Frontline 2012 Ltd. (the "Company"
or "Frontline 2012"), today reported unaudited results for the
period ended September 30, 2015.
Highlights
-
Frontline 2012 achieved net income from
continuing operations of $61.9 million, or $0.26 per share, for the
third quarter of 2015 and net income from continuing operations of
$196.8 million, or $0.82 per share, for the nine months ended
September 30, 2015.
-
In August 2015, the Company received $14.6
million from STX Dalian in respect of two cancelled newbuilding
contracts and recorded a gain of $3.0 million in the third
quarter.
-
The Company delivered three VLGC newbuildings to
Avance Gas in the third quarter and recorded a gain of $29.7
million.
-
In October 2015, the Company received $11.9
million from STX Dalian in respect of a cancelled newbuilding
contract and expects to record a gain of $2.9 million in the fourth
quarter.
-
In October 2015, the Company delivered the
eighth, and final, VLGC newbuilding to Avance Gas and expects to
record a gain of approximately $9.2 million in the fourth quarter
resulting from this delivery.
-
In July 2015, the Company and Frontline Ltd.
entered into an agreement and plan of merger. Shareholder
meetings of each of Frontline Ltd. and Frontline 2012 are scheduled
to be held on November 30, 2015 to vote to approve the Merger
Agreement.
Robert Hvide Macleod, Chief
Executive Officer of Frontline Management AS commented:
"We are very pleased to
report our strongest third quarter ever with net
income attributable to the Company of $61.9 million, or
$0.26 per share.
The strength of the tanker market
was driven primarily by high demand for low priced oil, a dynamic
which continued from the second quarter. The high demand for oil
has led to congestion in key ports around the world, which creates
more demand for tanker vessels. Also of note, ballast speeds
increased during the third quarter, returning to normal
levels. We believe that this is a strong sign that capacity
is being absorbed. Indeed, current fleet utilization is at
levels not seen since 2009.
The average daily time charter
equivalents ("TCEs") earned through a combination of spot and time
charters in the third quarter by the Company's VLCCs and Suezmax
tankers were $47,500 and $29,000, respectively. Several of our
tankers were fixed for positioning voyages in the third quarter,
which reduced average TCEs. The positioning voyages were made
to strategically position the vessels ahead of the fourth quarter,
which in the past has yielded seasonally higher rates.
The product tanker market was also
strong throughout the third quarter. TCEs earned through a
combination of spot and time charters in the third quarter by the
Company's LR2 tankers and MR tankers were $27,000 and $25,700,
respectively. Demand for refined petroleum products remains
robust. Africa and Australia imports are helping to
drive the market and trading volumes are high worldwide on the back
of strong refinery margins.
Thus so far in the fourth quarter for our vessels employed in the
spot market we have covered 76% of our VLCC operating days at TCE
rates of approximately $48,400, 84% of our Suezmax operating days
at rates of approximately $41,700, 65% of our LR2 tanker operating
days at rates of approximately $36,900 and 54% of our MR tanker
operating days at rates of approximately $19,000. The VLCC
TCE rates for the third quarter are negatively impacted by
dockings. For the remaining 24% open capacity of the fourth quarter
we expect to achieve higher rates than what we have booked so far
in the quarter. Rates for vessels on time charters are naturally at
lower levels than those that can be achieved on a spot basis in
this strong market."
Fleet
Development
As of September 30, 2015,
Frontline 2012's fleet consisted of six VLCC, six Suezmax crude oil
tankers, six MR tankers and four LR2 vessels with an aggregate
carrying capacity of 3.5 million dwt, as well as the newbuildings
listed below.
During the third quarter, the
Suezmax tanker, the Front Odin, was chartered
out for a period of approximately 24 months from early November
2015 at a rate of $33,900 per day.
Newbuilding
Program
As of September 30, 2015, the
Company's newbuilding program comprised 14 LR2 newbuildings, six
VLCC newbuildings and six Suezmax tanker newbuildings and the
remaining commitments for the Company's 26 newbuilding contracts
amounted to $1,386.5 million in the period 2015-2017.
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 as of September 30,
2015, in respect of instalment payments made on five of the six
contracts plus accrued interest. In October 2015, the Company
received a refund of $11.9 million from STX Dalian for the sixth
and final newbuilding contract and expects to record a gain of $2.9
million in the fourth quarter. The Company has no outstanding
claims in respect of cancelled newbuilding contracts.
The Company delivered three VLGC
newbuildings to Avance Gas Holding Ltd ("AGHL") in the third
quarter and recorded a gain of $29.7 million. In October 2015, the
Company delivered the eighth, and final, VLGC newbuilding to AGHL
and expects to record a gain of approximately $9.2 million in the
fourth quarter resulting from this delivery.
