Du är här

2015-08-26

Frontline 2012 Ltd.: FRNT - SECOND QUARTER AND SIX MONTHS 2015 RESULTS

Highlights

* Frontline 2012 reports net income from continuing operations of $78.6
million and earnings per share from continuing operations of $0.32 for the
second quarter of 2015.
* Frontline 2012 reports net income from continuing operations of $134.9
million and earnings per share from continuing operations of $0.55 for the
six months ended June 30, 2015.
* In June 2015, the Company paid a special dividend consisting of 75.4
million Golden Ocean shares.
* In August 2015, the Company received $14.6 million from STX Dalian in
respect of two cancelled newbuilding contracts and expects to record a gain
of $3.0 million in the third quarter.
* In July 2015, the Company and Frontline entered into an agreement and plan
of merger.

Second Quarter and Six Months 2015 Results

On June 26, 2015, Frontline 2012 Ltd. ("the Company" or "Frontline 2012") paid
a stock dividend consisting of 75.4 million Golden Ocean Group Ltd. ("Golden
Ocean") shares. The Company held 77.5 million shares prior to this stock
dividend and retained 2.1 million shares. This stock dividend has triggered
discontinued operations presentation of its results of operations from Golden
Ocean. Income statement comparatives are presented on an equivalent basis.

Frontline 2012 announces net income from continuing operations of $78.6
million and earnings per share from continuing operations of $0.32 for the
second quarter compared with net income from continuing operations of $56.3
million and earnings per share from continuing operations of $0.23 in the
preceding quarter. Net income in the second quarter included (i) a gain of
$23.2 million in connection with the cancellation of newbuilding contract
(J0106) at Jinhaiwan, and (ii) a gain of $19.6 million on the delivery of the
Front Breeze and the Front Passat to Avance Gas Holding Ltd. ("AGHL"). Net
income in the first quarter included (i) a gain of $1.8 million in connection
with the cancellation of the fourth newbuilding contract (D-2174) at STX
Dalian and (ii) a gain of $19.1 million on the delivery of the Front Mistral
and the Front Monsoon to AGHL.

The average daily time charter equivalents ("TCEs") earned in the spot and
period market in the second quarter by the Company's VLCCs and Suezmax
tankers were $46,800 and $38,400 compared with $53,800 and $42,600,
respectively, in the preceding quarter. The spot earnings for the Company's
VLCC and Suezmax tankers were $49,300 and $39,200, respectively, compared
with $57,700 and $43,400, respectively, in the preceding quarter. The
earnings on the VLCC and Suezmax tankers for the quarter is somewhat weak,
mainly explained by three VLCC's being positioned west, whilst two of our
Suezmaxes underwent dry-docking in Asia in the same period.

The TCEs earned in the spot market in the second quarter by the Company's MR
product tankers were $24,200 compared with $21,200 in the preceding quarter.
The TCEs earned in the spot and period market in the second quarter by the
LR2 tankers were $27,800 compared with $23,700 in the preceding quarter. The
spot earnings for the Company's LR2 tankers were $32,400 compared with
$23,200 in the preceding quarter.

In August 2015, the Company estimates average cash breakeven TCE rates for the
remainder of 2015 on a TCE basis for its VLCCs, Suezmax tankers, MR product
tankers and LR2 tankers of approximately $24,000, $19,100, $13,400 and
$13,700, respectively.

Frontline 2012 announces net income from continuing operations of $134.9
million and earnings per share from continuing operations of $0.55 for the
six months ended June 30, 2015 compared with net income from continuing
operations of $74.4 million and earnings per share from continuing operations
of $0.30 for the six months ended June 30, 2014. Net income from continuing
operations in six months ended June 30, 2015 included (i) a gain of $23.2
million in connection with the cancellation of newbuilding contract (J0106)
at Jinhaiwan, and (ii) a gain of $19.6 million on the delivery of the Front
Breeze and the Front Passat to AGHL, (iii) a gain of $1.8 million in
connection with the cancellation of the fourth newbuilding contract (D-2174)
at STX Dalian and (iv) a gain of $19.1 million on the delivery of the Front
Mistral and the Front Monsoon to AGHL. Net income from continuing operations
in six months ended June 30, 2014 included (i) a gain on the sale of five
newbuilding contracts of $74.8 million, (ii) a gain of $35.9 million in
connection with the cancellation of newbuilding contract (J0025) at
Jinhaiwan, and (iii) a gain on the sale of shares of $16.9 million

The TCEs earned in the spot and period market in the six months ended June 30,
2015 by the Company's VLCCs and Suezmax tankers were $50,300 and $40,200
compared with $31,700 and $20,400, respectively, in the six months ended June
30, 2014. The spot earnings for the Company's VLCC and Suezmax tankers were
$53,600 and $41,500, respectively, compared with $31,300 and $20,400,
respectively, in the six months ended June 30, 2014.

The TCEs earned in the spot market in the six months ended June 30, 2015 by
the Company's MR product tankers were $22,700 compared with $16,700 in the
six months ended June 30, 2014. The TCEs earned in the spot and period market
in the six months ended June 30, 2015 by the Company's LR2 tankers were
$26,200. The spot earnings for the Company's LR2 tankers were $27,800 in the
six months ended June 30, 2015.

