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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 , 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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FRO: INTERIM RESULTS
(in thousands of $, except Earnings per share)
2000 1999
Jan-Mar Jan-Mar
Operating revenue 69,608 83,256
Operating expenses 29,156 36,552
Operating profit before depreciation 40,452 46,704
Operating profit after depreciation 20,763 23,024
Net financial items 19,749 15,005
Net income (loss) before tax and minority 1,014 8,019
Tax and minority - 3,704
Net income (loss) after tax and minority 1,014 4,315
Earnings per share 0.02 0.09
Fixed assets 1,637,229 1,811,977
Current assets 161,380 286,717
Total assets 1,798,609 2,098,694
Stockholders' equity 617,227 583,798
Long term liabilities 981,460 1,269,453
Current liabilities 199,922 245,443
Frontline reports net income of $1.0 million for the first
quarter of 2000 (1999 quarter: net income of $4.3 million).
Earnings per share for the quarter were $0.02, (1999 quarter:
$0.09). Earnings before interest, tax, depreciation and
amortisation (EBITDA) for the quarter, including earnings from
associated companies were $41.1 million (1999 quarter: $47.2
million). This was an improvement of $18.5 million compared to
the fourth quarter 1999 when the EBITDA was $22.6 million. The
average daily time charter equivalents ("TCEs") earned by the
VLCCs, Suezmax tankers, and Suezmax OBO carriers were $21,300,
$20,300 and $18,900, respectively, (1999 quarter: $29,700,
$21,100 and $20,600, respectively).
Net other expenses for the quarter were $20.4 million (1999
quarter: $15.5 million). Interest expense is unchanged from the
first quarter of 1999; the repayment of debt associated with the
acquisition of ICB has been offset by the drawdown of additional
debt associated with the further expansion of the fleet
throughout 1999 and the first quarter of 2000.
Frontline Ltd. Bermuda
Interim Report January - March 2000
- The tanker market turned in the first quarter 2000 and is
showing increasing strength.
- Frontline adds 4 VLCCs and 3 Suezmaxes to the fleet through
acquisitions and newbuilding deliveries.
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- Agreement signed for the restructuring of Golden Ocean with
the aim to consolidate Golden Ocean's 14 VLCCs.
- Fundamentals point towards a continued healthy market and
strong earnings improvement in the second quarter.
- Frontline strives for further tanker market consolidation.
Frontline reports net income of $1.0 million for the first
quarter of 2000, compared with net income of $4.3 million for the
first quarter of 1999. Earnings before interest, tax,
depreciation and amortisation (EBITDA) for the quarter, including
earnings from associated companies were $41.1 million (1999
quarter: $47.2 million). The average daily time charter
equivalents ("TCEs") earned by the VLCCs, Suezmax tankers, and
Suezmax OBO carriers were $21,300, $20,300 and $18,900,
respectively, (1999 quarter: $29,700, $21,100 and $20,600,
respectively). The reduction in freight revenues, operating
costs, charterhire expenses and depreciation compared with the
first quarter of 1999 are due to the inclusion in the first
quarter of 1999 of four VLCCs in the ICB fleet which were sold in
the latter part of 1999.
Net other expenses for the quarter were $20.4 million (1999
quarter: $15.5 million). Interest expense is unchanged from the
first quarter of 1999; the repayment of debt associated with the
acquisition of ICB has been offset by the drawdown of additional
debt associated with the further expansion of the fleet
throughout 1999 and the first quarter of 2000. Approximately 45%
of Frontline's debt has been hedged through interest swaps with
maturity of more than one year.
Earnings per share for the quarter were $0.02, (1999 quarter:
$0.09). On February 25, 2000, the Company issued a total of
7,850,000 shares in two capital transactions discussed below,
resulting in 68,811,860 shares outstanding at March 31, 2000 and
a weighted average number of shares outstanding for the quarter
of 63,981,091 (as at March 31, 1999 and for the quarter then
ended: 46,106,860). Cashflow per share for the quarter was $0.32,
compared with $0.61 for the same quarter in 1999.
The comparative results for the quarter ended March 31, 1999 have
been restated to include the results of ICB Shipping AB on a
consolidated basis.
THE MARKET
The first quarter of the year was affected by OPEC's quota cuts,
which were maintained until the OPEC meeting on March 25 when it
was decided to increase production by approximately 1.7 million
barrels per day.
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Suezmax rates, in spite of the quota cuts, started to pick up in
the last weeks of 1999, rising from about $15,000 per day to a
level in excess of $20,000 per day. Relatively healthy rates for
Suezmaxes were maintained, with some variations, throughout the
quarter. The rates were supported by market reaction after the
sinking of the 23 year old tanker Erika in December 1999. This
incident caused major European charterers to impose stricter
chartering standards that have generally excluded older Suezmax
tankers from the Mediterranean and Atlantic trades. Suezmax rates
have improved further in the second quarter and ships are
currently fixed just below $30,000 per day.
