d1127358_6-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
month of August 2010
Commission
File Number: 001-16601
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Frontline
Ltd.
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(Translation
of registrant's name into English)
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Par-la-Ville
Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
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(Address
of principal executive office)
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Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form 20-F
[X] Form 40-F
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): [ ].
Note:
Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K
if submitted solely to provide an attached annual report to security
holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): [ ].
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K
if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction
in which the registrant is incorporated, domiciled or legally organized (the
registrant's "home country"), or under the rules of the home country exchange on
which the registrant's securities are traded, as long as the report or other
document is not a press release, is not required to be and has not been
distributed to the registrant's security holders, and, if discussing a material
event, has already been the subject of a Form 6-K submission or other Commission
filing on EDGAR.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
as Exhibit 1 is a copy of the press release of Frontline Ltd. (the "Company"),
dated August 26, 2010, which contains the Company's financial information
for the three and six months ended June 30, 2010.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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FRONTLINE
LTD.
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(registrant)
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Dated:
August 31, 2010
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By:
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/s/ Inger
M. Klemp
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Inger
M. Klemp
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Principal
Financial Officer
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Exhibit
1
FRONTLINE
LTD.
INTERIM
REPORT JANUARY – JUNE 2010
Highlights
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·
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Frontline
reports net income attributable to the Company of $81.3 million and
earnings per share of $1.04 for the second quarter of 2010.
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·
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Frontline
reports net income attributable to the Company of $161.0 million and
earnings per share of $2.07 for the first half of 2010.
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Frontline
announces a cash dividend of $0.75 per share for the second quarter of
2010.
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In
June 2010, Frontline ordered two 156,900 dwt Suezmax newbuildings with
expected deliveries in February and May 2013 and secured options for two
similar Suezmax newbuildings.
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·
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In
May and June 2010, Frontline took delivery of the two 2009-built VLCCs,
Front Eminence and Front Endurance.
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The
third and fourth VLCC newbuildings from Shanghai Waigaoqiao Shipbuilding
Co., Ltd., Front Cecilie and Front Signe, were delivered in June and
August 2010, respectively.
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·
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The
third and fourth Suezmax newbuildings from Jiangsu Rongsheng Heavy
Industries Co., Ltd., Front Odin and Front Njord, were delivered in May
and August 2010, respectively.
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·
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In
June 2010, Frontline received notices from the owners of two chartered-in
2001-built Suezmax tankers and two chartered-in 2000-built VLCCs that the
owners exercised their option to extend the charter period for two years
to the end of 2013 from the expiry of the mandatory lease period at the
end of 2011.
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Second
Quarter and Six Months 2010 Results
The Board
of Frontline Ltd. (the "Company" or "Frontline") announces net income
attributable to the Company of $81.3 million for the second quarter of 2010,
equivalent to earnings per share of $1.04, compared with net income attributable
to the Company of $79.7 million and earnings per share of $1.02 for the
preceding quarter. The net income attributable to the Company in the second
quarter includes a gain of $6.7 million relating to the amortization of a
deferred gain on three lease terminations and a gain of $3.0 million relating to
a lease termination. Net operating income in the second quarter was $118.0
million compared with $112.0 million in the preceding quarter.
The
average daily time charter equivalents ("TCEs") earned in the spot and period
market in the second quarter by the Company's VLCCs, Suezmax tankers and Suezmax
OBO carriers were $46,600, $31,000 and $47,700, respectively, compared with
$45,300, $31,800, and $47,900, respectively, in the preceding quarter. The spot
earnings for the Company's double hull VLCCs and Suezmax vessels were $50,000
and $30,300, respectively, in the second quarter compared with $49,200 and
$30,600, respectively, in the first quarter. The Gemini Suezmax pool
had spot earnings of $29,800 per day in the second quarter compared to $30,900
per day in the first quarter. The Company's double hull VLCC tankers excluding
the floating time charter vessels had spot earnings of $51,900 per day in the
second quarter, compared with $54,000 in the first quarter.
Profit
share expense of $11.4 million has been recorded in the second quarter as a
result of the profit sharing agreement with Ship Finance International Limited
("Ship Finance") compared to $11.3 million in the preceding quarter. Ship
operating expenses increased by $1.8 million compared with the preceding quarter
primarily as a result of increase in running cost of $2.8 million mainly related
to the four newbuildings, which were delivered in the six months ended June 30,
2010, partially offset by a $1.0 million decrease in drydocking
costs.
Charterhire
expenses increased by $8.6 million in the second quarter compared with the
preceding quarter primarily due to an increase in the number of Nordic American
Tanker Shipping Ltd. ("NATS") vessels, which entered the Gemini pool and had a
corresponding increase in pool earnings. With effect from July 1, 2010, NATS
became a full pool partner in the Gemini pool and we
no longer charter in the NATS vessels. This will result in a decrease in charter
hire expense in the third quarter with a corresponding decrease in operating
revenues.
Interest
income was $3.9 million in the second quarter, of which $3.8 million relates to
restricted deposits held by subsidiaries reported in Independent Tankers
Corporation Limited ("ITCL"). Interest expense, net of capitalized interest, was
$37.6 million in the second quarter of which $8.7 million relates to
ITCL.
Frontline
announces net income attributable to the Company of $161.0 million for the six
months ended June 30, 2010, equivalent to earnings per share of $2.07. The
average daily TCEs earned in the spot and period market in the six months ended
June 30, 2010 by the Company's VLCCs, Suezmax tankers and Suezmax OBO carriers
were $46,000, $31,400 and $47,800, respectively, compared with $44,200, $32,300
and $43,500, respectively, in the six months ended June 30, 2009. The spot
earnings for the Company's double hull VLCCs and Suezmax vessels were $49,700
and $30,400, respectively, in the six months ended June 30, 2010. The Gemini
Suezmax pool had spot earnings of $30,300 per day and the Company's double hull
VLCC tankers excluding the floating time charter vessels had spot earnings of
$51,600 per day, respectively, in the six months ended June 30,
2010.
