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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 August, 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 an Announcement of Frontline
Ltd. (the "Company") filed with the Oslo Stock Exchange on
August 22, 2000.
Attached as Exhibit 2 is a copy of the press release of the
Company, dated August 21, 2000.
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Exhibit 1
FRO: INTERIM RESULTS
(in thousands of $, except Earnings per share)
2000 1999 2000 1999
Apr-Jun Apr-Jun Jan-Jun Jan-Jun
Operating revenue 108,95 159,385 178,559 142,641
Operating expenses 32,703 32,736 61,859 69,288
Operating income before
depreciation 76,248 26,649 116,700 73,353
Operating income after
depreciation 55,207 2,985 75,970 26,009
Share of results from
associated companies 1,374 818 2,067 1,300
Net financial items (21,914) (17,528) (42,356) (33,015)
Net income (loss) before
tax and minority 34,667 (13,725) 35,681 (5,706)
Tax and minority - 258 - (3,446)
Net income (loss) after
tax and minority 34,667 (13,467) 35,68 1(9,152)
Earnings per share 0.49 (0.29) 0.53 (0.20)
Fixed assets 1,838,301 1,765,233 1,838,301 1,765,233
Current assets 213,256 266,349 213,256 266,349
Total assets 2,051,557 2,031,582 2,051,557 2,031,582
Stockholders' equity 757,859 571,094 757,859 571,094
Long term liabilities 1,116,048 1,199,523 1,116,048 1,199,523
Current liabilities 177,650 260,965 177,650 260,965
Frontline reports net income of $34.7 million in the second
quarter of 2000. This compares with a loss of $13.5 million in
the second quarter of 1999. This result reflects the strong
improvement in the tanker market that started in the first
quarter of 2000 and continues to date. Earnings before interest,
tax, depreciation, and amortisation (EBITDA) for the quarter,
including earnings from associated companies were $77.6 million,
compared with $27.5 million for the 1999 period. The average
daily time charter equivalents ("TCEs") earned by the VLCCs,
Suezmax tankers, and Suezmax OBO carriers were $36,100, $27,700
and $26,800, respectively, (1999 - $17,800, $17,000 and $16,800,
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 second 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 increased primarily due to the operation of the
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Tankers International Pool, with costs of approximately $700,000
recognised in the second quarter. This quarter was the first full
quarter during which the Company's VLCCs operated in the Tankers
International Pool.
Net other expenses for the quarter were $21.9 million (1999 -
$17.5 million) as the average debt level increased with fleet
expansion.
Basic earnings per share for the quarter were $0.49, (1999 - loss
of $0.29). Cashflow per share for the quarter was $0.78, compared
with $0.22 for the same quarter in 1999.
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Exhibit 2
Frontline Ltd. Bermuda
Interim Report April - June 2000
Frontline reports Second Quarter EBITDA of $77.6 million and net
income of $34.7 million.
The tanker market soared in the second quarter and is currently
at levels not experienced since the 1970's.
Frontline adds 3 VLCCs and 1 Suezmax to its fleet in the second
quarter through acquisitions and newbuilding deliveries.
Bankruptcy court approval obtained for Frontline's disclosure
statement for restructuring of Golden Ocean and Frontline's
restructuring plan recommended by Golden Ocean and by the
official Creditors Committee.
Fundamentals point towards a continued healthy market and strong
earnings.
Frontline expects doubling of net income in third quarter
compared to second quarter.
SECOND QUARTER AND SIX MONTH RESULTS
The Board of Frontline is pleased to report net income of $34.7
million in the second quarter of 2000. This compares with a loss
of $13.5 million in the second quarter of 1999. This result
reflects the strong improvement in the tanker market that started
in the first quarter of 2000 and continues to date. Earnings
before interest, tax, depreciation, and amortisation (EBITDA) for
the quarter, including earnings from associated companies were
$77.6 million, compared with $27.5 million for the 1999 period.