The VLCC rates lagged behind Suezmax rates and stayed just over
$20,000 per day, increasing slightly through the quarter. Only
after the quota increase in March did the market pick up but from
then on the development has been very strong. Currently the rates
are above $40,000 per day in all major VLCC trade lanes, with
single fixtures yielding over $50,000 per day. The growing number
of backhaul cargoes from West Africa to the Far East has
increased average earnings for VLCCs through reduction of
ballasting time. This has particularly benefited the Tankers
International pool, which has sufficient market presence to take
full advantage of the backhaul trading possibilities.
14 VLCCs and 8 Suezmaxes were scrapped in the first quarter
equalling the number of newbuilding VLCCs and Suezmaxes delivered
from shipyards. Shipyards booked new orders for 13 VLCCs and 10
Suezmaxes in the period. The positive development in newbuilding
prices and secondhand prices experienced in the second half of
1999 have continued into 2000.
CORPORATE AND OTHER MATTERS
In February 2000 Frontline took delivery of the Front Sky and the
Front Archer and in April the Company took delivery of the Front
Sun, the final Suezmax newbuildings in the Company's current
program. All vessels have been financed by traditional bank
financing.
In February 2000, the Company issued 3,500,000 ordinary shares at
NOK 57.50 per share in a Private Placement to institutional
investors. At the same time, $30 million of the Metrogas Loan was
converted to equity, resulting in the issuance of 4,350,000
ordinary shares at an issue price of NOK 57.50 per share.
Metrogas offered 2,000,000 of the shares to certain existing
shareholders of the Company by means of a Secondary Offering.
In March 2000, Frontline entered into a joint venture with
Euronav Luxembourg SA and Overseas Shipholding Group Inc. to
acquire the 1993 built VLCC M/T Toba. Frontline has taken a 40
per cent interest in the vessel, which, once acquired on March 9,
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2000, was renamed M/T Front Tobago and entered into the Tankers
VLCC pool.
Also in March, 2000 Frontline entered into an agreement with
Wilh. Wilhelmsen ASA to buy the two 1993-built VLCCs, M/T Tartar
and M/T Tarim. The agreed purchase price of $45 million per ship
will be paid by $62 million in cash and through the issuance of
2,957,500 Frontline shares at a price of NOK 80.00 per share. The
first vessel was delivered to Frontline on May 23, 2000 and
entered into the Tankers pool. The second vessel will be taken
over by Frontline in June 2000 and will also be entered into the
Tankers pool.
On May 25, 2000 Frontline signed a term sheet with the Golden
Ocean Group Limited ("Golden Ocean"), under which the parties
have agreed to propose a joint plan for a financial restructuring
of Golden Ocean. Golden Ocean holds interest in 14 VLCCs and 10
bulk carriers and filed for a Chapter 11 restructuring in the
Bankruptcy Court for the District of Delaware on January 14,
2000. Frontline has committed to pay up to $33.0 million in cash,
or to issue up to 4.1 million shares and 1.9 million warrants in
Frontline valued to $48.4 million to take over all unsecured debt
and all upstream guarantees.
On May 25, 2000 the Company issued 3,000,000 ordinary shares at
$10.15 per share in a Private Placement to institutional
investors. The proceeds of this issue will be used to part
finance the acquisition of an ex-Golden Ocean newbuilding VLCC to
be named M/T Front Tina, which is scheduled to be delivered to
the Company on June 1, 2000. Total number of shares outstanding
after completion of the private placement and the Tarim/Tartar
transaction will be 74,769,360.
The Board wants to assure shareholders that Frontline will
continue its work for consolidation in the tanker market. As a
market leader in the industry, it is Frontline's responsibility
to evaluate structures, which can increase the financial return
in the industry and thereby generate an improved return to our
shareholders. In addition to growing Frontline through
acquisitions and mergers, it is of major importance to increase
the number of owners who participate in the VLCC and Suezmax
Pools (Tankers International and Alliance). Through larger pools
we will be able to increase the trading flexibility, reduce the
ballast voyages, and improve the cost structure further.
OUTLOOK
The balance between supply and demand has developed in tanker
owners' favour at the start of the year 2000. The March increase
in the OPEC production quota generated growing demand for oil
transportation. Expectations are for a further increase in oil
production throughout the year, driven by favourable development
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in most major economies. Scrapping of vessels in 1999 contributed
to an improved balance as did the restrictions imposed on older
tonnage, particularly after the tanker Erika incident.