As of
June 30, 2010, the Company had total cash and cash equivalents of $168.6 million
and restricted cash of $305.1 million. Restricted cash includes $242.3 million
relating to deposits in ITCL and $62.8 million in Frontline, which is restricted
under the charter agreements with Ship Finance.
In August
2010, the Company has average total cash cost breakeven rates on a TCE basis for
VLCCs and Suezmax tankers of approximately $30,900 and $26,400,
respectively.
Fleet
Development
In
January 2010, Frontline terminated the bareboat charter for the single hull
Suezmax tanker Front Voyager. The termination took effect from April 1, 2010.
The vessel, owned by Frontline's subsidiary ITCL, was subsequently sold.
The
remaining Suezmax tanker chartered in from Eiger Shipping was redelivered at the
end of February 2010.
In March
2010, Frontline agreed with Ship Finance to terminate the long term charter
party for the single hull VLCC Golden River. Ship Finance simultaneously sold
the vessel to an unrelated third party. The termination of the charter took
place in April 2010 and Ship Finance has made a compensation payment to
Frontline of approximately $2.9 million for the early termination of the charter
party.
In
January 2010, the Company took delivery of the first Suezmax newbuilding from
Jiangsu Rongsheng Heavy Industries Co., Ltd. ("Rongsheng"), named Northia, and
the vessel was subsequently delivered to a major oil company on floating rate
time charter. In March and May 2010, the Company took delivery of the second and
the third Suezmax newbuildings, named Naticina and Front Odin, from Rongsheng.
The Naticina was subsequently delivered to a major oil company on floating rate
time charter and Front Odin commenced trading in the Gemini pool. In August
2010, the Company took delivery of the fourth and final Suezmax newbuilding from
Rongsheng, named Front Njord. Compensation payments for delayed delivery were
negotiated with the yard for all four vessels.
In April
2010, Frontline announced the acquisition of two 2009-built 321,300 dwt double
hull VLCC tankers; Callisto Glory and Andromeda Glory from an unrelated third
party. The first vessel; renamed Front Eminence, was delivered on May 18, 2010
and the second vessel; renamed Front Endurance, was delivered on June 28, 2010.
We have secured a loan facility representing approximately 70 percent financing
of the purchase price to part finance the purchase of the vessels and an amount
of $73.5 million of this facility was undrawn at June 30, 2010.
The third
and fourth VLCC newbuildings from Shanghai Waigaoqiao Shipbuilding Co., Ltd
("SWS"), Front Cecilie and Front Signe, were delivered according to schedule in
June and August 2010, respectively.
In June
2010, Frontline received notices from the owners of the two chartered-in
2001-built Suezmax tankers, Front Melody and Front Symphony, and the two
chartered-in 2000-built VLCCs, Front Tina and Front Commodore, that the owners
exercised their option to extend the charter period for two years to the end of
2013 from the expiry of the mandatory lease period at the end of 2011. The
Company believes the charter-in rates are attractive compared to current time
charter rates. The owners have the option to further extend the charter periods
until the end of 2015.
In June
2010, the single hull VLCC Front Duke was redelivered from her time charter
agreement and subsequently entered into a bareboat charter agreement expiring at
the end of 2012. The vessel will be operated as a floating storage unit and has
ceased to trade as a regular tanker.
Newbuilding
Program
In June
2010, Frontline entered into a contract with Rongsheng for the delivery of two
156,900 dwt Suezmax newbuildings. The vessels are expected to be delivered in
February and May 2013. Frontline has also secured options for two similar
Suezmax newbuildings. The contract price for the newbuildings is 15-20 percent
lower than indicated price levels for 2010 delivered tonnage.
As of
June 30, 2010, Frontline's newbuilding program comprised three Suezmax tankers,
two Suezmax newbuilding options and five VLCCs, which constitutes a contractual
cost of $799.7 million. Out of the total contractual cost the financial exposure
on two VLCC's ordered at Jinhaiwan of $252 million can be limited to the $54
million already paid-in installments ("the VLCC Options"). As of June 30, 2010,
installments of $246.4 million were paid on the newbuildings.
The
remaining installments to be paid as of June 30, 2010 amount to $355.3 million,
with expected payments of approximately $139.4 million in 2010, $112.9 million
in 2011, $21.9 million in 2012 and $81.2 million in 2013. These numbers exclude
payments on the VLCC Options.
The
Company has not yet secured financing for the two VLCCs and two Suezmax tanker
newbuildings to be delivered between 2011 and 2013. However, based on the
recently secured financing for Front Eminence and Front Endurance and
indications from banks, we assume a 70 percent financing of market value for
these newbuildings. The net remaining equity investment is thus approximately
$41.1 million, which is fully covered through the recent completion of the $225
million convertible bond offering.
Corporate
In April
2010, Frontline completed the issuance of the $225 million convertible bond
loan.
In August
2010, Frontline sold a 25 percent share in the ship management company SeaTeam
Management Pte Ltd. to Golden Ocean Group Limited.
On August
26, 2010, the Company's Board of Directors declared a dividend of $0.75 per
share. The record date for the dividend is September 10, 2010, ex dividend date
is September 8, 2010 and the dividend will be paid on or about September 24,
2010.
77,858,502
ordinary shares were outstanding as of June 30, 2010, and the weighted average
number of shares outstanding for the quarter was 77,858,502.
The
Market
The
market rate for a VLCC trading on a standard 'TD3' voyage between The Arabian
Gulf and Japan in the second quarter of 2010 was WS 88; equivalent to
$54,500/day; representing a decrease of WS 1.5 points or $1,100/day from the
first quarter of 2010 and an increase of WS 52 points from the second quarter of
2009. Present market indications are approximately in average $25,000/day in the
third quarter.