The average daily time charter equivalents ("TCEs") earned by the
VLCCs, Suezmax tankers, and Suezmax OBO carriers were $36,100,
$27,700 and $26,800, respectively, (1999 - $17,800, $17,000 and
$16,800, 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 second 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 increased primarily due to the operation of the
Tankers International Pool, with costs of approximately $700,000
included in the second quarter. This quarter was the first full
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quarter during which the Company's VLCCs operated in the Tankers
International Pool.
Net other expenses for the quarter were $21.9 million (1999 -
$17.5 million) as the average debt level increased with fleet
expansion.
Basic earnings per share for the quarter were $0.49, (1999 - loss
of $0.29). A total of 9,957,500 ordinary shares were issued
during the second quarter of 2000 as a result of the various
transactions discussed below, resulting in 78,769,360 shares
outstanding at June 30, 2000 and a weighted average number of
shares outstanding for the quarter of 71,434,745 (as at June 30,
1999 and for the quarter then ended - 46,106,860). Cashflow per
share for the quarter was $0.78, compared with $0.22 for the same
quarter in 1999.
For the first six months of 2000, the Company incurred net income
of $35.7 million (1999 - net loss of $9.2 million) and EBITDA of
$118.8 million (1999 - $74.7 million). The average daily TCEs
earned by the VLCCs, Suezmax tankers, and Suezmax OBO carriers
were $29,000, $24,300 and $22,800 respectively, compared with
$22,600, $18,700 and $18,700 in the first six months of 1999.
Net other expenses for the first half of 2000 were $42.4 million
(1999 - $33.0 million). Earnings per share for the 2000 year to
date were $0.53 (1999 - loss of $0.20) and cashflow per share was
$1.13 (1999 - $0.83).
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 continued to improve in the second quarter.
After stable rates around USD 30-35,000 per day for the VLCC
market and USD 25-30,000 per day for Suezmax in most of the
quarter, rates improved significantly by the end of the quarter.
After a weak 1999, the tanker fleet had reduced slightly through
scrapping of older vessels and slow newbuilding deliveries. As
transportation demand picked up in 2000 as a result of OPEC's
increase in production, the balances swung in favour of tanker
owners and charter rates improved steeply. The trend from the
second quarter has continued into the current quarter. Second-
hand values and newbuilding prices have improved through the year
and the trend continues. In the first six months of this year 19
VLCCs and 13 Suezmaxes were scrapped. 22 VLCCs and 14 Suezmaxes
were delivered from shipyards in the same period.
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CORPORATE AND OTHER MATTERS
On April 12, 2000, Frontline took delivery of the Front Sun, the
fifth and final Suezmax newbuilding in the Company's current
program. On May 23, 2000 and June 14, 2000, Frontline took
delivery of the 1993-built VLCCs, Front Tartar and Front Tarim,
respectively, pursuant to the previously announced agreement with
Wilh. Wilhelmsen ASA. A total of 2,975,000 ordinary shares of
Frontline were issued at NOK 80.00 each for the acquisition of
these vessels. Both vessels have been entered into the Tankers
International Pool.
On June 1, 2000 the Company took delivery of the ex-Golden Ocean
newbuilding VLCC, Front Tina. The acquisition of the Front Tina
was part-financed by a Private Placement to institutional
investors of 3,000,000 ordinary shares at $10.20 per share that
was completed on May 25, 2000.
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. The vessels will be taken over by
Frontline in September 2000.
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 will be used to part finance the
acquisition of the Ardenne and Brabant.
During the second quarter and through July, 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 proposal for restructuring will
now be distributed to the bondholders for voting. Frontline has
through its own bond position and through a lock-up agreement
already secured support from two thirds of the unsecured claims.
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 final confirmation hearing for the
restructuring plan is scheduled to be held in Wilmington on
September 15, 2000. A full take-over of Golden Ocean would
increase Frontline's controlled fleet to 29 VLCCs and 28
Suezmaxes, and would add 10 modern bulkcarriers to the fleet.
