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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 November, 2000
Frontline Ltd.
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(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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Item 1. 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 November 7, 2000.
Attached as Exhibit II is a copy of an announcement by the
Company dated November 7, 2000.
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Exhibit I
FRO: INTERIM RESULTS
(in thousands of $, except Earnings per share)
2000 1999 2000 1999
JUL-SEP JUL-SEP JAN-SEP JAN-SEP
Operating revenue 174,156 57,166 352,252 199,600
Gain (loss) on sale of assets - (37,986) 463 (37,779)
Operating expenses 34,685 34,777 96,544 104,065
Operating income (loss)
before depreciation 139,471 (15,597) 256,171 57,756
Operating income (loss)
after depreciation 117,128 (39,699) 193,098 (13,690)
Share of results from
associated companies 1,868 656 3,935 1,956
Net financial items (22,013) (27,854) (64,369) (60,869)
Net income (loss) before tax
and minority 96,983 (66,897) 132,664 (72,603)
Tax and minority - 7,704 - 4,258
Net income (loss) after
tax and minority 96,983 (59,193) 132,664 (68,345)
Earnings (loss) per share 1.23 (1.28) 1.86 (1.48)
Fixed assets 1,817,656 1,642,076 1,817,656 1,642,076
Current assets 274,399 282,079 274,399 282,079
Total assets 2,092,055 1,924,155 2,092,055 1,924,155
Stockholders' equity 852,621 571,263 852,621 571,263
Long term liabilities 1,046,092 1,051,734 1,046,092 1,051,734
Current liabilities 193,342 301,158 193,342 301,158
Frontline reports net income of $97.0 million in the third
quarter of 2000. This represents a 180 per cent increase over the
immediately preceding quarter. Earnings before interest, tax,
depreciation, and amortisation (EBITDA) for the quarter,
including earnings from associated companies were $141.3 million,
compared with a loss of $14.9 million for the comparable 1999
period. Basic earnings per share for the quarter were $1.23 (1999
- loss of $1.28). Cashflow per share for the quarter was $1.51,
compared with $(0.76) for the same quarter in 1999. This result
reflects the strong tanker market that prevailed throughout the
third quarter of 2000. In the third quarter of 1999, in addition
to the market being very significantly weaker, the restated
results include the loss on the sale of four VLCCs in the
transaction to take control of ICB Shipping AB ("ICB").
The average daily time charter equivalents ("TCEs") earned by the
VLCCs, Suezmax tankers, and Suezmax OBO carriers were $52,000,
$41,100 and $41,200, respectively, (1999 - $19,400, $14,100 and
$15,300, respectively). Administrative expenses have decreased
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due to the inclusion of costs associated with the operation of
ICB in the 1999 quarter.
Net interest expenses for the quarter were $22.0 million (1999 -
$22.5 million). This has decreased from $22.3 million the second
quarter of 2000. There was no new debt drawndown in the third
quarter and a total of $58 million debt was repaid. Interest has
been incurred for a full quarter on the new vessel debt drawndown
in the second quarter, offsetting the reduction from debt repaid.
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FRONTLINE LTD. BERMUDA
INTERIM REPORT JULY - SEPTEMBER 2000
-- Frontline reports Third Quarter EBITDA of $141.3 million and
net income of $97.0 million.
-- The tanker market remained strong throughout the third
quarter.
-- Fundamentals point towards a continued healthy market and
strong earnings.
-- Frontline's Plan of Reorganisation for Golden Ocean is
confirmed by the Bankruptcy Court during the third quarter
and is declared effective in early October.
THIRD QUARTER AND NINE MONTH RESULTS
The Board of Frontline is pleased to report a record net income
of $97.0 million in the third quarter of 2000: the best quarterly
result ever announced by the Company. This represents a 180 per
cent increase over the immediately preceding quarter. Earnings
before interest, tax, depreciation, and amortisation (EBITDA) for
the quarter, including earnings from associated companies were
$141.3 million, compared with a loss of $14.9 million for the
comparable 1999 period. Basic earnings per share for the quarter
were $1.23 (1999 - loss of $1.28). Cashflow per share for the
quarter was $1.51, compared with $(0.76) for the same quarter in
1999. This result reflects the strong tanker market that
prevailed throughout the third quarter of 2000. In the third
quarter of 1999, in addition to the market being very
significantly weaker, the restated results include the loss on
the sale of four VLCCs in the transaction to take control of ICB
Shipping AB ("ICB").
