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Frontline slashes losses

Frontline slashes losses
Oslo: Frontline today reported a $16.6m loss in the fourth quarter, bringing the year loss to $82.8m.

The losses are significantly down on the previous quarter's $49m and 2011's $530m losses.

For the world's largest tanker company, average daily time charter equivalents on the spot and period markets for the quarter were up with VLCCs, suezmax tankers and suezmax OBO carriers at $19,300, $14,000 and $35,100, respectively, compared  with $12,300, $10,500 and $33,700 in the preceding quarter. Forecast break-even rates for 2013 are around $24,200 and $18,800 for VLCCs and suezmaxes respectively.

Spot earnings for the the shipowner's double hull VLCCs and suezmax vessels were $18,500 and $14,000, respectively, compared with $13,300 and $10,500 in the previous three months.

Fleet reduction through redelivery is Frontline's chosen path forward as the company forecasts continued oversupply and near-zero earnings on a limited number of fixtures in the VLCC market. The earnings release warned that if there is no upturn in the market before 2015, the company will not have sufficient cash to repay a $255m convertible bond loan which matures in April 2015; this could trigger another restructuring of the company less than four years after restructuring was successfully completed in December 2011, which resulted in the creation of Frontline 2012.