The
market rate for a Suezmax trading on a standard 'TD5' voyage between West Africa
("WAF") and Philadelphia in the second quarter of 2010 was WS 113.5; equivalent
to $32,700/day compared to $32,500/day in the first quarter. There was a
decrease of WS 0.5 points from the first to the second quarter and an increase
of WS 55 points from the second quarter of 2009. Present market indications are
approximately in average $15,000/day in the third quarter
Bunkers
at Fujairah averaged approximately $461/mt in the second quarter of 2010
compared to $468/mt in the first quarter of 2010; a decrease of $7/mt. Bunker
prices varied from a low of $422.5/mt at the end of May and a high of $500/mt at
the end of April. On August 26th,
2010 the quoted bunker price in Fujairah was $435.5/mt.
Philadelphia
bunkers averaged $469/mt in the second quarter, which was a decrease of $7/mt
from the first quarter of 2010. Bunker prices varied from a low of $416/mt at
the end of May and a high of $519/mt at the beginning of May. On August 26th,
2010 the quoted bunker price in Philadelphia was $448.5/mt.
The
International Energy Agency's ("IEA") August 2010 report stated an average OPEC
oil production, including Iraq, of 29 million barrels per day (mb/d) during the
second quarter of the year. This was a decrease of 80,000 barrels per day
compared to the first quarter of 2010 and an increase of 500,000 barrels per day
compared to the second quarter of 2009.
IEA
further estimate that world oil demand averaged 86.6 mb/d in the second quarter
of 2010, representing an increase of 510,000 barrels per day compared to the
first quarter of 2010, and approximately 2.6 mb/d from the second quarter of
2009. Additionally, the IEA estimates that world oil demand will average 86.6
mb/d in 2010 representing an increase of 2.2 percent or approximately 1.8 mb/d
from 2009.
The VLCC
fleet totalled 531 vessels at the end of the second quarter of 2010, up from 527
vessels at the end of the previous quarter. 12 VLCCs were delivered during the
quarter versus an estimated 18 at the beginning of the year. Throughout 2010 the
current estimate is 74 deliveries. The orderbook counted 174 vessels at the end
of the second quarter, down from 179 orders from the previous quarter. Seven new
orders were placed during the quarter and the current orderbook represents about
35 percent of the VLCC fleet. During the quarter eight vessels were removed from
the trading fleet for scrapping or conversion/storage purposes. According to
Fearnleys the single hull fleet now stands at 55 vessels.
The
Suezmax fleet totalled 406 vessels at the end of the second quarter, up from 401
vessels at the end of the previous quarter. Eight vessels were delivered during
the quarter versus an estimated 14 at the beginning of the year. For 2010 the
current estimate is 67 deliveries. The orderbook counted 146 vessels at the end
of the quarter, up from 127 vessels at the end of the previous quarter. 29 new
orders were placed during the quarter and the current orderbook now represents
36 percent of the total fleet. Two orders were reported cancelled and three
vessels were removed from the trading fleet during the quarter. According to
Fearnleys the single hull fleet now stands at 23 vessels.
Strategy
We focus
on maintaining our position as the leading operator of VLCC and Suezmax tankers.
We have recently added tonnage to our VLCC fleet and expanded our Suezmax
newbuilding program. The acquisitions and newbuilding order contributes to renew
the fleet and confirm Frontline's position as the world's leading independent
operator and owner of VLCC and Suezmax tonnage.
We keep a
lean organization and use outsourcing extensively, especially with respect to
technical operations and crewing and follow a non bureaucratic organization
model. This has resulted in a lower cost base than our peers. In addition, it
facilitates quick decision making and allows us to take advantage of the
opportunities that can arise in this highly volatile industry.
Frontline
focuses on developing and maintaining strong relationships with major oil
companies and industrial charterers and we believe the size of our fleet is
important in negotiating terms with these customers.
We also
believe that operating a certain number of vessels in the spot market, enables
us to capitalize on a potential stronger spot market and we focus on minimizing
time spent on ballast by "cross trading" our vessels.
The
Company continuously seek attractive investment and acquisition opportunities
and will finance such investments and acquisitions through a combination of debt
and equity.
Frontline
focuses on financial flexibility and has in the second quarter of 2010 secured
approximately $370 million in new capital and committed bank financing in
addition to the release of approximately $122 million restricted
cash.
Our fixed
charter coverage is estimated to be 34 percent and 22 percent in 2010 and 2011,
respectively. In addition to the fixed rate coverage we also have an additional
11 percent and 13 percent coverage on floating income in 2010 and 2011,
respectively. We aim to increase the fixed charter coverage for 2011-2013 from
the present levels.
We aim at
generating competitive returns to our shareholders. This will be supported by a
high dividend payout ratio with quarterly payments. The level of dividend will
be guided by present earnings, market prospects, current capital expenditure
programs as well as investment opportunities.
Outlook
In July
2010, the International Monetary Fund ("IMF") forecasted world growth to rise by
approximately 4.5 percent in 2010 and 4.25 percent in 2011. Relative to the
April 2010 World Economic Outlook (WEO) this represents an upward revision of
about 0.5 percentage point in 2010, reflecting stronger activity during the
first half of the year.
Despite
the stronger than expected first half recovery, the IMF warned that
uncertainties surrounding sovereign and financial sector risks in parts of the
euro area could spread more widely, posing difficulties for both financial
stability and the economic outlook.
August
11, 2010, the IEA released its monthly Oil Market Report in which the
organization increased its 2010 and 2011 global oil demand forecast by 80,000
bpd and 50,000 bpd, respectively, and projects that the world's oil consumption
in 2010 and 2011 will increase by 1.8 mb/d and 1.3 mb/d, respectively, compared
to 2009. The bulk of demand growth is expected to arise in the Middle East,
China and other non-OECD countries in 2010 and in OECD countries in 2011.
However, concern that the global economic recovery may falter from the second
half of 2010 pose a significant downward risk to the forecast.
So far in
2010, there has been a strong growth in imports from WAF and South America
(Venezuela/Brazil) to China, driving ton-miles. This development is expected to
continue, which is positive for the tanker market as even modest increases
significantly boosts ton-mile demand.
The
tanker industry still has a high number of expected vessel deliveries in 2010
and 2011. However, the actual deliveries in 2009 and in the first half of 2010
have been significantly lower than anticipated and this development is likely to
be further strengthened by the expected delays, slippage and cancellations of
newbuilding orders.
The phase
out of the remaining single hull fleet, currently estimated to be approximately
eight percent of the fleet, according to Fearnleys, will further reduce the
supply of vessels in 2010.
As
advised in the first quarter 2010 earnings release, Frontline made an agreement
with Ship Finance to release $111.7 million restricted cash in March 2010. The
released funds were used to prepay parts of the charter hire to Ship Finance for
six months beginning April 1, 2010 and have reduced Frontline's cash breakeven
level substantially for 31 vessels in this six month period.
The
Company's fixed charter coverage and low cash cost breakeven rates, which is
further decreased in the third quarter of 2010, provides a solid platform for
Frontline's operations. This, combined with the strengthened balance sheet
following the raising of new capital in the second quarter of 2010, puts the
Company in a strong position not only to handle the challenges of the current
weakness in the tanker market, but also to be able to react to attractive market
opportunities that can occur.
The Board
is somewhat concerned about the high number of expected vessel deliveries which
will come to the market in the next two years and the effect the net fleet
growth will have on the market balance. However, the market balance might be
considerably improved if expected delays, slippage and cancellations of
newbuilding orders should occur and/or with increased world GDP growth, oil
consumption and ton-mile demand.
Based on
the current weakness in the tanker market and the Company's trading results
achieved so far in the third quarter, the Board expects a materially lower
result in the third quarter of 2010 than in the second quarter of
2010.
The Board
is considering several strategic possibilities to expand the Company within
crude oil transportation.
Related
Party Transactions
The
Company's most significant related party transactions are with Ship Finance
International Limited ("Ship Finance"), a company under the significant
influence of our principal shareholder, as the Company leases the majority of
its vessels from Ship Finance and pays Ship Finance a profit share based on the
earnings of these vessels.
Amounts
earned from other related parties comprise office rental income, technical and
commercial management fees, newbuilding supervision fees, freights, corporate
and administrative services income and interest income. Amounts paid to related
parties comprise primarily of rental for office space and guarantee
fees.
Effective
February 5, 2010, Vista International Finance Inc, a wholly owned subsidiary of
Frontline Ltd. purchased the VLCC, Front
Vista, from Ship Finance for $58.5 million. The Front Vista had been
chartered in by Frontline Shipping. Due to the termination of the charter, a
compensation fee of $0.4 million was paid to Ship Finance.
In March
2010, the Company made certain amendments to the charter agreements with Ship
Finance relating to 31 double hull crude oil tankers and OBOs, which resulted in
our restricted cash deposits being reduced in exchange for a guarantee from us
for the payment of charterhire. Withdrawals from these restricted cash deposits
will be prohibited. Restricted cash deposits held in respect of the Ship Finance
charter reserves decreased by $111.7 million resulting from amendments to the
charter agreements and $10.6 million due to reserves no longer required for two
vessels. We also made an advance payment of charterhire less operating expenses
of $72.8 million covering part of the payments due to Ship Finance over the next
six months.
In March
2010, Frontline agreed with Ship Finance to terminate the long term charter
party for the single hull VLCC Golden River and Ship Finance simultaneously sold
the vessel to an unrelated third party. The termination of the charter took
place in April 2010 and Ship Finance made a compensation payment to Frontline of
approximately $2.9 million for the early termination of the charter party, which
was recognized in the second quarter.
Forward
Looking Statements
This
press release contains forward looking statements. These statements are based
upon various assumptions, many of which are based, in turn, upon further
assumptions, including Frontline management's examination of historical
operating trends. Although Frontline believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond its control, Frontline cannot give assurance that it will achieve or
accomplish these expectations, beliefs or intentions.
Important
factors that, in the Company's view, could cause actual results to differ
materially from those discussed in this press release include the strength of
world economies and currencies, general market conditions including fluctuations
in charter hire rates and vessel values, changes in demand in the tanker market
as a result of changes in OPEC's petroleum production levels and world wide oil
consumption and storage, changes in the Company's operating expenses including
bunker prices, dry-docking and insurance costs, changes in governmental rules
and regulations or actions taken by regulatory authorities, potential liability
from pending or future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to accidents or
political events, and other important factors described from time to time in the
reports filed by the Company with the United States Securities and Exchange
Commission.
The Board
of Directors
Frontline
Ltd.
Hamilton,
Bermuda
August
26, 2010
Questions
should be directed to:
Jens
Martin Jensen: Chief Executive Officer, Frontline Management AS
+47 23 11 40
99
Inger M.
Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40
76
FRONTLINE
LTD.