The average daily time charter equivalents ("TCEs") earned by the
VLCCs, Suezmax tankers, and Suezmax OBO carriers were $52,000,
$41,100 and $41,200, respectively, (1999 - $19,400, $14,100 and
$15,300, respectively). Total operating costs have decreased as
the successful implementation of a cost reduction program is
recognised over the increased fleet. Depreciation expense has
decreased due to inclusion in the third quarter of 1999 of four
VLCCs in the ICB fleet which were sold in the latter part of
1999, combined with the fact that these VLCCs, plus the other
eight vessels in the ICB fleet, were being depreciated over a
twenty year expected life. This was amended to twenty five years
with effect from the fourth quarter of 1999. Administrative
expenses have decreased due to the inclusion of costs associated
with the operation of ICB in the 1999 quarter. Administrative
expenses in the third quarter of 2000 include approximately
$500,000 relating to the Tankers International Pool and a further
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$300,000 relating to social costs arising from the employee share
option plans.
Net interest expenses for the quarter were $22.0 million (1999 -
$22.5 million). This has decreased from $22.3 million the second
quarter of 2000. There was no new debt drawndown in the third
quarter and a total of $58 million of debt was repaid. Interest
has been incurred for a full quarter on the new vessel debt
drawndown in the second quarter, offsetting the reduction from
debt repaid.
During the third quarter, the Company issued 68,700 ordinary
shares to acquire Golden Ocean Senior Notes and 129,635 shares
were issued on the exercise of warrants to acquire the Company's
shares. The Company acquired and cancelled 430,000 of its own
shares pursuant to a call option. At September 30, 2000,
78,537,524 ordinary shares were outstanding and the weighted
average number of shares outstanding for the quarter was
78,804,371 (as at September 30, 1999, 59,051,860 and for the
quarter then ended - 46,247,567).
For the first nine months of 2000, the Company earned net income
of $132.7 million (1999 - net loss of $68.3 million) and EBITDA
of $260.1 million (1999 - $59.7 million).
Net interest expense was $64.3 million (1999 - $60.1 million).
Earnings per share for the 2000 year to date are $1.86 (1999 -
loss of $1.48) and cashflow per share was $2.74 (1999 - $0.07).
The comparative results for the 1999 periods presented have been
restated to include the results of ICB Shipping AB on a
consolidated basis.
THE MARKET
The tanker market has showed increasing strength through the year
to date. A significant rate improvement towards the end of the
second quarter continued through the third quarter. Suezmax rates
dipped temporarily in August but recovered again in September. At
the end of the period Suezmaxes earned TCEs of over $50,000 per
day and VLCCs over $60,000 per day.
The prime driver has been the sharp increase in OPEC oil
production starting with the quota increase in April. The
increased production added to the effect of a supply and demand
balance created by scrapping of older tonnage in 1999 and the
first half of 2000 and to the tightening of age and quality
requirements imposed by charters after the Erika oil spill in
late 1999.
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The positive trend from the beginning of the year has continued
into the fourth quarter. Second-hand values and newbuilding
prices have continued to increase. In the first nine months of
the year 26 VLCCs and 16 Suezmaxes were scrapped. 34 VLCCs and 19
Suezmaxes were delivered from shipyards in the same period.
CORPORATE AND OTHER MATTERS
In June 2000, the Company entered into an agreement with Euronav
to acquire two Suezmax tankers, Ardenne and Brabant for a total
price of $95.0 million. On June 20, 2000, the Company issued
4,000,000 ordinary shares at a price of NOK 104.5 per share in a
private placement to a group of international institutional
investors. Part of the $48.5 million proceeds of the issue were
used to part finance the acquisition of the Ardenne and Brabant.
The balance of the price was paid by traditional bank financing.
The vessels, renamed Front Ardenne and Front Brabant, were taken
over by Frontline in October 2000.
In October 2000, Frontline also acquired a 1993-built VLCC, which
was named Front Ace and on delivery to the Company was placed in
the Tankers International Pool. This vessel was acquired for $53
million from a related party, such price being based on three
independent valuations less a $1 million discount. This
acquisition has been part-financed by traditional bank financing.