The net result from the chartered-in tonnage was $1.3 million in the second
quarter and $1.8 million in the six months ended June 30, 2015.

The net loss from discontinued operations of $55.4 million and $73.2 million
in the three months and six months ended June 30, 2015, respectively,
includes an impairment loss of $40.6 million relating to the Company's
shareholding in Golden Ocean and is attributable to the fall in Golden
Ocean's share price from March 31, 2015 (being the date from which the
Company de-consolidated Golden Ocean) and June 26, 2015 (being the date of
the stock dividend of the Golden Ocean shares).

Fleet Development

The Company took delivery of its fourth LR2 newbuilding, Front Tiger, in June.

During the second quarter, the Company entered into the following time
charters: The two LR2 vessels, the Front Panther and the Front Puma, which
were chartered out in the first quarter for a period of approximately 12
months from February/March 2015 at a rate of $25,000 per day have been
extended for further 24 months from February/March 2016 at a rate of $28,000
per day. The LR2 vessel Front Lion has been chartered out for a period of
approximately 30-36 months from end July/early August at a rate of $27,600
per day.

Newbuilding Program

As of June 30, 2015, the Company's newbuilding program, excluding newbuildings
agreed to be sold and MR and Capesize newbuildings with STX Dalian and STX
Korea, comprised 12 LR2 newbuildings, four VLCC newbuildings and options for
four further VLCC newbuildings and six Suezmax tanker newbuildings and the
remaining commitments for the Company's 22 newbuilding contracts, amounted to
$1,169.2 million in the period 2015-2017. Subsequent to June 30, 2015, the
Company exercised options for two LR2 newbuilding contracts and its
newbuilding program currently comprises 24 newbuildings.

In 2012 and 2013, the Company cancelled all of its five newbuilding contracts
at Jinhaiwan ship yard, which were acquired from Frontline in December 2011,
and has received an aggregate refund of $321.0 million in respect of
installments paid on these five contracts and accrued interest. The Company
has no outstanding claims from Jinhaiwan.

The Company has cancelled all six of its MR tanker newbuilding contracts at
STX Dalian and has received an aggregate refund of $44.3 million in respect
of installments paid on five of these contracts and accrued interest. The
Company has an outstanding claim of $11.5 million against STX Dalian for the
remaining contract.

Corporate

On June 26, 2015, the Company paid a stock dividend consisting of 75.4 million
Golden Ocean shares. All shareholders holding 3.2142 shares or more, received
one share in Golden Ocean for every 3.2142 shares held, rounded down to the
nearest whole share. The remaining fractional shares were paid in cash. The
Company held 77.5 million Golden Ocean shares prior to this stock dividend
and retained 2.1 million Golden Ocean shares. This stock dividend has
triggered discontinued operations presentation of its results of operations
from Golden Ocean. Income statement comparatives are presented on an
equivalent basis.

Reference is made to the announcement dated July 2, 2015, that Frontline Ltd.
("Frontline") and Frontline 2012 have entered into an agreement and plan of
merger (the "Merger Agreement"), pursuant to which the two companies have
agreed to enter into a merger transaction, with Frontline as the surviving
legal entity (the "Surviving Company") and Frontline 2012 becoming a
wholly-owned subsidiary of Frontline. Frontline has on August 24, 2015, filed
a registration statement with the United States Securities and Exchange
Commission ("SEC") covering the common shares to be issued by Frontline to
Frontline 2012's shareholders in the merger. The shareholders' meetings of
each of Frontline and Frontline 2012 will be held after the registration
statement is declared effective. The effectiveness of the registration
statement is subject, among other things, to SEC review.

242,307,883 ordinary shares were outstanding as of June 30, 2015, and the
weighted average number of shares outstanding for the quarter was
242,307,883.

The Market

The average rate for a VLCC trading on a standard 'TD3' voyage between the
Arabian Gulf and Japan in the second quarter of 2015 was WS 64, representing
an increase of 5 WS points from the first quarter of 2015. The market rate
for a Suezmax trading on a standard 'TD20' voyage between West Africa and
Rotterdam in the second quarter of 2015 was WS 88, representing a decrease of
2 WS points from the first quarter of 2015. The VLCC fleet totalled 639
vessels at the end of the quarter, whilst the Suezmax fleet counted 449
vessels at the end of the quarter.

For MR's trading on a standard 'TC2' voyage between Rotterdam and New York the
market rates for the second quarter of 2015 was WS 155, representing an
increase of 12 points from the first quarter of 2015. Average market rates
for an LR2 trading on a standard "TC1" voyage between Middle East and Japan
in the second quarter of 2015 was WS 110, representing a increase of 11
points from the first quarter of 2015.

The order book for tankers represented about 16 percent of the overall tanker
fleet.

Bunkers in Rotterdam averaged $326/mt in the second quarter of 2015 compared
to $280/mt in the first quarter of 2015.

Strategy
an...

Författare Hugin

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.