Going forward, the current order book of approximately 15 % of
the total fleet does not cause a threat to market balance
compared with the estimates for gradually increasing oil
production and the current age profile of the tanker fleet. The
Board supports the research which indicates that global oil
demand will absorb another 1.0 million barrels increase in OPEC
production in the second half of this year, plus another 1.5
million barrels next year. Combined with a modest delivery
schedule for VLCCs during the next 18 months, it is likely that
the positive development in the freight market as well as in the
asset values will continue. Due to the current tight supply /
demand balance it is not unlikely that the spot market in the
next 18 months will experience temporary periods with very strong
freight rates. Based on the T/C charter earnings Frontline has
achieved so far in the second quarter, which has been in excess
of $35,000 per day for VLCCs and $27,000 for Suezmaxes incl.
OBO's, the Board expects a strong improvement in earnings for the
second quarter as well as the full year.
May 31, 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 A.S.
+47 23 11 40 00
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FRONTLINE GROUP FIRST QUARTER REPORT (UNAUDITED)
INCOME STATEMENT
(in thousands of $)
2000 1999 1999
JAN-MAR JAN-MAR JAN-DEC
(restated)
Freight revenues 94,655 114,441 369,876
Voyage expenses (25,510) (31,392) (116,662)
Net operating revenues 69,145 83,049 253,214
Gain (loss) from sale of assets 463 207 (37,779)
Ship operating expenses 18,772 24,414 92,708
Charterhire expenses 8,181 9,576 31,719
Administrative expenses 2,203 2,562 11,783
Operating income before
depreciation and amortisation 40,452 46,704 79,225
Depreciation and amortisation 19,689 23,680 91,435
Operating income (loss) after
depreciation and amortisation 20,763 23,024 (12,210)
Interest income 697 1,864 7,561
Interest expense (20,704) (20,703) (88,728)
Share of results from
associated companies 693 482 3,067
Other financial items (435) 3,352 (840)
Income (loss) before taxes
and minority interest 1,014 8,019 (91,150)
Minority interest - 3,604 4,245
Taxes - 100 (9)
Net income after tax 1,014 4,315 (86,896)
Earnings (loss) per Share
($) - basic and diluted 0.02 0.09 (1.76)
Income on timecharter basis ($ per day per ship)*
VLCC 21,300 29,700 20,000
Suezmax 20,300 21,100 16,700
Suezmax OBO 18,900 20,600 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
MAR 31 MAR 31 DEC 31
(restated)
ASSETS
Short term
Cash and cash equivalents 86,056 200,408 66,267
Marketable securities 17,463 15,000 10,867
Other current assets 57,861 71,309 60,613
Long term
Newbuildings 12,119 58,466 32,777
Vessel and equipment, net 1,601,976 1,720,696 1,523,112
Investment in associated
companies 6,025 19,834 16,274
Goodwill 12,030 7,505 12,203
Deferred charges and
other long-term assets 5,079 5,476 4,680
Total assets 1,798,609 2,098,694 1,726,793
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest
bearing debt 157,054 191,684 116,814
Other current liabilities 42,868 53,759 52,398
Long term
Long term interest
bearing debt 956,221 1,104,437 962,880
Other long term liabilities 20,867 13,490 18,450
Minority interest 4,372 151,526 18,951
Stockholders' equity 617,227 583,798 557,300
Total liabilities and
stockholders' equity 1,798,609 2,098,694 1,726,793
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FRONTLINE LTD.
VESSEL MANAGER FLAG BUILT S.DWT YARD
SUEZMAX TANKERS
Polytrader (40%) RMS NOR 1978 126,000 Uddevalla
Polytraveler (35%) RMS 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 LIB 1993 149,686 Mitsui
Front Splendour Acomarit NIS 1995 149,745 Mitsui
Front Glory Acomarit NIS 1995 149,834 Mitsui
Front Fighter V.Ships NIS 1998 153,328 Hyundai
Front Hunter V.Ships NIS 1998 153,344 Hyundai
Front Warrior 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 BS 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
OBO
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
VLCC
Front Sabang Wallem SING 1990 285,000 Daewoo
Vanadis Wallem SING 1990 285,000 Daewoo
Front Highness Acomarit SING 1991 284,420 Hyundai
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 Tobago (40%) V.Ships LIB 1993 260,619 IHI
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Front Tarim ITM LIB 1993 300,364 Hitachi
Front Tartar ITM LIB 1993 306,902 Sumitomo
Front Century ITM BS 1998 311,189 Hyundai
Front Champion 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
* Vessels commercially managed by 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 June 14, 2000
By /s/ Kate Blankenship
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Kate Blankenship
Secretary
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02089009.AA9
