Frontline announces Preliminary Fourth Quarter and Full Year 2012 Results Wednesday, 20 March 2013 | 00:00
Frontline 2012 Ltd. is a commodity shipping company incorporated in Bermuda on December 12, 2011, which as of December 31, 2012 owned a total of ten crude oil tankers and 28 newbuilding contracts within the crude oil, petroleum product, drybulk and Liquefied Petroleum Gas ("LPG") markets.
As of today the newbuilding program has increased to 53 firm newbuilding contracts.
The Company's sailing fleet is one of the youngest in the industry with an average age of approximately three years and currently consists of six very large crude carriers, or VLCCs, and four Suezmax tankers, operating in the spot and the period markets.
The largest shareholder is Hemen Holding Ltd. ("Hemen") with a shareholding of approximately 51 percent.
Preliminary Fourth Quarter and Full Year 2012 Results
Frontline 2012 announces net income of $0.7 million and earnings per share of $0.004 for the fourth quarter of 2012. Frontline 2012 announces net income of $8.1 million and earnings per share of $0.06 for the year ended December 31, 2012.
The average daily time charter equivalents ("TCEs") earned in the spot and period market in the fourth quarter by the Company's VLCCs and Suezmax tankers were $25,700 and $12,400, respectively, compared with $25,100 and $10,400, respectively, in the preceding quarter. The spot earnings for the Company's VLCC and Suezmax tankers were $24,100 and $12,400, respectively, compared with $23,100 and $10,400, respectively, in the preceding quarter.
As of December 31, 2012, the Company had cash and cash equivalents of $132.7 million compared with $184.6 million as of September 30, 2012. The Company generated $9.2 million in cash from operating activities, used $74.6 million in investment activities and increased bank borrowings by $13.5 million.
The Company prepaid bank debt repayments for the year 2012 in exchange for a one year payment holiday in 2013.
Following this the estimated average cash cost break even rates for 2013 on a TCE basis for its VLCCs and Suezmax tankers are approximately $16,300 and $13,700, respectively.
As of December 31, 2012, the Company's newbuilding program comprised 16 newbuildings within the crude oil and petroleum product markets, four Capesize vessels, four very large gas carriers or VLGCs and four VLCCs. Total installments of $324.0 million have been paid and the remaining installments to be paid amount to $1,112.5 million.
In January 2013, the Company cancelled the second of the five VLCC newbuilding contracts at Jinhaiwan ship yard due to excessive delay compared to the contractual delivery date. The Company's claim towards the yard is secured with refund guarantees from one of Chinas five largest banks.
Since December 31, 2012 the Company has negotiated and concluded a significant number of additional newbuilding contracts. As of today the total newbuilding program amounts to 53 vessels within the crude, product, LPG and dry bulk segments. The total capital commitment for this newbuilding program is $2,598 million out of which $315 million has already been paid in.
The Company also holds a significant number of fixed price options for newbuilding contracts declarable in the coming months. The Company has in addition entered into specific discussions with existing and new yard relations with the target to increase the newbuilding orderbook further. The Board will target newbuildings with deliveries in 2014 and 2015.
The final size of the total newbuilding program including options is still under negotiation and will be reported to shareholders as soon as practically possible.
156,000,000 ordinary shares were outstanding as of December 31, 2012, and the weighted average number of shares outstanding for the quarter was 156,000,000.
In January 2013, Frontline 2012 completed a private placement of 59 million new ordinary shares of $2.00 par value at a subscription price of $5.25, raising $310 million in gross proceeds. The proceeds from the private placement will be used to part finance new building investments.