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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2009
Apr-Jun
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2010
Apr-Jun
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CONDENSED
CONSOLIDATED INCOME STATEMENTS
(in
thousands of $)
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2010
Jan-Jun
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2009
Jan-Jun
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2009
Jan-Dec
(audited)
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281,536 |
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356,116 |
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Total
operating revenues
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687,939 |
|
|
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638,137 |
|
|
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1,133,286 |
|
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- |
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|
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9,664 |
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Gain
on sale of assets and amortization of deferred gains
|
|
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19,481 |
|
|
|
- |
|
|
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3,061 |
|
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48,691 |
|
|
|
76,227 |
|
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Voyage
expenses and commission
|
|
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144,161 |
|
|
|
112,884 |
|
|
|
219,375 |
|
| |
8,016 |
|
|
|
11,430 |
|
|
Profit
share expense
|
|
|
22,745 |
|
|
|
22,503 |
|
|
|
33,018 |
|
| |
50,794 |
|
|
|
47,169 |
|
|
Ship
operating expenses
|
|
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92,540 |
|
|
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99,407 |
|
|
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206,381 |
|
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45,218 |
|
|
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52,498 |
|
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Charterhire
expenses
|
|
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96,398 |
|
|
|
97,194 |
|
|
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169,503 |
|
| |
7,016 |
|
|
|
7,637 |
|
|
Administrative
expenses
|
|
|
15,513 |
|
|
|
15,271 |
|
|
|
30,647 |
|
| |
59,667 |
|
|
|
52,841 |
|
|
Depreciation
|
|
|
105,894 |
|
|
|
117,783 |
|
|
|
237,313 |
|
| |
219,402 |
|
|
|
247,802 |
|
|
Total
operating expenses
|
|
|
477,251 |
|
|
|
465,042 |
|
|
|
896,237 |
|
| |
62,134 |
|
|
|
117,978 |
|
|
Net
operating income
|
|
|
230,169 |
|
|
|
173,095 |
|
|
|
240,110 |
|
| |
5,551 |
|
|
|
3,900 |
|
|
Interest
income
|
|
|
7,976 |
|
|
|
11,624 |
|
|
|
22,969 |
|
| |
(40,131 |
) |
|
|
(37,555 |
) |
|
Interest
expense
|
|
|
(73,066 |
) |
|
|
(80,751 |
) |
|
|
(160,988 |
) |
| |
(101 |
) |
|
|
(112 |
) |
|
Share
of results from associated companies
|
|
|
(285 |
) |
|
|
(265 |
) |
|
|
(544 |
) |
| |
(325 |
) |
|
|
167 |
|
|
Foreign
currency exchange gain (loss)
|
|
|
181 |
|
|
|
(434 |
) |
|
|
(346 |
) |
| |
1,262 |
|
|
|
(2,833 |
) |
|
Other
non-operating items
|
|
|
(2,625 |
) |
|
|
2,423 |
|
|
|
4,632 |
|
| |
28,390 |
|
|
|
81,545 |
|
|
Net
income before taxes and noncontrolling interest
|
|
|
162,350 |
|
|
|
105,692 |
|
|
|
105,833 |
|
| |
(48 |
) |
|
|
(55 |
) |
|
Taxes
|
|
|
(104 |
) |
|
|
(46 |
) |
|
|
(361 |
) |
| |
28,342 |
|
|
|
81,490 |
|
|
Net
income
|
|
|
162,246 |
|
|
|
105,646 |
|
|
|
105,472 |
|
| |
(572 |
) |
|
|
(184 |
) |
|
Net
income attributable to noncontrolling interest
|
|
|
(1,252 |
) |
|
|
(1,258 |
) |
|
|
(2,771 |
) |
| |
27,770 |
|
|
|
81,306 |
|
|
Net
income attributable to Frontline Ltd.
|
|
|
160,994 |
|
|
|
104,388 |
|
|
|
102,701 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
0.36 |
|
|
$ |
1.04 |
|
|
Basic
earnings per share ($)
|
|
$ |
2.07 |
|
|
$ |
1.34 |
|
|
$ |
1.32 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Income
on timecharter basis ($ per day per ship)*
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
38,400 |
|
|
|
46,600 |
|
|
VLCC
|
|
|
46,000 |
|
|
|
44,200 |
|
|
|
38,300 |
|
| |
26,800 |
|
|
|
31,000 |
|
|
Suezmax
|
|
|
31,400 |
|
|
|
32,300 |
|
|
|
25,300 |
|
| |
42,700 |
|
|
|
47,700 |
|
|
Suezmax
OBO
|
|
|
47,800 |
|
|
|
43,500 |
|
|
|
43,000 |
|
| |
|
|
|
|
|
|
*
Basis = Calendar days minus off-hire. Figures after deduction of
broker commission
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
Apr-Jun
|
|
|
2010
Apr-Jun
|
|
|
CONSOLIDATED
STATEMENTS OF
COMPREHENSIVE
INCOME
(in
thousands of $)
|
|
2010
Jan-Jun
|
|
|
2009
Jan-Jun
|
|
|
2009
Jan-Dec
(audited)
|
|
| |
27,770 |
|
|
|
81,306 |
|
|
Net
income attributable to Frontline Ltd.
|
|
|
160,994 |
|
|
|
104,388 |
|
|
|
102,701 |
|
| |
16,347 |
|
|
|
(3,076 |
) |
|
Unrealized
(loss) gain from marketable securities
|
|
|
(9,423 |
) |
|
|
(11,371 |
) |
|
|
2,782 |
|
| |
217 |
|
|
|
(144 |
) |
|
Foreign
currency translation (loss) gain
|
|
|
(204 |
) |
|
|
337 |
|
|
|
759 |
|
| |
16,564 |
|
|
|
(3,220 |
) |
|
Other
comprehensive (loss) income
|
|
|
(9,627 |
) |
|
|
(11,034 |
) |
|
|
3,541 |
|
| |
44,334 |
|
|
|
78,086 |
|
|
Comprehensive
income attributable to Frontline Ltd.
|
|
|
151,367 |
|
|
|
93,354 |
|
|
|
106,242 |
|
| |
572 |
|
|
|
184 |
|
|
Net
income attributable to noncontrolling interest
|
|
|
1,252 |
|
|
|
1,258 |
|
|
|
2,771 |
|
| |
44,906 |
|
|
|
78,270 |
|
|
Total
comprehensive income
|
|
|
152,619 |
|
|
|
94,612 |
|
|
|
109,013 |
|
See
accompanying notes that are an integral part of these condensed consolidated
financial statements.
