Frontline reports lower earnings
John Fredriksen-controlled, Bermuda registered tanker operator Frontline made a 2006 net profit of US$516.0m and earnings per share of US$6.90. This was significantly below the very high 2005 figures of US$606.8m net profit and earnings per share of US$8.11. The company also reports a weakening of the market in Q4 with net operating profit of US$220.4m, including a gain on sale of assets of US$73.8m, compared to US$184.7m in Q3 when there was no sale of assets. The average daily time charter equivalents earned in the spot and period market by the company's VLCCs, Suezmax tankers and Suezmax OBO carriers were $48,000, $31,200 and $34,200, respectively compared with $59,800, $40,000 and $30,800, respectively in the third quarter.Frontline notes: “The results show a continued differential in earnings between single and double hull tonnage. The results also reflect the dry-dockings of four vessels in the quarter, that Front Sunda was off hire for the full quarter, together with other unscheduled off hire creating approximately 298 days in lost income. Operating costs continued at above normal level caused by the fact that the dry-dockings were expensed in the quarter.” As of February 2007, the Frontline has cash breakeven rates on a TCE basis for VLCCs and Suezmaxes of $30,200 and $22,600, respectively.