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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June, 1999
Frontline Ltd. (formerly London & Overseas Freighters Limited)
______________________________________________________________
(Translation of registrant's name into English)
Mercury House, 101 Front Street, Hamilton, HM 12, Bermuda
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F
_____ _____
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes No X
______
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-_______
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FIRST QUARTER RESULTS
Frontline earned net income of $0.2 million in the first quarter
of 1999, compared with $9.1 million for the first quarter of
1998. Earnings per share for the quarter were $0.00, (1997 -
$0.2) and the weighted average number of shares outstanding for
the quarter and at March 31, 1999 was 46,106,860 (as at March 31,
1998 - 46,106,860 and for the quarter then ended - 46,106,360).
Cashflow per share for the quarter was $0.30, compared with $0.45
for the same quarter in 1998.
Earnings before interest, tax, depreciation, and amortisation
(EBITDA) for the quarter, including earnings from associated
companies were $29.1 million, compared with $34.0 million for the
comparable period. The fleet of VLCCs and Suezmaxes operated by
the Company has increased by six vessels since the first quarter
of 1998 but the effect of this on operating profit has been
offset by the fall in timecharter equivalent earnings ("TCEs")
earned. The average daily TCEs earned by the VLCCs, Suezmax
tankers, and Suezmax OBO carriers were $29,100, $20,400 and
$20,600, respectively, compared with $29,500, $26,100 and $26,900
in the first quarter of 1998. Total days on offhire in the 1999
quarter were seven for the VLCCs and 25 for the Suezmax fleet.
If the majority holding position in ICB had been accounted for on
an equity basis in Frontline's accounts, it would have increased
EBITDA by approximately $10.3 million.
Total operating costs and depreciation have increased due to the
expansion of the fleet. However, the Company is continuing to
reduce average daily ship operating costs in accordance with its
previously stated objectives.
Net other expenses for the quarter were $15.1 million (1998 -
$13.2 million). This increase principally reflects an increase
in the average debt resulting from the fleet expansion, offset by
reduced interest rates and short-term financing charges incurred
in the first quarter of 1998.
THE MARKET
The high activity in the tanker market, which was partly an
effect of Iraq's crude export, continued into 1999. VLCC rates
remained at a stable level for the first two months of the
quarter. However, towards the end of the quarter, rates
declined, and this trend has continued into the second quarter
with rates for modern VLCC tonnage as low as $10,000 to $12,000
per day. An oversupply of available ships, reductions in OPEC
production and annual overhauls at refineries have contributed to
this market situation. A total of 13 VLCCs were delivered in the
first quarter of 1999, while 12 have been sold for scrap.
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During the quarter the bunker prices increased from $55/60 per
ton to $70/75 per ton. This development reduces the earnings on
modern vessels by approximately $1,000 per day and on old turbine
tankers by approximately $3,000 per day, and should thereby
further increase the likelihood of increased scrapping.
The Suezmax market remained stable throughout the first quarter.
So far in the second quarter rates have shown negative
development. Increased competition from VLCCs, especially in the
West African market, have been one of the main reasons for this
development. A total of 4 Suezmaxes were delivered and 4 were
scrapped in the first quarter of 1999.
Ship values and newbuilding prices showed some further weakness
in 1999, but a stronger buying interest, especially for
secondhand tonnage, is starting to give support to the market.
The fall in newbuilding prices is moderated by a stronger Won.
CORPORATE AND OTHER MATTERS
In January 1999, Frontline took delivery of the third VLCC C-
Class newbuilding, the Front Chief. The final two VLCC C-Class
newbuildings will be delivered in the second or third quarter of
1999. Ordinary bank financing for the fourth vessel has been
secured and proposals received for the financing of the fifth and
final VLCC newbuilding. In order to optimise Frontline's
financing the Board is also evaluating two different kind of
lease structures for the remaining two VLCCs.
On May 4, 1999, ICB Shipping held a Shareholder Meeting at which
the Special Investigator appointed by ICB's Shareholder Meeting
on November 25, 1997 presented a preliminary report of his
investigation. The report concludes that the Board of Directors
of ICB had, on several occasions, wrongfully charged ICB with
expenses related to rejecting the takeover bid by Frontline. The
report further claimed that ICB's defensive efforts were in
breach of Swedish law. The Shareholder Meeting was adjourned
until June 29, 1999.