Throughout the third quarter, Frontline continued its attempts to
gain acceptance of its plan for the financial restructuring of
the Golden Ocean Group ("Golden Ocean"). On August 4, 2000 the
bankruptcy court in Wilmington, Delaware approved Frontline's
disclosure statement for restructuring of Golden Ocean.
Frontline's restructuring plan was also recommended to the court
by the debtor, Golden Ocean Group Ltd., and by the official
Creditors Committee. The Frontline Plan was distributed to the
bondholders for voting and on August 15, 2000, the bankruptcy
court approved a proposal to appoint Frontline as the manager of
Golden Ocean's operations with immediate effect. The Frontline
Plan was approved by creditors and confirmed by the Bankruptcy
Court on September 15, 2000. On October 10, 2000, all conditions
precedent were satisfied and Frontline declared the Plan
effective. This take-over of Golden Ocean increases Frontline's
controlled fleet to 30 VLCCs and 29 Suezmax tankers, and brings
10 modern bulkcarriers to the fleet.
OUTLOOK
The Board is pleased that the large financial and personnel
resources which have been invested in the build-up of Frontline
during the last four years now seems to pay off to the benefit of
our shareholders.
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Strong oil demand backed by favourable demand development in
important consumption areas continues to drive the tanker market.
In the absence of spare capacity in other areas, the additional
barrels will be produced in the Middle East with a consequential
increase in tonnage demand. The tanker order book for delivery
during the next two years is modest and no significant
newbuilding capacity is available before 2003. The new rules
proposed by the IMO for barring older tonnage from further
trading could cause the removal from the trading fleet of about a
third of currently existing Suezmaxes and VLCCs in the years 2002
through 2005.
In the fourth quarter Frontline has substantial capital
commitments linked to the payment for Golden Ocean. In addition
to the payment to the unsecured creditors and administrative
claimants, Frontline will also use liquidity to refinance some of
the existing mortgage debt in Golden Ocean. After the final
payment for Golden Ocean, Frontline presently has no significant
future capital expenditure commitments.
The Board is continuously evaluating opportunities to expand the
company further. A well priced equity is a major condition for
such a growth. Based on the price level indicated for sale of
modern tonnage it is the Board's view that the current share
price does not reflect a significant premium to the underlying
value of the assets. This clearly limits the economical basis for
growing the company through ship for share issues. In the event
the Board does not find what it considers to be attractive deals,
the Board will recommend to the shareholders that a significant
part of the free cash generated will be distributed to the
equityholders in the form of an organised tender buy-back program
or, alternatively, a dividend. The Board is encouraged by the
good share liquidity in the trading of Frontline shares on the
Oslo Stock Exchange. The limited trading of the ADR on the Nasdaq
National Market is, however, a concern. In order to improve the
trading in the U.S. the Board is currently considering an
application for listing of Frontline's ordinary shares on the New
York Stock Exchange.
Market factors governing the tanker industry look fundamentally
positive in a short and medium perspective. Tanker rates in the
first part of the fourth quarter point to an improvement over the
third quarter and the Board is confident that the net income for
the last quarter of the year will substantially exceed that of
the third quarter.
