
in the crude tanker market into the first quarter is likely to give
an improved operating result (excluding one time gains and losses)
in the first quarter.
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 Board of Directors
Frontline Ltd.
Hamilton, Bermuda
February 25, 2015
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
This information is subject
to the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.
4th Quarter 2014 Results
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX 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
HUG#1897541
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