Frontline announces a net loss of $78.2 million in Q2 2014
The Board of Frontline Ltd. announces a net loss attributable to the Company of $78.2 million in the second quarter, equivalent to a loss per share of $0.81, compared with a net loss of $12.1 million for the first quarter, equivalent to a loss per share of $0.13, the company said in its press release.
The Company has recorded a vessel impairment loss of $56.2 million in the three and six months ended June 30, 2014. This loss relates to the VLCCs Front Opalia, Front Commerce and Front Comanche. Impairment losses are taken when events or changes in circumstances occur that cause the Company to believe that future cash flows for an individual vessel will be less than its carrying value and not fully recoverable. In such instances an impairment charge is recognized if the estimate of the undiscounted cash flows expected to result from the use of the vessel and its eventual disposition is less than the vessel's carrying amount.
The average daily time charter equivalents ("TCEs") earned in the spot and period market in the second quarter by the Company's VLCCs and Suezmax tankers were $13,900 and $12,400, respectively, compared with $32,700 and $27,700, respectively, in the preceding quarter. The spot earnings for the Company's double hull VLCCs and Suezmax vessels were $12,500 and $12,400, respectively, compared with $32,500 and $27,700, respectively, in the preceding quarter.
Contingent rental expense represents amounts accrued following changes to certain charter parties in December 2011 and decreased in the second quarter as compared to the first quarter primarily due to a decrease in actual spot market rates.
Interest expense, net of capitalized interest, was $21.2 million in the second quarter of which $5.7 million relates to the Company's subsidiary Independent Tankers Corporation Limited ("ITCL").
Frontline announces a net loss attributable to the Company of $90.3 million for the six months ended June 30, 2014, equivalent to a loss per share of $0.95. The average daily TCEs earned in the spot and period market in the six months ended June 30, 2014 by the Company's VLCCs and Suezmax tankers were $23,400 and $19,800, respectively, compared with $14,600 and $14,100, respectively, in the six months ended June 30, 2013. The spot earnings for the Company's double hull VLCCs and Suezmax vessels were $22,600 and $19,800, respectively, in the six months ended June 30, 2014 compared with $12,900 and $14,100, respectively, in the six months ended June 30, 2013.
As of June 30, 2014, the Company had total cash and cash equivalents of $62.4 million and restricted cash of $36.7 million. Restricted cash includes $35.9 million relating to deposits in ITCL.
The Company estimates average total cash cost breakeven rates for the remainder of 2014 on a TCE basis for VLCCs and Suezmax tankers of approximately $24,000 and $17,800, respectively.