OSLO, Nov 16 (Reuters) - Oil tanker company Frontline posted a surprise third-quarter profit on Friday, helped by rising rates for its fleet, sendings its shares up almost 5 percent.
The Oslo-listed shipper controlled by billionaire investor John Fredriksen said the sector is finally emerging from its lengthy downturn.
“Tanker markets are beginning to rebalance following 18 months of extremely challenging conditions and we are optimistic that the market has now exited the cycle trough,” Chief Executive Robert Hvide Macleod said in a statement.
“Oil inventory draws, fleet growth and production cuts have been against us, but these important factors are now turning in our favour. The most important factor, oil demand, remains strong.”
Frontline also said it has ordered exhaust gas cleaning systems for a further 12 vessels, which it believes will make its fleet more attractive when tougher international emissions regulations kick in from 2020.
Net earnings for the July-September period swung to a profit of $2.2 million from a loss of $24.1 million in the same period last year. Adjusted for one-off gains, the company lost $8.4 million in the quarter but still beat a forecast loss of $21.9 million in a Reuters poll of analysts.
Frontline shares were up 4.7 percent by 0810 GMT, outperforming a 1.5 percent gain for the Oslo benchmark index. (Reporting by Terje Solsvik Editing by Ole Petter Skonnnord and David Goodman )