FRONTLINE
LTD.
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
thousands of $)
|
|
2010
Jun
30
|
|
|
2009
Jun
30
|
|
|
2009
Dec
31
(audited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Short
term
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
168,609 |
|
|
|
120,604 |
|
|
|
82,575 |
|
|
Restricted
cash
|
|
|
235,977 |
|
|
|
359,285 |
|
|
|
429,946 |
|
|
Other
current assets
|
|
|
344,623 |
|
|
|
225,347 |
|
|
|
270,661 |
|
|
Long
term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
69,116 |
|
|
|
148,447 |
|
|
|
70,075 |
|
|
Newbuildings
|
|
|
277,915 |
|
|
|
379,502 |
|
|
|
413,968 |
|
|
Vessels
and equipment, net
|
|
|
1,227,519 |
|
|
|
699,162 |
|
|
|
678,694 |
|
|
Vessels
under capital lease, net
|
|
|
1,554,954 |
|
|
|
1,942,700 |
|
|
|
1,740,666 |
|
|
Investment
in finance lease
|
|
|
56,161 |
|
|
|
- |
|
|
|
- |
|
|
Investment
in unconsolidated subsidiaries and associated companies
|
|
|
3,638 |
|
|
|
4,202 |
|
|
|
3,923 |
|
|
Other
long-term assets
|
|
|
28,242 |
|
|
|
24,387 |
|
|
|
24,710 |
|
|
Total
assets
|
|
|
3,966,754 |
|
|
|
3,903,636 |
|
|
|
3,715,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
term liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
term debt and current portion of long term debt
|
|
|
105,573 |
|
|
|
174,938 |
|
|
|
123,884 |
|
|
Current
portion of obligations under capital lease
|
|
|
196,478 |
|
|
|
249,694 |
|
|
|
285,753 |
|
|
Other
current liabilities
|
|
|
212,255 |
|
|
|
137,564 |
|
|
|
195,725 |
|
|
Long
term liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
term debt
|
|
|
1,146,776 |
|
|
|
710,424 |
|
|
|
760,698 |
|
|
Obligations
under capital lease
|
|
|
1,465,655 |
|
|
|
1,837,388 |
|
|
|
1,579,708 |
|
|
Other
long term liabilities
|
|
|
13,378 |
|
|
|
27,357 |
|
|
|
18,702 |
|
|
Commitments
and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frontline
Ltd. stockholders' equity
|
|
|
815,979 |
|
|
|
758,376 |
|
|
|
741,340 |
|
|
Noncontrolling
interest
|
|
|
10,660 |
|
|
|
7,895 |
|
|
|
9,408 |
|
|
Total
equity
|
|
|
826,639 |
|
|
|
766,271 |
|
|
|
750,748 |
|
|
Total
liabilities and equity
|
|
|
3,966,754 |
|
|
|
3,903,636 |
|
|
|
3,715,218 |
|
See
accompanying notes that are an integral part of these condensed consolidated
financial statements.
FRONTLINE
LTD.
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
2009
Apr-Jun
|
|
|
2010
Apr-Jun
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands of $)
|
|
2010
Jan-Jun
|
|
|
2009
Jan-Jun
|
|
|
2009
Jan-Dec
(audited)
|
|
| |
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
| |
28,342 |
|
|
|
81,490 |
|
|
Net
income
|
|
|
162,246 |
|
|
|
105,646 |
|
|
|
105,472 |
|
| |
|
|
|
|
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
59,936 |
|
|
|
53,185 |
|
|
Depreciation
and amortization
|
|
|
106,554 |
|
|
|
118,297 |
|
|
|
238,595 |
|
| |
574 |
|
|
|
36 |
|
|
Unrealized
foreign currency exchange (gain) loss
|
|
|
(71 |
) |
|
|
567 |
|
|
|
686 |
|
| |
- |
|
|
|
(9,664 |
) |
|
Gain
on sale of assets and amortization of deferred gains
|
|
|
(19,481 |
) |
|
|
- |
|
|
|
(3,061 |
) |
| |
101 |
|
|
|
112 |
|
|
Equity
losses of associated companies
|
|
|
285 |
|
|
|
265 |
|
|
|
544 |
|
| |
(714 |
) |
|
|
(1,592 |
) |
|
Other,
net
|
|
|
(1,358 |
) |
|
|
(728 |
) |
|
|
(2,612 |
) |
| |
30,347 |
|
|
|
30,391 |
|
|
Change
in operating assets and liabilities
|
|
|
(94,241 |
) |
|
|
(8,781 |
) |
|
|
(18,104 |
) |
| |
118,586 |
|
|
|
153,958 |
|
|
Net
cash provided by operating activities
|
|
|
153,934 |
|
|
|
215,266 |
|
|
|
321,520 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(15,523 |
) |
|
|
(12,972 |
) |
|
Maturity
(placement) of restricted cash
|
|
|
189,234 |
|
|
|
76,120 |
|
|
|
75,620 |
|
| |
(69,255 |
) |
|
|
(306,165 |
) |
|
Additions
to newbuildings, vessels and equipment
|
|
|
(405,574 |
) |
|
|
(145,984 |
) |
|
|
(170,049 |
) |
| |
- |
|
|
|
316 |
|
|
Finance
lease payments received
|
|
|
597 |
|
|
|
- |
|
|
|
- |
|
| |
- |
|
|
|
11,061 |
|
|
Proceeds
from sale of vessels and equipment
|
|
|
11,061 |
|
|
|
- |
|
|
|
2,390 |
|
| |
(84,778 |
) |
|
|
(307,760 |
) |
|
Net
cash used in investing activities
|
|
|
(204,682 |
) |
|
|
(69,864 |
) |
|
|
(92,039 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
83,042 |
|
|
|
432,591 |
|
|
Proceeds
from long-term debt, net of fees paid
|
|
|
495,830 |
|
|
|
130,669 |
|
|
|
240,883 |
|
| |
(138,337 |
) |
|
|
(98,012 |
) |
|
Repayment
of long-term debt
|
|
|
(132,254 |
) |
|
|
(154,397 |
) |
|
|
(267,336 |
) |
| |
- |
|
|
|
(2,732 |
) |
|
Fees
paid on early redemption of bond debt
|
|
|
(2,732 |
) |
|
|
- |
|
|
|
- |
|
| |
(45,021 |
) |
|
|
(36,568 |
) |
|
Repayment
of capital leases
|
|
|
(146,203 |
) |
|
|
(152,958 |
) |
|
|
(241,198 |
) |
| |
(19,465 |
) |
|
|
(58,394 |
) |
|
Dividends
