United States

BRIEF-Frontline Q2 results and dividend weaker than expected, sees weaker second half

Wednesday, 31 Aug 2016 02:32am EDT 

Tanker firm Frontline Ltd : Frontline q2 net result $14.3 million (Reuters poll $44.4 million) vs $23.2 mln in Q2 2015 . Frontline q2 operating profit $37.0 million (Reuters poll $58.3 million) vs $82.2 mln in Q2 2015 . Frontline takes q2 impairments of vessels at $25.5 million . Frontline announces a cash dividend of $0.20 per share for the second quarter (Reuters poll $0.25) . In q2 tanker market experienced a downward pressure on rates which has continued into q3 . Spot market is currently at a 24 month low, and although we expect rate environment to improve from current levels, second half of 2016 will be significantly weaker than first half of year . Frontline says almost 100 VLCC’s are still to be delivered over the next two years and this is expected to put pressure on the tanker market . On the other side a weakness in the market may also encourage scrapping of older tonnage, a factor which has been virtually absent for the last two years . Frontline remains focused on maintaining competitive breakeven levels and strong balance sheet . Frontline's scale, strong shareholder base and cost-effective operations are significant strengths that position us well in tanker market . Frontlines says secured bank financing of up to $548 million and is in the final stages of obtaining approval for further bank financing of up to $325 million.