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Frontline books $31.1m profit, renegotiates SFL charters, outlook 'considerably improved'

Frontline books $31.1m profit, renegotiates SFL charters, outlook 'considerably improved'
John Fredriksen's Frontline has reported a $31.1m profit for the first quarter, as the crude tanker market improved and bunker prices remained low.

Time charter equivalent (TCE) income for the company's fleet rose compared to Q1 2014 for both VLCCs and suezmaxes, from $32,700 per day to $49,400 per day and from $27,700 per day to $33,100 per day respectively.

The company also announced amendments to its agreements with Ship Finance International (SFL), from whom Frontline charters 17 of its vessels, which improve cash break even rates for its VLCCs to $24,800 per day and $19,500 per day for suezmaxes from 1 July.

The renegotiated deal included the sale of 55m Frontline shares to SFL, and a new profit split of 50% above the new time charter rates.

"Several recent events have considerably improved the outlook for Frontline," the company wrote in its financial results release, listing the strong tanker market, SFL agreement renegotiation, the raising of $88m in equity and the successful repayment of a $93.4m convertible bond loan as positive developments.

Frontline expects second quarter operating revenues to be in line with Q1, but with a lighter bottom line as four vessels go into drydock during the period.