OUTLOOK
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The fundamentals for the tanker market are encouraging. Oil
demand is strong, on the back of favourable economic development
in important consumption areas. Incremental oil supply will come
out of the Middle East Gulf area where most of the world's spare
production capacity is located - Increased Middle East Gulf
production favours tanker owners through long transport
distances. The global order book for delivery of tankers this
year and the following years is modest compared with requirement
for replacement of tankers coming to the end of their service
life due to age and tightening regulations. The risk for over-
ordering is limited in the near term. Vessels ordered today will
only get delivered in two years time or later. Continued strong
demand for oil transportation will keep tanker utilisation rates
high. In the third quarter to date, daily TCE rates for
Frontline's VLCCs and Suezmaxes have averaged approximately USD
44,000 and USD 40,000 respectively. Based on the earnings
achieved so far in the third quarter the Board is confident that
net income for the third quarter will show an improvement of more
than 100 per cent compared to the second quarter.
August 21, 2000
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to:
Contact: Tor Olav Troim: Director
+47 23 11 40 00
Ola Lorentzon, Managing Director,
Frontline Management AS
+47 23 11 40 00
Tom E. Jebsen: CFO Frontline Management AS
+47 23 11 40 00
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FRONTLINE GROUP UNAUDITED SECOND QUARTER REPORT
1999 2000 INCOME STATEMENT 2000 1999 1999
Apr-June Apr-June (in thousands of $) Jan-Jun Jan-Jun Jan-Dec
(restated) (restated) (audited)
85,004 133,681 Freight revenues 228,336 199,445 369,876
(25,619) (24,730) Voyage expenses (50,240) (57,011) (116,662)
59,385 108,951 Net operating revenues 178,096 142,434 253,214
- - Gain (loss) from sale of
assets 463 207 (37,779)
22,393 21,245 Ship operating expenses 40,017 46,807 92,708
7,669 8,453 Charterhire expenses 16,634 17,245 31,719
2,674 3,005 Administrative expenses 5,208 5,236 11,783
26,649 76,248 Operating income before
depreciation and
amortisation 116,700 73,353 79,225
23,664 21,041 Depreciation and
amortisation 40,730 47,344 91,435
2,985 55,207 Operating income (loss)
after depreciation and
amortisation 75,970 26,009 (12,210)
1,754 804 Interest income 1,501 3,618 7,561
(20,573) (23,131) Interest expense (43,835) (41,276) (88,728)
818 1,374 Share of results from
associated companies 2,067 1,300 3,067
1,291 413 Other financial items (22) 4,643 (840)
(13,725) 34,667 Income (loss) before taxes
and minority interest 35,681 (5,706) (91,150)
158 - Minority interest - (3,446) 4,245
(100) - Taxes - - (9)
(13,467) 34,667 Net income (loss) 35,681 (9,152) (86,896)
(0.29) 0.49 Earnings (loss) per Share ($)0.53 (0.20) (1.76)
Income on timecharter basis ($ per day per ship)*
17,800 36,100 VLCC 29,000 22,600 20,000
17,000 27,700 Suezmax 24,300 18,700 16,700
16,800 26,800 Suezmax OBO 22,800 18,700 16,800
* Basis = Calendar days minus off-hire. Figures after deduction of broker
commission
BALANCE SHEET
(in thousands of $)
2000 1999 1999
Jan-Jun Jan-Jun Jan-Dec
(restated) (audited)
ASSETS
Short term
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Cash and bank deposits 106,939 178,554 66,267
Marketable securities 17,116 24,000 10,867
Other current assets 89,201 63,795 60,613
Long term
Newbuildings - 60,401 32,777
Vessel and equipment, net 1,800,842 1,687,692 1,523,112
Investment in associated companies 6,783 2,163 16,274
Goodwill 11,857 1,491 12,203
Deferred charges and other long-term assets 18,819 13,486 4,860
Total assets 2,051,557 2,031,582 1,726,793
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest bearing debt 131,379 56,140 116,814
Other current liabilities 46,271 204,825 52,398
Long term
Long term interest bearing debt 1,091,065 1,079,043 962,880
Other long term liabilities 20,611 14,656 18,450
Minority interest 4,372 105,824 18,951
Stockholders' equity 757,859 571,094 557,300
Total liabilities and stockholders' equity 2,051,557 2,031,582 1,726,793
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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 August 22, 2000 By /s/ Kate Blankenship
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Kate Blankenship
Company Secretary
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02089009.AB8
