Frontline (FRO) Tops Q3 EPS by 2c

Frontline (NYSE: FRO) reported Q3 EPS of ($0.06), $0.02 better than the analyst estimate of ($0.08).

Highlights

• Reports a net loss of $10.0 million, or $0.06 per share, for the third quarter of 2019.
• Reported spot average daily time charter equivalent (“TCE”) for VLCCs, Suezmax tankers and LR2 tankers in the third quarter were $22,900, $16,200 and $15,900, respectively.
• For the fourth quarter of 2019, we estimate spot TCE of $64,800 contracted for 78% of vessel days for VLCCs, $49,400 contracted for 71% of vessel days for Suezmax tankers and $29,900 contracted for 74% of vessel days for LR2s. The estimated spot TCEs are provided on a load-to-discharge basis. In line with previous quarters, we expect the spot TCEs for the full quarter to be lower than the TCEs currently contracted, primarily due to the impact of ballast days at the end of the quarter.
• In October 2019, the Company announced that it had extended its senior unsecured revolving credit facility of up to $275.0 million with an affiliate of the Company’s shareholder, Hemen Holding Ltd. to May 2021.
• In November 2019, the Company secured a commitment from ICBC Financial Leasing Co., Ltd (“ICBCL”) for a sale-and-leaseback agreement in an amount of up to $544.0 million, which is subject to final documentation.
• Declared a cash dividend of $0.10 per share for the third quarter of 2019.

Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented:

“We believe that tanker market fundamentals look encouraging and we have entered a period of substantially stronger vessel earnings. Our strategy has focused on increasing our spot exposure throughout the year and we believe this will be reflected in our results for the fourth quarter. While the brief spike in tanker rates made news headlines, it would not have been possible without a fundamentally tighter tanker market. We expect to see a dynamic and volatile market environment in the coming quarters and we will seek to opportunistically secure charter coverage if market strength persists.” ​

Inger M. Klemp, Chief Financial Officer of Frontline Management AS added:

“We are very pleased to have secured the financing commitment from ICBCL on highly attractive terms, which marks an important transaction between ICBCL and Frontline. Through this transaction we extend our capital sources at a very attractive capital cost, maintain our industry leading cash break-even rates and maximise potential cash flow per share after debt service.”

For earnings history and earnings-related data on Frontline (FRO) click here.

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