A delegation of Frontline's Board had, prior to the Shareholder
Meeting, met with a delegation of ICB's Board. The purpose was
to find a mutually acceptable solution to the ownership
situation. The tone in the meeting was open and fair. It was
agreed to work further with two specific alternatives.
Frontline's strategy is unchanged and is concentrated around a
consolidation of the two companies. The Board remain cautiously
optimistic about the likelihood of finding a solution to the on-
going deadlock, which will soon have lasted for two years.
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OUTLOOK
A combination of the cut in OPEC production and the maintenance
of Far East refineries has, as earlier stated, put tanker rates
under severe pressure during the second quarter. This
development will be directly reflected in the Company's second
quarter results. The dividend payable from ICB will reduce this
loss. This dividend was recorded in May.
It is likely that tanker rates this summer will improve from the
current low levels. OPEC's production strategy and the degree of
scrapping for the rest of the year will, to a large extent,
decide the development. As an overall view, the Board
anticipates that the TCE earnings for 1999 will be significantly
weaker than the similar numbers for 1998.
The ongoing cost cutting programme "Sharp Knife" has so far
targeted cost savings in excess of $500 per ship per day. An
implementation of the programme, including targeting of potential
further savings, is currently in process.
May 28, 1999
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to:
Contact: Tor Olav Troim: Director
+47 23 11 40 00
Tom E. Jebsen: CFO Frontline Management A.S.
+47 23 11 40 00
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FRONTLINE GROUP FIRST QUARTER REPORT (UNAUDITED)
INCOME STATEMENT
($1,000)
1999 1998 1998
JAN-MAR JAN-MAR JAN-DEC
Freight revenues 69,372 70,360 270,405
Voyage expenses -16,645 -17,664 -66,545
NET OPERATING REVENUES 52,727 52,696 203,860
Gain (loss) from sale of vessels 207 0 -1,514
Ship operating expenses -15,275 -14,338 -55,586
Charterhire expenses -7,293 -3,767 -14,889
Administrative expenses -1,762 -1,646 -7,757
OPERATING PROFIT BEFORE DEPRECIATION 28,604 32,945 124,114
Depreciation -13,849 -11,664 -51,659
OPERATING PROFIT AFTER DEPRECIATION 14,755 21,281 72,455
Interest income 564 1,018 2,998
Interest expense -15,103 -14,613 -59,320
Dividends005,324
Results from associated companies 482 1,056 2,807
Other financial items -548 391 2,765
INCOME BEFORE TAXES 150 9,133 27,029
Taxes 0 -5 -30
NET INCOME AFTER TAX 150 9,128 26,999
EARNINGS PER SHARE ($) 0.00 0.20 0.59
INCOME ON TIMECHARTER BASIS
($ PER DAY PER SHIP)*
VLCC 29,100 29,500 31,800
Suezmax 20,400 26,100 22,400
Suezmax OBO 20,600 26,900 21,800
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* Basis = Calendar days minus off-hire.
Figures after deduction of broker commission
BALANCE SHEET
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($1,000)
1999 1998 1998
MAR 31 MAR 31 DEC 31
ASSETS
Short term
Cash and bank deposits 64,408 71,872 75,950
Marketable securities 79,219 158,440 110,157
Other current assets 36,309 34,426 30,439
Long termNewbuildings 58,466 59,107 75,499
Vessel and equipment, net 1,147,725 959,232 1,078,956
Associated companies 1,834 3,576 3,837
Deferred charges and other assets 4,822 4,807 4,683
TOTAL ASSETS 1,392,783 1,291,460 1,379,521
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest bearing debt 159,684 235,065 170,551
Other current liabilities 25,759 41,086 27,952
Long termLong term interest bearing debt 767,437 503,718 712,470
Other long term liabilities 13,490 12,178 10,867
Stockholders' equity 426,413 499,413 457,681
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,392,783 1,291,460 1,379,521
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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 authorised.
Frontline Ltd.
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(Registrant)
Date June 1, 1999 By /s/ Kate Blankenship
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Kate Blankenship
Secretary
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02089006.AA4