Market update
World oil supply currently is at
its highest level ever at nearly 97 million barrels per day.
This, along with a strong demand for inexpensive crude oil, has led
to the tanker fleet surpassing 85% utilization, the highest level
seen in many years and a sign of a healthy market, assuming
continuation of these levels of demand. Increasing eastbound
cargoes and new refinery projects in Asia are keeping tonne miles
high, a trend the Company believes will continue.
Additionally, forced storage of oil on tankers due to a high supply
of cargoes is contributing to a strong market.
The average rate for VLCCs trading
on a standard 'TD3' voyage between the Arabian Gulf and Japan in
the third quarter of 2015 was WS 55, or a daily time charter
equivalents ("TCEs") of $58,002, and the average rate for a Suezmax
trading on a standard 'TD20' voyage between West Africa and
Rotterdam in the third quarter of 2015 was WS 73, or a TCE of
$35,274. These average rates were slightly lower than the rates in
the previous quarter.
The VLCC fleet totalled 645
vessels at the end of the quarter, and the Suezmax fleet totalled
450 vessels. The order book for tankers represents
approximately 17 % of the tanker fleet although a relatively small
portion of the order book is expected to be delivered within the
next six to 12 months. Given the strength of the market, only
a limited amount of scrapping activity has occurred.
For MR product tankers trading on
a standard 'TC2' voyage between Rotterdam and New York the market
rates for the third quarter of 2015 were WS 135, or a TCE of
$18,532, and market rates for a LR2 product tanker trading on a
standard "TC1" voyage between Middle East and Japan in the third
quarter of 2015 were WS 133, or a TCE of $39,933.
Corporate
update
On July 2, 2015, Frontline Ltd.
("Frontline") and Frontline 2012 announced that they 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 2012 becoming a wholly-owned
subsidiary of Frontline. Frontline filed a registration statement
with the United States Securities and Exchange Commission ("SEC")
on August 24, 2015 covering the common shares to be issued by
Frontline to Frontline 2012's shareholders in the merger. The
registration statement was declared effective by the SEC on
November 9, 2015. The shareholders' meetings of each of Frontline
and Frontline 2012 are scheduled to be held on November 30,
2015.
Third Quarter and
Nine Months 2015 Results
Frontline 2012 generated net
income from continuing operations of $61.9 million, or $0.26 per
share in the third quarter, compared with net income from
continuing operations of $78.6 million, or $0.32 per share in the
preceding quarter. Net income from continuing operations in the
third quarter included a gain of $3.0 million in connection with
the cancellation of newbuilding contracts D-2175 and D-2176 at STX
Dalian and a gain of $29.7 million on the delivery of the Front
Sirocco, Front Levant and Front Chinook to AGHL. Net income from
continuing operations in the second quarter included a gain of
$23.2 million in connection with the cancellation of newbuilding
contract (J0106) at Jinhaiwan and a gain of $19.6 million on the
delivery of the Front Breeze and the Front Passat to AGHL.
The TCEs earned in the spot and
period market in the third quarter by the Company's VLCCs and
Suezmax tankers were $47,500 and $29,000, respectively compared
with $46,800 and $38,400, respectively, in the preceding quarter.
The spot earnings for the Company's VLCCs and Suezmax tankers were
$50,800 and $34,400, respectively, compared with $49,300 and
$39,200, respectively, in the preceding quarter.
The TCEs earned in the spot market
in the third quarter by the Company's MR product tankers were
$25,700 compared with $22,400 in the preceding quarter. The TCEs
earned in the spot and period market in the third quarter by the
LR2 product tankers were $27,000 compared with $27,800 in the
preceding quarter. The spot earnings for the Company's LR2 tankers
were $42,700 compared with $32,400 in the preceding quarter.
The Company estimates that average
daily cash breakeven TCE rates for the remainder of 2015 will be
$23,300, $17,900, $14,900 and $13,800 for the Company's VLCCs,
Suezmax tankers, LR2 tankers and MR product tankers,
respectively.
On June 26, 2015, 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 generated net
income from continuing operations of $196.8 million, or $0.82 per
share, for the nine months ended September 30, 2015, compared with
net income from continuing operations of $111.6 million, or $0.46
per share, for the nine months ended September 30, 2014. Net income
from continuing operations in the nine months ended September 30,
2015 included a gain of $28.0 million in connection with the
cancellation of four newbuilding contracts and a gain of $68.4
million on the delivery of seven VLGCs to AGHL. Net income from
continuing operations in the nine months ended September 30, 2014
included a gain of $67.0 million on the cancellation of three
newbuilding contracts and a gain of $16.9 million on the sale of
shares in AGHL.