November 6, 2000
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
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Questions should be directed to:
Contact: Tor Olav Troim: Director
+47 23 11 40 00 or +47 90 68 82 67
Ola Lorentzon, Managing Director, Frontline
Management AS
+47 23 11 40 00 or +47 90 07 42 85
Tom E. Jebsen: CFO Frontline Management AS
+47 23 11 40 00
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FRONTLINE GROUP UNAUDITED THIRD QUARTER REPORT
1999 2000 INCOME STATEMENT 2000 1999 1999
Jul-Sep Jul-Sep (in thousands of $) Jan-Sep Jan-Sep Jan-Dec
(restated) (audited)
83,560 197,058 Freight revenues 425,394 283,005 369,876
(26,394) (22,902) Voyage expenses (73,142) (83,405) (116,662)
57,166 174,156 Net operating revenues 352,252 199,600 253,214
(37,986) - Gain (loss) from
sale of assets 463 (37,779) (37,779)
24,755 23,025 Ship operating expenses 63,042 71,562 92,708
6,636 8,385 Charterhire expenses 25,019 23,881 31,719
3,386 3,275 Administrative expenses 8,483 8,622 11,783
(15,597) 139,471 Operating income
(loss) before
depreciation and
amortisation 256,171 57,756 79,225
24,102 22,343 Depreciation and
amortisation 63,073 71,446 91,435
(39,699) 117,128 Operating income
(loss) after
depreciation and
amortisation 193,098 (13,690) (12,210)
1,490 2,223 Interest income 3,724 5,108 7,561
(23,957) (24,181) Interest expense (68,016) (65,233) (88,728)
656 1,868 Share of results
from associated
companies 3,935 1,956 3,067
(5,387) (55) Other financial items (77) (744) (840)
(66,897) 96,983 Income (loss) before
taxes and minority
interest 132,664 (72,603) (91,150)
7,704 - Minority interest - 4,258 4,245
- - Taxes - - (9)
(59,193) 96,983 Net income (loss) 132,664 (68,345) (86,896)
$(1.28) $1.23 Earnings (loss)
per Share ($) $1.86 $(1.48) $(1.76)
INCOME ON TIMECHARTER
BASIS
($ per day per ship)*
19,400 52,000 VLCC 37,700 21,400 20,000
14,100 41,100 Suezmax 30,200 17,100 16,700
15,300 41,200 Suezmax OBO 29,000 17,600 16,800
* Basis = Calendar days minus off-hire. Figures after deduction of broker
commission
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BALANCE SHEET
(in thousands of $) 2000 1999 1999
Sep 30 Sep 30 Dec 31
(restated) (audited)
ASSETS
Short term
Cash and bank deposits 136,807 204,765 66,267
Marketable securities 23,888 22,000 10,867
Other current assets 113,704 55,314 60,613
Long term
Newbuildings - 23,181 32,777
Vessel and equipment, net 1,778,857 1,594,814 1,523,112
Investment in associated
companies 8,651 1,858 16,274
Goodwill 11,782 11,566 12,203
Deferred charges and other
long-term assets 18,366 10,657 4,860
Total assets 2,092,055 1,924,155 1,726,793
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest
bearing debt 140,614 247,437 116,814
Other current liabilities 52,728 53,721 52,398
Long term
Long term interest
bearing debt 1,023,271 1,005,982 962,880
Other long term liabilities 18,449 16,233 18,450
Minority interest 4,372 29,519 18,951
Stockholders' equity 852,621 571,263 557,300
Total liabilities and
stockholders' equity 2,092,055 1,924,155 1,726,793
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Frontline Ltd
VESSEL MANAGER FLAG BUILT DWT YARD
SUEZMAX TANKERS
Polytrader (40%) Rasmussen MS NOR 1978 126,000 Uddevalla
Polytraveller
(35%) Rasmussen MS NOR 1979 126,000 Uddevalla
Front Birch Acomarit NIS 1991 152,000 Daewoo
Front Maple Acomarit NIS 1991 152,000 Daewoo
Granite Wallem BS 1991 142,000 Split
Lillo ITM LIB 1991 147,253 AESA
Front Emperor Acomarit SING 1992 147,273 AESA
Front Sunda Wallem NIS 1992 142,000 Split
*Marble (0%) Wallem BS 1992 142,000 Split
Front Comor Wallem NIS 1993 142,000 Split
Front Spirit Acomarit NIS 1993 147,273 AESA
Front Pride Acomarit NIS 1993 149,686 Mitsui
Front Splendour Acomarit NIS 1995 149,745 Mitsui
