Frontline reports Q1 2013 results
Frontline Ltd. announces a net loss attributable to the company of $18.8 million, equivalent to a loss per share of $0.24, compared with a net loss attributable to the company of $16.6 million for the fourth quarter of 2012, equivalent to a loss per share of $0.21, said in the company's press release. The net loss attributable to the company in the first quarter includes a gain on sale of assets and amortization of deferred gains of $9.2 million, which includes a gain of $7.6 million on the termination of the charter party for the single hull VLCC, Titan Aries, and a deferred gain of $1.8 million relating to the sale and leaseback of the VLCC DHT Eagle (ex Front Eagle). The net loss attributable to the company in the fourth quarter included a loss on sale of assets and amortization of deferred gains of $14.9 million, which included an aggregate deferred gain of $3.7 million relating to the sale and leasebacks of the VLCC DHT Eagle and Gulf Eyadah (ex Front Shanghai) and a gain of $11.2 million on the termination of the lease for the single hull VLCC Ticen Ocean.
Following the termination of the lease on the company's final OBO carrier, Front Guider, the results of the OBO carriers have been recorded as discontinued operations in accordance with U.S. generally accepted accounting principles. The Company reports a net loss from discontinued operations of $0.5 million in the first quarter compared with a net loss from discontinued operations of $21,000 in the preceding quarter.
The average daily time charter equivalents ("TCEs") earned in the spot and period market in the first quarter by the company's VLCCs and Suezmax tankers were $17,000 and $14,500, respectively, compared with $19,300 and $14,000, respectively, in the preceding quarter. The spot earnings for the company's double hull VLCCs and Suezmax vessels were $14,600 and $14,500 respectively, compared with $18,500 and $14,000, respectively, in the preceding quarter.
Contingent rental expense relates to the amended charter parties with Ship Finance International Limited ("Ship Finance") and the amended charter parties for four other leased vessels and is based on the difference between the renegotiated rates and the actual TCE revenues up to the original contract rates. Contingent rental expense in the three months ended March 31, 2013 is income as the contingent rental expense relating to the four non-Ship Finance vessels is calculated quarterly on a cumulative basis over the four year period to December 31, 2015 and the accrued contingent rental expense at March 31, 2013 was lower than the accrued contingent rental expense at December 31, 2012.
Ship operating expenses decreased by $0.4 million compared with the preceding quarter primarily as a result of a decrease in running costs and a decrease in drydocking costs of $0.2 million.
Charter hire expenses decreased by $2.4 million in the first quarter compared with the preceding quarter primarily as a result of the redelivery of the Gulf Eyadah in December 2012.
Interest expense, net of capitalized interest, was $22.6 million in the first quarter of which $5.6 million relates to the Company's subsidiary Independent Tankers Corporation Limited ("ITCL").
As of March 31, 2013, the company had total cash and cash equivalents of $109.5 million compared with $137.6 million as of December 31, 2012 and restricted cash of $71.1 million compared with $87.5 million as of December 31, 2012. Restricted cash includes $70.6 million relating to deposits in ITCL. The company used $28.6 million in operating activities, generated $19.1 million from investment activities and repaid long term debt and capital leases by $18.6 million.
The company estimates average total cash cost breakeven rates for the remainder of 2013 on a TCE basis for its VLCCs and Suezmax tankers of approximately $25,500 and $18,500, respectively.