paid
|
|
|
(77,859 |
) |
|
|
(38,931 |
) |
|
|
(70,074 |
) |
| |
(119,781 |
) |
|
|
236,885 |
|
|
Net
cash provided by (used in) financing activities
|
|
|
136,782 |
|
|
|
(215,617 |
) |
|
|
(337,725 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(85,973 |
) |
|
|
83,083 |
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
86,034 |
|
|
|
(70,215 |
) |
|
|
(108,244 |
) |
| |
206,577 |
|
|
|
85,526 |
|
|
Cash
and cash equivalents at start of period
|
|
|
82,575 |
|
|
|
190,819 |
|
|
|
190,819 |
|
| |
120,604 |
|
|
|
168,609 |
|
|
Cash
and cash equivalents at end of period
|
|
|
168,609 |
|
|
|
120,604 |
|
|
|
82,575 |
|
See
accompanying notes that are an integral part of these condensed consolidated
financial statements.
FRONTLINE
LTD.
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
(in
thousands of $ except number of shares)
|
|
2010
Jan-Jun
|
|
|
2009
Jan-Jun
|
|
|
2009
Jan-Dec
(audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
OF SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning and end of period
|
|
|
77,858,502 |
|
|
|
77,858,502 |
|
|
|
77,858,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE
CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning and end of period
|
|
|
194,646 |
|
|
|
194,646 |
|
|
|
194,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL
PAID IN CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning of period
|
|
|
221,991 |
|
|
|
219,036 |
|
|
|
219,036 |
|
|
Stock
option expense
|
|
|
1,131 |
|
|
|
1,736 |
|
|
|
2,955 |
|
|
Balance
at end of period
|
|
|
223,122 |
|
|
|
220,772 |
|
|
|
221,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTRIBUTED
SURPLUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning and end of period
|
|
|
248,360 |
|
|
|
248,360 |
|
|
|
248,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED
OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning of period
|
|
|
(1,686 |
) |
|
|
(5,227 |
) |
|
|
(5,227 |
) |
|
Other
comprehensive (loss) income
|
|
|
(9,627 |
) |
|
|
(11,034 |
) |
|
|
3,541 |
|
|
Balance
at end of period
|
|
|
(11,313 |
) |
|
|
(16,261 |
) |
|
|
(1,686 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RETAINED
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning of period
|
|
|
78,029 |
|
|
|
45,402 |
|
|
|
45,402 |
|
|
Net
income
|
|
|
160,994 |
|
|
|
104,388 |
|
|
|
102,701 |
|
|
Cash
dividends
|
|
|
(77,859 |
) |
|
|
(38,931 |
) |
|
|
(70,074 |
) |
|
Balance
at end of period
|
|
|
161,164 |
|
|
|
110,859 |
|
|
|
78,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRONTLINE
LTD. STOCKHOLDERS' EQUITY
|
|
|
815,979 |
|
|
|
758,376 |
|
|
|
741,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONCONTROLLING
INTEREST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at beginning of period
|
|
|
9,408 |
|
|
|
6,637 |
|
|
|
6,637 |
|
|
Net
income
|
|
|
1,252 |
|
|
|
1,258 |
|
|
|
2,771 |
|
|
Balance
at end of period
|
|
|
10,660 |
|
|
|
7,895 |
|
|
|
9,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
826,639 |
|
|
|
766,271 |
|
|
|
750,748 |
|
See
accompanying notes that are an integral part of these condensed consolidated
financial statements.
FRONTLINE
LTD.
UNAUDITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Frontline
Ltd. (the "Company" or "Frontline") is a Bermuda based shipping company engaged
primarily in the ownership and operation of oil tankers. The Company's ordinary
shares are listed on the New York Stock Exchange, the Oslo Stock Exchange and
the London Stock Exchange.
The
condensed consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States. The condensed
consolidated financial statements do not include all of the disclosures required
in the annual consolidated financial statements, and should be read in
conjunction with the Company's annual financial statements as at December 31,
2009.
Significant
accounting policies
The
accounting policies adopted in the preparation of the condensed consolidated
financial statements are consistent with those followed in the preparation of
the Company's annual consolidated financial statements for the year ended
December 31, 2009.
During
the six months ended June 30, 2010, three Suezmax newbuildings and one VLCC
newbuilding were completed and transferred from Newbuildings to Vessels and
Equipment.
The
Company capitalized newbuilding installments and costs of $22.4 million and
interest of $6.9 million in the six months ended June 30, 2010.
Following
the sale of the Front
Voyager on April 8 and the scheduled repayment of principal in the amount
of $0.7 million on April 1, 2010, the full amount outstanding on the related
Term Loan of $10.2 million was repaid in full on April 13. In addition, costs of
approximately $2.7 million were paid in connection with the early redemption of
the debt.