Front Glory Acomarit NIS 1995 149,834 Mitsui
Front Ardenne V.Ships NIS 1997 153,000 Hyundai
Front Brabant V.Ships NIS 1998 153,000 Hyundai
Front Fighter V.Ships NIS 1998 153,328 Hyundai
Front Hunter V.Ships NIS 1998 153,344 Hyundai
Front Warrior Cardston/
V.Ships BS 1998 153,409 Hyundai
Kim Jacob (T/C) V.Ships SING 1998 158,000 Daewoo
Mindanao V.Ships SING 1998 158,000 Daewoo
Front Sky V.Ships BS 2000 159,999 Hyundai
Front Archer Farsund NIS 2000 152,980 Hyundai
Front Sun V.Ships NIS 2000 159,998 Hyundai
*Sonangol
Girassol (0%) Wallem BS 2000 158,000 Daewoo
*Sonangol
Luanda (0%) Wallem BS 2000 158,000 Daewoo
*Hull No. 5154 (0%) Wallem BS 2001 158,000 Daewoo
SUEZMAX OBOS
Front Breaker ITM NIS 1991 169,177 Daewoo
Front Climber Acomarit SING 1991 169,178 Hyundai
Front Driver Acomarit NIS 1991 169,177 Hyundai
Front Guider Acomarit SING 1991 169,142 Daewoo
Front Leader Acomarit SING 1991 169,381 Daewoo
Front Rider Acomarit SING 1992 169,718 Hyundai
Front Striver Acomarit SING 1992 169,204 Daewoo
Front Viewer ITM SING 1992 169,381 Daewoo
VLCCs
Front Sabang Wallem SING 1990 285,000 Daewoo
Vanadis Wallem SING 1990 285,000 Daewoo
Front Highness Acomarit SING 1991 284,420 Hyundai
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Front Lady Acomarit SING 1991 284,420 Hyundai
Front Lord Acomarit SING 1991 284,420 Hyundai
Front Duke Acomarit SING 1992 284,420 Hyundai
Front Duchess Acomarit SING 1993 284,480 Hyundai
Front Ace Wallem LIB 1993 275,000 Hitachi
Front Tobago (40%) V.Ships LIB 1993 260,619 IHI
Front Tarim ITM LIB 1993 300,364 Hitachi
Front Tartar ITM LIB 1993 306,902 Sumitomo
Front Century Cardston/ITM BS 1998 311,189 Hyundai
Front Champion Cardston/ITM BS 1998 311,286 Hyundai
Front Chief ITM BS 1999 311,224 Hyundai
Front Commander Acomarit BS 1999 311,168 Hyundai
Front Crown Acomarit BS 1999 311,176 Hyundai
Front Tina V.Ships LIB 2000 298,500 Kawasaki
* Vessels commercially managed by Frontline Management AS
** Ownership transfer to Frontline to take place in September 2000
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GOLDEN OCEAN
VESSEL MANAGER FLAG BUILT DWT YARD
Drybulk
Golden Protea Wallem PH 1998 45,725 Tsuneishi
Golden Aloe Wallem PH 1998 45,726 Tsuneishi
Cos Hero Cosco (b/b) PH 1999 47,725 Tsuneishi
Golden Daisy (50%) Samartzis PH 1998 47,183 Oshima
Golden Rose (50%) Samartzis PH 1998 47,183 Oshima
Golden Disa Wallem PH 1999 75,462 Hitachi
Golden Nerina Wallem PH 1999 75,484 Hitachi
Channel Alliance Wallem PH 1996 171,978 NKK
Channel Navigator Wallem PH 1997 172,058 NKK
Channel Poterne Wallem PH 1997 172,091 NKK
VLCCs
Golden Stream Thome PA 1995 275,616 Hitachi
Golden
Fountain (50%) Thome PA 1995 301,665 Hitachi
Navix Astral Sammy (b/b) PA 1996 275,644 Hitachi
New Vanguard Ming Wah (b/b) HK 1998 300,058 Hitachi
New Vista Ming Wah (b/b) HK 1998 300,149 Hitachi
Golden Victory Thome PA 1999 305,155 Hitachi
New Circassia (50%) Euronav (b/b) PA 1999 306,009 MHI
Pacific Lagoon (45%) Thome PA 1999 305,839 MHI
Opalia Shell (b/b) IoM 1999 302,193 KHI
Stena Commerce Stena PA 1999 300,144 Hitachi
Stena Comanche Stena PA 1999 300,133 Hitachi
Stena Commodore Stena BER 2000 298,620 Hitachi
Oscilla Shell (b/b) IoM 2000 302,193 KHI
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Exhibit II
Presentation to Lazard November 7, 2000
Frontline will hold a presentation at Lazard in New York today.
The presentation is available on the following link:
http://report.huginonline.com/796557/84366.pdf
Tom E. Jebsen
CFO - Frontline Management AS
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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 November 7, 2000
By /s/ Kate Blankenship
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Kate Blankenship
Secretary
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02089009.AC6