The TCEs earned in the spot and
period market in the nine months ended September 30, 2015 by the
Company's VLCCs and Suezmax tankers were $49,500 and $36,000,
respectively, compared with $30,300 and $20,900, respectively, in
the nine months ended September 30, 2014. The spot earnings for the
Company's VLCC and Suezmax tankers were $52,800 and $39,100,
respectively, compared with $29,500 and $20,900, respectively, in
the nine months ended September 30, 2014.
The TCEs earned in the spot market
in the nine months ended September 30, 2015 by the Company's MR
product tankers were $23,700, compared with $15,300 in the nine
months ended September 30, 2014. The TCEs earned in the spot and
period market in the nine months ended September 30, 2015 by the
Company's LR2 product tankers were $25,000. The spot earnings for
the Company's LR2 product tankers were $32,900 in the nine months
ended September 30, 2015.
The net loss from discontinued
operations of $131.0 million in the nine months ended September 30,
2015 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 (the date
from which the Company de-consolidated Golden Ocean) to June 26,
2015 (the date of the stock dividend of the Golden Ocean
shares).
Strategy
and Outlook
The shareholders' meetings of each
of Frontline 2012 and Frontline to vote on the announced Merger
Agreement are scheduled to be held on November 30, 2015.
Assuming shareholder approval and
completion of the merger, Frontline together with its subsidiary
Frontline 2012 (together, "the Surviving Company") will have
a fleet of approximately 90 vessels, including vessels on
commercial management, vessels on time charter in and newbuildings
due for delivery in the next 24 months. With a large modern
fleet, a strong balance sheet and attractive cash break even rates,
the Company believes that the Surviving Company should be equally
well positioned to generate significant free cash in a strong
market and to sustain a weak market. The Company believes the
Surviving Company will be well positioned to grow through
acquisition and consolidation opportunities.
Important
Information For Investors And Shareholders
This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. In
connection with the proposed transaction between Frontline and
Frontline 2012, Frontline has filed relevant materials with the
Securities and Exchange Commission (the "SEC"), including a
registration statement of Frontline on Form F-4 (File No.
333-206542), initially filed on August 24, 2015 and subsequently
amended, that includes a joint proxy statement of Frontline 2012
and Frontline that also constitutes a prospectus of Frontline. The
registration statement was declared effective by the SEC on
November 9, 2015. A definitive joint proxy statement/prospectus has
been mailed to shareholders of Frontline 2012 and Frontline.
INVESTORS AND SECURITY HOLDERS OF FRONTLINE 2012 AND FRONTLINE ARE
URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER
DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders will be
able to obtain free copies of the registration statement and the
joint proxy statement/prospectus (when available) and other
documents filed with or furnished to the SEC by Frontline through
the website maintained by the SEC at http://www.sec.gov. Copies of
the documents filed with or furnished to the SEC by Frontline will
be available free of charge on Frontline's website at
http://www.frontline.bm. Additional information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with or furnished to the SEC when
they become available.
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.
Forward-looking statements
include, without limitation, statements regarding:
-
The effectuation of the transaction between
Frontline and Frontline 2012 described above;
-
The delivery to and operation of assets by
Frontline;
-
Frontline's and Frontline 2012's future
operating or financial results;
-
Future, pending or recent acquisitions, business
strategy, areas of possible expansion, and expected capital
spending or operating expenses; and
-
Tanker market trends, including charter rates
and factors affecting vessel supply and demand.
The forward-looking statements in
this press release are based upon various assumptions, many of
which are based, in turn, upon further assumptions, including
without limitation, examination of historical operating trends,
data contained in records and other data available from third
parties. 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, or the combined
company, will achieve or accomplish these expectations, beliefs or
projections. In addition to these important factors, other
important factors that could cause actual results to differ
materially from those discussed in the forward-looking statements,
including the strength of world economies and currencies, general
market conditions, including fluctuations in charter rates and
vessel values, changes in demand for tanker shipping capacity,
changes in the combined company's operating expenses, including
bunker prices, drydocking and insurance costs, the market for the
combined company's vessels, availability of financing and
refinancing, 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, vessels breakdowns and instances
of off-hires and other factors. Please see Frontline's filings with
the SEC and the Prospectus for a more complete discussion of these
and other risks and uncertainties. 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.
The Board of Directors
Frontline 2012 Ltd.
Hamilton, Bermuda
November 23, 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
3rd Quarter and Nine Months 2015
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 2012 Ltd. via Globenewswire
HUG#1968928
Frontier Airlines Hldgs (MM) (NASDAQ:FRNT)
Historical Stock Chart
From Feb 2025 to Mar 2025
Frontier Airlines Hldgs (MM) (NASDAQ:FRNT)
Historical Stock Chart
From Mar 2024 to Mar 2025