On March
26, 2010, the Company announced the private placement of $225 million of
convertible bonds and the offering of the bonds closed on April 14, 2010. The
senior, unsecured convertible bonds have an annual coupon of 4.50%, which is
paid quarterly in arrears and have a conversion price of $39.00. The reference
price has been set at $29.7784 (NOK 180.0045). The applicable USD/NOK exchange
rate has been set at 6.0448. The Company declared a dividend of $0.75 on May 21,
2010. The conversion price of the bond was adjusted from $39.00 to $38.0895
effective on June 2, 2010 which was the date the shares traded ex-dividend. The
bonds will be issued and redeemed at 100% of their principal amount and will,
unless previously redeemed, converted or purchased and cancelled, mature on
April 14, 2015.
In June
2010, the Company entered into a $200 million term loan facility agreement in
order to re-finance a $50.6 million loan facility and part finance the purchase
of Front Eminence and Front Endurance. The loan is repayable in June 2015. The
facility contains a minimum value covenant and covenants that require the
Company to maintain a minimum level of free cash, a certain level of market
adjusted net worth and positive working capital.
|
5.
|
FAIR
VALUE OF FINANCIAL INSTRUMENTS
|
Marketable
securities of $53.5 million at June 30, 2010 (December 31, 2009: $62.9 million)
are measured at fair value on a recurring basis. The fair value of marketable
securities is based on the quoted market prices. This fair value falls within
the "Level 1" category of ASC 820-10 being "measurements using quoted prices in
active markets for identical assets or liabilities".
|
6.
|
RELATED
PARTY TRANSACTIONS
|
The
Company's most significant related party transactions are with Ship Finance
International Limited ("Ship Finance"), a company under the significant
influence of our principal shareholder, as the Company leases the majority of
its vessels from Ship Finance and pays Ship Finance a profit share based on the
earnings of these vessels.
Amounts
earned from other related parties comprise office rental income, technical and
commercial management fees, newbuilding supervision fees, freights, corporate
and administrative services income and interest income. Amounts paid to related
parties comprise primarily of rental for office space and guarantee
fees.
Effective
February 5, 2010, Vista International Finance Inc, a wholly owned subsidiary of
Frontline Ltd. purchased the VLCC, Front
Vista, from Ship Finance for $58.5 million. The Front Vista had been
chartered in by Frontline Shipping. Due to the termination of the charter, a
compensation fee of $0.4 million was paid to Ship Finance.
In March
2010, the Company made certain amendments to the charter agreements with Ship
Finance relating to 31 double hull crude oil tankers and OBOs, which resulted in
our restricted cash deposits being reduced in exchange for a guarantee from us
for the payment of charterhire. Withdrawals from these restricted cash deposits
will be prohibited. Restricted cash deposits held in respect of the Ship Finance
charter reserves decreased by $111.7 million resulting from amendments to the
charter agreements and $10.6 million due to reserves no longer required for two
vessels. We also made an advance payment of charterhire less operating expenses
of $72.8 million covering part of the payments due to Ship Finance over the next
six months.
In March
2010, Frontline agreed with Ship Finance to terminate the long term charter
party for the single hull VLCC Golden River and Ship Finance simultaneously sold
the vessel to an unrelated third party. The termination of the charter took
place in April 2010 and Ship Finance made a compensation payment to Frontline of
approximately $2.9 million for the early termination of the charter party, which
was recognized in the second quarter.
|
7.
|
COMMITMENTS AND
CONTINGENCIES
|
As of
June 30, 2010, the Company was committed to make newbuilding installments of
$553.3 million as follows;
|
(in
millions of $)
|
|
Total
|
|
|
2010
|
|
|
166.4 |
|
|
2011
|
|
|
220.9 |
|
| 2012 |
|
|
84.9 |
|
| 2013 |
|
|
81.2 |
|
|
Total:
|
|
|
553.3 |
|
As of
June 30, 2010, the Company has an option to reduce its newbuilding commitments
on two VLCCs by $198 million to $54 million already paid.
In June
2010, the Company entered into a contract with Jiangsu Rongsheng Heavy
Industries Co., Ltd. for the delivery of two 156,900 dwt Suezmax newbuildings.
The vessels are expected to be delivered in February and May 2013. The Company
has also secured options for two similar Suezmax newbuildings.
In
February 2010, the Company's Board of Directors declared a cash dividend of
$0.25 per share, which was paid on March 30, 2010.
In May
2010, the Company's Board of Directors declared a cash dividend of $0.75 per
share, which was paid on June 21, 2010.
With
effect from July 1, 2010, NATS became a full pool partner in the Gemini pool and we
no longer charter in the NATS vessels. This will result in a decrease in charter
hire expense in the third quarter with a corresponding decrease in operating
revenues.
The
fourth VLCC newbuilding from Waigaoqiao, Front Signe, was delivered on August 9,
2010 and the fourth and final Suezmax newbuilding from Rongsheng, Front Njord,
was delivered on August 12, 2010.
In August
2010, the Company sold a 25 percent share in the ship management company SeaTeam
Management Pte Ltd. to Golden Ocean Group Limited.
On August
26, 2010, the Company's Board of Directors declared a dividend of $0.75 per
share. The record date for the dividend is September 10, 2010, ex dividend date
is September 8, 2010 and the dividend will be paid on or about September 24,
2010.
FRONTLINE
LTD.
INTERIM
REPORT JANUARY – JUNE 2010
Responsibility
Statement
We
confirm, to the best of our knowledge, that the condensed consolidated financial
statements for the period January 1 to June 30, 2010 have been prepared in
accordance with U.S generally accepted accounting principles, and give a true
and fair view of the Company's assets, liabilities, financial position and
profit or loss as a whole. We also confirm, to the best of our knowledge, that
the interim management report includes a fair review of important events that
have occurred during the first six months of the financial year and their impact
on the condensed consolidated financial statements, a description of the
principal risks and uncertainties for the remaining six months of the financial
year, and major related parties transactions.
The Board
of Directors
Frontline
Ltd.
Hamilton,
Bermuda
August
26, 2010