Edition:
United States

Frontline Q1 operating profit in line, eyes stronger H2 market


Thursday, 16 May 2019 02:23am EDT 

May 16 (Reuters) - Frontline Ltd ::REG-FRO - FIRST QUARTER 2019 RESULTS.FRONTLINE Q1 OPERATING RESULT $68.9 MILLION (REUTERS POLL $68.9 MILLION).FRONTLINE Q1 NET RESULT $40.0 MILLION (REUTERS POLL $46.8 MILLION).NET INCOME ATTRIBUTABLE TO COMPANY WAS $45.5 MILLION, OR $0.27 PER SHARE ADJUSTED FOR CERTAIN NON-CASH ITEMS FOR Q1.CRUDE OIL TANKER RATES WEAKENED SIGNIFICANTLY IN RECENT MONTHS DUE TO ELEVATED LEVELS OF REFINERY MAINTENANCE, DECREASE IN OIL SUPPLY AND A NUMBER OF NEWBUILDINGS DELIVERING.HOWEVER, A MARKET IMPROVEMENT IS EXPECTED IN SECOND HALF OF YEAR AS REFINERY CAPACITY RETURNS AND OIL VOLUMES RETURN TO MARKETS.IN PARTICULAR, MARKET ANALYSTS EXPECT INCREMENTAL CRUDE DEMAND TO BE GENERATED BY UPCOMING IMO 2020 REGULATIONS AS INCREASED INPUTS WILL BE REQUIRED TO MEET NEW DEMAND FOR LOW SULPHUR FUELS.OUR COMMERCIAL STRATEGY, FLEET RENEWAL OVER RECENT YEARS AND STRONG SUPPORT FROM OUR LARGEST SHAREHOLDER CREATES SIGNIFICANT LEVERAGE AND OPPORTUNITY IN THIS EXCITING MARKET DYNAMIC.HAS REMAINED FOCUSED ON FURTHER STRENGTHENING ITS BALANCE SHEET.BASED ON MARKET EXPECTATIONS AND COMPETITIVE BREAKEVEN LEVELS, COMPANY IS WELL POSITIONED TO GENERATE SIGNIFICANT CASH FLOW AND CREATE VALUE FOR ITS SHAREHOLDERS.FOR Q2 OF 2019, WE ESTIMATE SPOT TCE OF $34,800 CONTRACTED FOR 63% OF VESSEL DAYS FOR VLCCS.ESTIMATED SPOT TCE IS PROVIDED USING LOAD-TO-DISCHARGE METHOD OF ACCOUNTING. WE EXPECT SPOT TCE FOR FULL QUARTER WILL BE LOWER PRIMARILY DUE TO IMPACT OF BALLAST DAYS AT END OF QUARTER.