Frontline Ltd. reports net operating income before depreciation of $97.4 million and net income of $37.9 million for the third quarter of 2003. Earnings per share for the quarter were $0.52. Dividends per share for the quarter will be $1.30.
Net operating revenues decreased by 38 per cent compared with the second quarter of 2003 due to weakening in the tanker market. The average daily time charter equivalents ("TCEs") earned in the spot and period market by the Company's VLCCs, Suezmax tankers, and Suezmax OBO carriers were $28,200, $22,000 and $22,500, respectively, compared with $46,000, $39,600 and $35,200, respectively in the immediately preceding quarter. In the third quarter the Company recorded a gain on sale of assets of $6.9 million, principally relating to the sale of two Suezmax tankers. The Company also sold two VLCCs on sale and leaseback arrangements and realised a gain of $8.8 million that will be recognised over the life of the leases.
Net interest expense for the quarter was $16.1 million. In the third quarter of 2003 the Yen strengthened significantly against the US Dollar, resulting in a foreign exchange loss of $12.2 million arising on the Yen debt in subsidiaries.
For the nine months ended September 30, 2003 the Company reports net operating income before depreciation of $477.3 million and net income of $372.6 million. Earnings per share for the nine months were $4.95.
The average daily TCEs earned in the spot and period market by the Company's VLCCs, Suezmax tankers, and Suezmax OBO carriers in the nine months were $42,900, $34,300 and $33,300, respectively. As of today Frontline has cash breakeven rates for VLCCs and Suezmaxes of $21,000 and $14,200, respectively.
Other financial items for the nine months were positive, $29.3 million of which $22.1 million is attributable to the gain recorded on the Bank of Nova Scotia Equity Swap Line that was settled in June 2003. The foreign exchange loss for the nine months of $12.1 million relates to the strengthening of the Yen in the third quarter discussed above.
The results for the periods of 2002 presented have been restated, principally to reflect the adoption of Financial Accounting Standard 142 "Goodwill and Other Intangible Assets". The Company adopted FAS 142 effective January 1, 2002 as disclosed in the preliminary fourth quarter and financial year 2002 report.
The full report is enclosed on the following link: